Press Release

DBRS Morningstar Changes Trend on Chevron Corporation to Stable from Negative, Confirms Rating at AA

April 08, 2021

DBRS Limited (DBRS Morningstar) changed the trend on Chevron Corporation’s (Chevron or the Company) Issuer Rating to Stable from Negative and confirmed the rating at AA. The rating continues to be supported by the Company's (1) substantial size, both in its Upstream and Downstream segments; (2) integrated operations; (3) above-average geographic diversification; (4) planned projects to replace and grow production; and (5) adequate liquidity. The rating also takes into account Chevron's relatively higher business and political risks because of its exposure to operations in more politically sensitive geographic regions. The Stable trend reflects DBRS Morningstar's expectation that, under the latest DBRS Morningstar base-case commodity price assumptions and expectations for a recovery in demand for petroleum products, Chevron's key credit metrics will significantly improve over the next two years and beyond to support the AA rating.

Chevon entered the Coronavirus Disease (COVID-19) pandemic with a strong balance sheet and metrics supportive of the AA rating. During 2020, key credit metrics deteriorated significantly because of weak earnings and cash flow, new debt issuances to fund free cash flow (FCF; after dividends and capital expenditures (capex)) deficit, and incremental debt from the acquisition of Noble Energy, Inc. In response to the weak oil price environment and Downstream margins, the Company reduced its 2020 capex by 35% to $13.5 billion. In March 2020, Chevron also suspended its share repurchase program to conserve cash; however, the Company did increase its annual dividend by slightly more than 8%.

In 2021, Chevron expects to spend $14 billion in capex and grow its production by up to 3% year over year at an average Brent Crude price of $50/barrel. Based on DBRS Morningstar's expectation for higher commodity prices, DBRS Morningstar expects Upstream earnings and cash flow in 2021 to be significantly higher than 2020. The Company is expected to use part of its FCF surplus to reduce total debt, bringing it closer to the targeted debt-to-capital ratio range of 20% to 25%. As a result, DBRS Morningstar expects key credit metrics to improve over the next couple of years to support the overall rating of AA.

The Company's liquidity position is adequate with $9.8 billion of committed credit facility, which supports the commercial paper program ($5.6 billion of commercial paper outstanding as at YE2020) and $5.6 billion of cash balance as at December 31, 2020. Assuming recovery in demand for petroleum products and refinery margins, DBRS Morningstar expects the Company to generate FCF surpluses even under DBRS Morningstar's stress-case price assumptions. While a positive rating action is unlikely in the near term, DBRS Morningstar could take a negative rating action if the Company's financial risk profile weakens for an extended period of time and fails to support the overall AA rating.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at

All figures are in U.S. dollars unless otherwise noted.

The principal methodologies are Rating Companies in the Oil and Gas and Oilfield Services Industries (August 17, 2020; and DBRS Morningstar Criteria: Rating Corporate Holding Companies and Parent/Subsidiary Rating Relationships (November 2, 2020;, which can be found on under Methodologies & Criteria. Other applicable methodologies include the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (February 3, 2021;

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release:

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at [email protected].

This rating was not initiated at the request of the rated entity.

The rated entity or its related entities did not participate in the rating process for this rating action. DBRS Morningstar did not have access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

This is an unsolicited credit rating.

Generally, the conditions that lead to the assignment of a Negative or Positive trend are resolved within a 12-month period. DBRS Morningstar trends and ratings are under regular surveillance.

For more information on this credit or on this industry, visit or contact us at [email protected].

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