Chevron will cut capital and exploratory spending next year by 5 percent compared with 2009 levels.
The second-largest U.S. oil company, which is headquartered in San Ramon, Calif., said its spending program would amount to $21.6 billion in 2010 and will be dominated by oil and gas exploration projects.
ConocoPhillips said earlier this year that it would also slash capital spending to get its finances under control following a severe drop in oil prices.
Chevron's cut, however, comes largely because it completed a number of oil exploration projects this year, said Mark Gilman, an analyst with The Benchmark Company.
"It might be down next year, but these are still some of the highest spending levels we've seen for the company," Gilman said.
Among Chevron's major spending projects will be $17.3 billion for exploration and production including the development of the Gorgon natural gas project in Western Australia and other drilling operations in the Gulf of Mexico, western Africa and the Gulf of Thailand.
"Much of our 2010 spending continues to be on large, multiyear projects consistent with our upstream growth strategies and on improving operating efficiency and reliability," Chairman and CEO Dave O'Reilly said in a statement Thursday.