We've expanded our CO2 storage portfolio adding over 2 million acres offshore Western Australia. In September, the FTC completed its review of the company's merger with Hess. And we also recently announced several asset sales as part of our ongoing portfolio optimization efforts. This quarter marked the one-year anniversary of the PDC Energy acquisition.

We've successfully combined the two companies, taking best practices from both and applying them across our shale and tight portfolio. We've exceeded our guidance of $500 million in combined capital and cost synergies by more than 30% and have delivered more than $1 billion in incremental free cash flow since acquiring PDC. Chevron's well performance is 40% better than the DJ Basin average and we continue to optimize development plans. We have advantaged inventory with around 75% locations at a breakeven below $50 per barrel.

We expect to hold production at a plateau around 400,000 barrels of oil equivalent per day through the end of the decade. Our operations in Colorado are among the lowest carbon intensity assets in the industry, benefiting from tankless production facilities that lower greenhouse gas emissions by 90% compared to older designs. Where possible, we utilize grid-powered rigs that reduce more than 60% of our on-site greenhouse gas emissions from drilling. At TCO, the team continues to deliver consistent progress on project milestones.

All four pressure boost facilities are now online and operating with high reliability. All production is flowing through these facilities, which allows optimization of existing plants and enabled the highest daily production in the field's 31 years of service. Remaining metering stations are all under conversion and we're confident in the incremental well capacity that will feed FGP. We've initiated final lead testing for the wet sour gas compressors and are preparing the crude processing systems for operation.

Complex commissioning activities will continue over the coming months, leading into initial start-up activities in the first quarter of 2025. We continue to divest non-core positions at significant value. We've announced asset sales in Canada, Alaska, and Congo that will contribute before tax proceeds of approximately $8 billion. Pending regulatory approvals, we expect to close these transactions in the fourth quarter.

In Canada, we've received a compelling offer for our Kaybob Duvernay shale position and non-operated interest in the Athabasca Oil Sands project. Both are good assets and we have a long history there, but they are a better fit for a reputable counterparty at an attractive deal value for Chevron. Now I'll turn it over to Eimear to discuss the financials.

Eimear Bonner -- Chief Financial Officer

Thanks, Mike. We've reported third-quarter earnings of $4.5 billion or $2.48 per share. Adjusted earnings were $4.5 billion or $2.51 per share. Organic capex was $4 billion for the quarter, in line with our budget.

Our balance sheet remains one of the strongest in the industry, ending the quarter with a net debt ratio under 12%. Cash flow in the third quarter was the highest for the year, despite lower oil prices. Working capital decreased by $1.4 billion on lower inventory levels. Share repurchases were a record $4.7 billion at the top end of our quarterly guidance range.

Our financial priorities are unchanged and we plan to use our strong balance sheet to reward shareholders consistently through commodity cycles. Compared with last quarter, adjusted earnings were down about $150 million. Adjusted upstream earnings were down mainly due to lower liquids realizations and high DD&A at TCO and partly offset by higher listings. Adjusted Downstream earnings increased primarily due to favorable timing effects and higher U.S.

volumes. This was partially offset by lower U.S. refining margins. Adjusted third-quarter earnings were down $1.2 billion versus the same quarter last year.

Adjusted upstream earnings were flat. Lower liquids realizations and higher DD&A were mostly offset by higher liftings and timing effects. Adjusted Downstream earnings decreased mainly due to lower refining margins. All Other was down primarily due to interest expense.

Third-quarter oil equivalent production was up around 70,000 barrels per day from last quarter. Strong production in the Permian primarily in our company-operated New Mexico assets was the main driver. We expect full-year average production growth to finish at the top end of our guidance range of 4% to 7%. Costs always matter in the commodity business.

We have a track record of managing unit costs, well below inflation while successfully integrating several acquisitions. Higher returns require competitive costs and safe and reliable operations. Executing turnarounds on budget and on schedule is a key performance driver, and we've delivered outstanding performance in 2024. Our teams have collaborated across upstream and downstream to standardize the approach to these complex maintenance events, increasing the days our facilities are online and lowering unit costs.

While we anticipate significant volume growth in the years ahead, we also expect to deliver $2 billion to $3 billion in structural cost reductions by the end of 2026. These cost savings will largely come from optimizing the portfolio, leveraging technology to enhance productivity, and changing how and where work is performed including the expanded use of global capability centers. Now looking ahead. In the fourth quarter, Upstream will have downtime, which is expected to be split between U.S.

and international operations. Impacts to production from divestments are expected to be around 45,000 barrels of oil equivalent per day for the quarter. Downstream will have higher planned maintenance primarily at El Segundo and Pascagoula. We will also have a shutdown at the Pascagoula Refinery enabling the light tight oil expansion to come online.

We anticipate affiliate dividends to be around $1 billion this quarter. Share repurchases are expected to be between $4 billion and $4.75 billion in the fourth quarter, unchanged from prior guidance. Proceeds from asset sales are expected to be about $8 billion before taxes in the quarter. Back to you, Jake.

Jake Spiering -- General Manager, Investor Relations

That concludes our prepared remarks. We are now ready to take your questions. [Operator instructions] We'll do our best to get all of your questions answered. Justin, please open the lines.

Questions & Answers:

Operator

[Operator instructions] And our first question will come from Jean Ann Salisbury with Bank of America.

Jean Salisbury -- Bank of America Merrill Lynch -- Analyst

Hi. Good morning. The main feedback I have heard from investors hesitant on Chevron is wanting resolution on TCO start-up and Hess. At what point should investors consider TCO start-up largely derisked? Is there like a specific milestone in the commissioning and start-up process like where you've listed here where you could say, OK, start-up probably really can't slip much from here and are we there now?

Michael K. Wirth -- Chairman and Chief Executive Officer

Yeah. So thanks for the question. We are making really great progress. And I think you saw that again this quarter, as we've had several quarters now, where we've laid out expected milestones and delivered on them.

The team is delivering predictable commissioning and start-up activity. And I ran through some of the current state relative to low-pressure production, strongest day of production ever, etc. That said, there is still significant complex commissioning work still ahead, particularly on the future growth project. That work is well underway here, and we expect, as we said, to begin start-up procedures in the first quarter.

So our cost and schedule guidance is unchanged. One of the key things for us and this is a learning, from other projects over the years is, to ensure reliability, we want to make sure that we have everything ready to start-up safely and then run reliably as we go forward. And so, we're going to continue to be very methodical in the way we go about starting up the equipment there. But it is, every quarter that passes it's being derisked.

I don't know that there's a magic threshold, where you can say it's entirely derisked. But everything we say or everything we see is very positive. In fact, Eimear was there just recently along with Mark Nelson. Maybe Eimear, you can share some of the things you saw at TCO.

Eimear Bonner -- Chief Financial Officer

Yeah. Thanks, Mike. And yes, it was great to be back and to be with Mark and Jake and the team in Tengiz. And when we were there, they actually achieved a key milestone the day we arrived in Tengiz and that was when they fully transitioned to feeding all of the existing six production trains with low-pressure production fed through the pressure boost facility.

So I think the fact that the production was at high levels producing through the pressure boost facility just showed the high reliability that's been achieved there. We also visited three sites at Tengiz. Jinan, the first one was the operations and control center and there we saw how they're leveraging the advanced process control technology, digital tools to really optimize production, keep the plants full and plan work safely. So that was great to see that, that's been part of the project and is really enabling a whole new level of optimization.

We went to the sites that Mike talked about where the complex commissioning is ongoing, so the 3GP site, the third generation site, and there's large and high number of equipment that's being commissioned there. So we talked to the team about how diligent they're being to ensure that, we do the performance testing on the equipment, we commission the equipment, and we do that in a very methodical way. So that was great to see. We also went to the third-generation injection facility.

And with the design that we have, we will be injecting all of the produced gas into the reservoir to help with pressure management and they were doing injection testing when we were there. That's a key bit of derisking to know that the wells will take the sour gas into the back end of the reservoir. Overall, it was a great visit. We came away really encouraged by the work of the team, by the consistent progress that's being achieved, but also by just the rigorous planning and thought that's going into ensuring a safe and reliable start-up and ramp-up over the first-half 2025.

Thanks for the question, Jean Ann.

Operator

Our next question will come from Neil Mehta with Goldman Sachs.

Neil Mehta -- Analyst

Good morning, Mike and team. I just wanted to spend some time on the Permian. You had indicated in the prepared remarks that you expect to finish toward the top end of the 4% to 7% range in guidance and you highlighted strength in company-operated New Mexico. Can you spend a little bit more time unpacking that, the sustainability of that? And just how should we think about the path to ultimately getting to plateau at this asset?

Michael K. Wirth -- Chairman and Chief Executive Officer

Yeah. Neil, we did have a nice strong quarter again in the Permian. I realized a lot of our activity now being in New Mexico, the data is not quite as timely and transparent maybe as in on the Texas side. So you may not see that.

But a couple of things. Number one, our new well performance has been very, very strong in the Delaware Basin. We've got a lot of that in the third quarter in particular, we're in the second Bone Spring and seeing top-quartile performance out of those wells. Also in the -- on the Texas side in the Delaware and the Wolfcamp A, were outperforming expectations.

So new wells and the completion of pop time on those new wells has been very, very strong. In the base business, we're seeing stronger reliability performance, proactive maintenance efforts are paying off. We're seeing artificial lift optimization now, sustaining strong production. And we're seeing efficiency gains in everything from completions designs, coordination, and logistics to reduce mobilization.

We've talked about triple frac before. And so, across the entire activity portfolio in the basin, we just continue to see improvement in the execution of that and then improvement in the performance of the wells. As we move toward the 1 million barrel-a-day mark next year, we will begin to shape our profile there a little bit toward a plateau. And we really begin to focus on free cash flow.

And so, growth will become less the driver and free cash flow will become more of the driver if you will. So we'll bring capital spending down. And I think what you'll see is this year is probably going to be the peak in Permian capex. As we move forward, we'll start to attenuate that.

The growth, which has been at a 15% CAGR for the last three years probably going to be higher than that this year, will begin to attenuate as well and will really open up the free cash flow there. So more to follow in terms of exactly what that looks like. I'm sure people are curious about that. So we'll provide more guidance here over the next call or two, so you can start to think of what that looks like.

But the headline here is continued efficiency and productivity gains, strong free cash flow today, and we're going to manage it for even stronger free cash flow in the future.

Operator

The next question will come from Doug Leggate with Wolfe Research.

Doug Leggate -- Analyst

Good morning. Sorry, I had a frog in my throat. Mike, I appreciate the opportunity to ask your question. If I could observe, as a kind of precursor to my question, this is probably your best operating quarter in quite a while, so congrats to share prices responding accordingly.

But, if you look at your relative underperformance, since you announced the Hess deal. It's clearly a huge weight of uncertainty on the stocks, basically wiped out the value of Hess. So it is a Hess question. And it goes something like this.

You've now got FTC since we last spoke on the last call. You've got the shareholder vote, and you're moving ahead with, I guess, what many would think with the post-Hess acquisitions disposals. The synergies presumably are not related to Guyana, why not go ahead and close the deal if you're so confident in your legal position?

Michael K. Wirth -- Chairman and Chief Executive Officer

Look, the relative performance of the shares relates to a lot of things number one. And so, I wouldn't dispute the fact that the Hess uncertainty is a material contributor. But as you said, we've had some performance unevenness that we've -- I think we've ironed out and we need to prove that. But, we announced the cost and schedule update to TCO during this period of time.

So there's been a number of things that I think are all part of that. All of which are a high priority and as you see today are getting a lot of attention and I think improving. Look, we've got a deal structure with Hess that has a condition precedent that, if there's an arbitration the arbitration has to be concluded. We are confident that, it will be successfully concluded, but that's the way we set the deal up and we're going to execute the transaction the way the transaction is written and integration planning is going very well.

We're working very closely on everything that we can at this point in the process to prepare for the future. And I realize that, the timing on this is unfortunate, but we're continuing to move forward and look forward to integrating the two companies and being really the premier oil and gas company prepared for the energy transition. Thanks, Doug.

Operator

Our next question will come from Biraj Borkhataria with RBC.

Biraj Borkhataria -- Analyst

Hi, there. Thanks for taking my question. I wanted to ask around the Canada sales. If I go back to the Hess deal, the rationale was to buy long cycle, high-quality resource, and obviously helps diversify your portfolio.

Guyana is very different to Canada obviously. But could you just talk about the decision to execute that divestment, one, now ahead of the arbitration decision, which was a surprise, but also more broadly, I would have thought you were a net buyer of kind of long cycle resource. So if you could just talk about how you're thinking about that and how you're thinking about the portfolio that would be helpful.

Michael K. Wirth -- Chairman and Chief Executive Officer

Sure. Biraj, we've got a long history in Canada. It's been a good business. AOSP has been a steady contributor of cash for many years.

But, we've also indicated that, as a 20% non-op position, it wasn't really viewed as a core asset in the portfolio. So as we were marketing the unconventional position in the Kaybob Duvernay, we were not actually marketing AOSP, but the buyer came to us and proposed buying both, and made us a very attractive offer to buy both. The Duvernay, while it's a good asset, was struggling to compete against the strength in other parts of our shale and tight portfolio. And AOSP, as we've indicated for some time, is a non-core asset.

We were willing to consider offers for it, but there was a long time when I think potential buyers were struggling to give us the value that we saw to your point for a long-duration asset. The Canadian producers are faring better today. I think their equity valuations have recovered. And so, we were presented with an opportunity to transact at what we thought was good value and we've been patient.

Others have left the oil sands over the years at what we felt were discounted values and we weren't prepared to do that. But when we got a value that we thought was a fair value, we were prepared to transact. And, yes, we want to add good-quality, long-duration assets to the portfolio, but we have a lot of those in our portfolio today. And so, I don't think you should read our desire for those kinds of assets to say that anything that would kind of broadly fit under that heading is not eligible for potential divestment.

We're going to continue to high grade our portfolio over time. And we add quality assets and use technology to improve the value of assets in our portfolio, we'll always ask ourselves, if kind of the balance of the portfolio has more value to others than it does to us and be willing to entertain that kind of question. Thanks, Biraj.

Operator

And the next question will come from Josh Silverstein with UBS.

Josh Silverstein -- Analyst

Thanks, guys. Just on the $2 billion to $3 billion cost savings, how much of this comes from the announced $8 billion of asset sales year to date versus what maybe comes from additional asset sales and structural cost savings? And then any split between upstream or downstream?

Eimear Bonner -- Chief Financial Officer

Yeah. Thanks, Josh. Let me talk you through kind of our plan here, given that it's some new material. First of all, as you saw on the slide, we've been disciplined in managing our cost competitively over the years.

This program is essentially our next set of cost-reduction steps to sustain our discipline, given that in our business, costs are always matter. They're always important. What we're focused on here is, reducing absolute costs while we deliver significant growth in the business. Think about this program as focused on the controllable, and we're expecting run rate reductions to be realized over the next few years by the end of 2026 from a 2024 baseline.

The full benefits will be seen in 2027. In terms of where the reduction is coming from, the first category is really portfolio actions. Examples, like what we've heard today in the call on the United Canada, Alaska, Congo sales. There's a large portion of this is associated with that.

We see the direct costs be reduced as the asset transfer from our portfolio and then we would expect overhead costs associated with those assets to reduce over time. That's one part of this program. The second part is just improvement initiatives, and these are initiatives that we see across the organization. They're coming from the business units, all segments, they're coming from the functions.

Some examples of what we're talking about here is, initiatives that leverage technology solutions to reduce cost and drones, robotics, digital twins that have transformed how we think about operating and maintaining our facilities and that would be an example. Another example would be improvement initiatives that really look to how we do our work, where we do our work? An example there would be the recent announcement of the ENGINE and global capability center in India. So in these centers, we're looking to standardize and centralize more of our workflow. So that's really what the program is.

When you think about the range, what I'd say is, the first $2 billion think about these as divestments and cost reduction and cost reduction initiatives that are in our plan. They're firm. They're either execution ready or working toward becoming execution ready. Think about the third billion as additional target that we have with initiatives that are underway that we haven't fully quantified.

They're not execution ready. We have work to do to make them execution ready. That's how I would describe the range and we expect to provide updates on these initiatives. We'll do that through 2025 as we execute on them and we deliver results.

Thanks.

Operator

We'll go to Devin McDermott with Morgan Stanley.

Devin McDermott -- Analyst

Hi. Good morning. Thanks for taking my question. I wanted to ask about the balance sheet and shareholder returns.

Your net debt ticked up a bit quarter over quarter in 3Q versus 2Q, I think you support strong buybacks. And you're still well below your long-term targets. You have cash coming in the door from asset sale proceeds, as you noted, between now and year-end, and then nice inflection in the Permian and TCO cash flow into next year. But I guess my question is, given Permian and TCO cash flow into next year.

But I guess my question is given how volatile commodity markets and oil markets specifically have been in recent times, how do you think about continuing to use the balance sheet to support shareholder returns versus tapering it back and waiting for potentially lower commodity prices over the next few years? So balance sheet use and how you think about that is the core of the question.

Michael K. Wirth -- Chairman and Chief Executive Officer

Yeah. Devin, let me just address share repurchases and then I'll let Eimear talk about the balance sheet. Recent volatility in commodity prices to somebody who's been in this industry for 42 years is not new news. That is the way this industry works and we're in a volatile cyclical commodity business.

So the backdrop is nothing we're not well-prepared for. First thing is, I just want to reiterate our guidance. The share repurchase run rate of $17.5 billion is unchanged. The range we've given you kind of brackets the way we execute the program and we were a little bit above the midpoint of that here this most recent quarter.

We got a strong track record of buying back shares which is our fourth financial priority and that's after making sure we can sustain and increase the dividend or we've got a track record of doing that for 37 years in a row, reinvesting in organic projects to grow future cash flows to support that, so the second priority. The third is to maintain a strong balance sheet. We've got AA credit and below 12% net debt. And then, the fourth is to return excess cash to shareholders through share repurchases which we've done for 2017 in the last 21 years.

And so consistency in financial priorities, consistency in execution is very important. And I think we've got a track record that we can stand behind there through commodity price cycles. Over the last 20, 21 years where I said '17 to '21 that we've repurchased, we've seen a financial crisis. We've seen a pandemic.

We've seen OPEC open-up the taps and commodity prices respond accordingly. And so, we've been through down cycles. We've been through unexpected circumstances and have maintained the strong track record of shareholder distributions through it, in part, because we've maintained a conservative financial position and a very strong balance sheet. I'll let Eimear talk a little bit more about the balance sheet.

Eimear Bonner -- Chief Financial Officer

Yeah. Thanks, Mike. Devin, when we look at the balance sheet, we're focused on maintaining its strength through the cycles, right? It's an asset that we use to create value and to navigate the volatility that Mike talked about and reward shareholders consistently. So when we look at our debt levels today, our net debt under 12%.

That's at the low end of where we've been over the last 10-plus years. So we're underlevered and given this and all the growth that's coming and the additional asset sale proceeds that we're expecting in the short-term. We're comfortable with where we are, and we anticipate the net debt will come down a little bit in the near-term with the asset sale proceeds that are coming. But we're planning with a multiyear time horizon with a through-cycle approach.

And, we're very comfortable with where we are right now with the balance sheet. Thanks.

Operator

And moving on to Lloyd Byrne with Jefferies.

Lloyd Byrne -- Analyst

Hey. Good morning. First, congrats to you and your M&A team, I think the divestiture progress has been great. I want to follow up quickly to Biraj's question, AOSP seemed very opportunistic.

Does that change your long-term goals? And then really, I wanted to ask about the DJ and see whether -- I mean, it's just really impressive operating progress there synergies, free cash flow. But I think the surprise has to be you guys holding it flat to the end of the decade. Maybe you can just comment on the opportunities there and whether there's more opportunities for scale.

Michael K. Wirth -- Chairman and Chief Executive Officer

Yeah. So just to quickly touch on AOSP. There was one kind of most logical buyer, right? And it was the operator, and we've had discussions over the years. And have not been able to really get to a common view on value.

And so that's what's changed. And so if you want to say that's opportunistic, that's fine. But we really wanted to realize the value that we saw in that asset, and we've been able to do that. The DJ, look, the first thing I'll say is the integration there and the synergy delivery continues the track record that we've had over a long time of exceeding our synergy commitments.

And when we do a deal and we come out with a target, it's intended to give you a high confidence number that you can use. And we've done the diligence we have at that point. And our track record is we find more and we deliver more. We're very happy with the quality of the assets and the ability to drive strong performance.

We've learned from each of the companies that we've acquired. I talked a little bit about the lower carbon footprint there. We've seen some other things like gas lift and new laterals that have been used by some of these companies that we're starting to work with in some of our other parts of our portfolio. And the last thing I'll say is the team there does a wonderful job of balancing this multistep permitting process.

And I know there's been some concern expressed by people about the regulatory environment. We're working very closely with the regulator in Colorado to ensure that we can achieve their objectives and that we can achieve our objectives. And I'd say that's a very constructive relationship. We've got comprehensive area plans in place that derisk the longer-term development and the quality of the asset, 400,000 barrels a day out through the end of the decade.

Three years ago, we had zero in the DJ Basin. And so very pleased with it. We're big there. We're the biggest operator there.

If the question was are you going to acquire some additional positions there? I wouldn't say that's high on the priority list. The real key is to drive value out of this asset.

Operator

And the next question will come from Betty Jiang with Barclays.

Michael K. Wirth -- Chairman and Chief Executive Officer

Good morning, Betty.

Operator

Betty, your line is open, perhaps you were just on mute.

Betty Jiang -- Analyst

I was on mute, I'm sorry. Good morning. Thank you for taking my question. So I want to ask about Gulf of Mexico.

Feels like there is a bit of technology renaissance that's happening in GA and including Anchor project that just came online. Can you talk about how the technology is opening up new resource opportunities for Congo for the Chevron portfolio? And does that represent any upside to how you think about the longer-term production and resource opportunities in that area?

Michael K. Wirth -- Chairman and Chief Executive Officer

Yeah. Betty, it sure does. And it's an extension of the story of the Gulf of Mexico. Initially, on the shelf as people move from onshore to offshore, then out into the deepwater, and we began to develop techniques to explore and ultimately develop and produce in deepwater, now in the ultra-deepwater.

And in the ultra-deepwater now at ultra-high pressures and temperatures. And the breakthroughs on the Anchor project, and it's the first one to be producing with 20,000 psi technology. I mentioned last week and something I was doing just to help people understand that. That's essentially the pressure that would exist if an elephant, a full-grown male African elephant were standing on a quarter.

And so it's incredibly high pressure. This is a high-temperature fields that the -- everything that goes along with that needs to be capable of dealing with those pressures. That includes trees, blowout preventers, etc. We have a 3 million-ton hook load now on the drillships, which is the highest hook load we've ever seen.

That opens up a lot, at least 20% of our exploration portfolio is going to require this kind of capability. We're using other things like ocean bottom nodes, seismic now that helps us better characterize developments and exploration opportunities. Think of it as 4D essentially, technology out there. We're working on AI tools to help guide exploration focus areas and predict geologic risk factors more effectively.

So yes, the -- I think the history of the Gulf of Mexico has been technology advancements to continue to allow us to identify and then produce resource out there. It's a vast area. The Mississippi River is and was an incredible conveyor belt for organic material out into the Gulf of Mexico over geologic times. And the industry isn't done there by any means.

I think there's a lot left to go. And maybe the last thing I'll say about it is this is about unlocking new opportunities. We're also working hard to make better use of existing infrastructure with near field development. The ability to tie back at longer distances and develop smaller discoveries that wouldn't support a stand-alone greenfield developments, but can very easily tie back as a brownfield to an existing facility.

Ballymore is a good example of this, and I think you're going to see more of those as well. So the heyday, the Gulf of Mexico is far, far from over.

Operator

And the next question will come from Paul Cheng with Scotiabank.

Paul Cheng -- Analyst

Hi. Good morning

Michael K. Wirth -- Chairman and Chief Executive Officer

Good morning, Paul

Paul Cheng -- Analyst

Good morning. You have an excellent production record in both the Tengiz and Gorgon that they have done well. And there's particularly impressive that given both of them, you have turned around not like the turnaround has done well and maybe they're coming in faster than the scheduled time. So is it a one-off or that you have changed the process so that this is a repeatable benefit that we could expand in the future.

Michael K. Wirth -- Chairman and Chief Executive Officer

Paul, it's the latter. And we've been working this both upstream and downstream because these facilities are starting to look a lot more similar than they are different. And to deliver higher returns, one of the keys is to execute turnaround as well, ensure the work that's done enables reliable operations in between turnarounds and to continually improve on this. I mentioned earlier that Eimear was just out in Kazakhstan and has been at Gorgon, not too much earlier.

Eimear, maybe you can talk a little bit more specifically about what you're seeing on turnaround execution.

Eimear Bonner -- Chief Financial Officer

Yes, no problem. And thanks, Paul, for the question. Yes, to Mike's point, I mean, our complex facilities, whether they're in refining or upstream assets like TCO and Gorgon, they're more similar than different. And so this has been an area of focus for us to try and standardize how we approach these complex turnarounds to really drive performance.

So we've been working on it diligently for a few years. And I think the improvement actions that I would point to would include maybe the first one is just how we think about the scope of the turnaround. And think about this as looking at all the units and equipment and discerning, can I do the maintenance work on the run or do I need to do the maintenance work only when the plant is shut down. And so there's a lot of improvement being delivered because we've been very diligent about discerning what's in and what's out.

We call out rigorous scope management. The second improvement talks to the digital tools that we've used to really help with not only planning but execution and prioritization. I'll give you a couple of examples of the digital tools. Digital tools that help us with permits, digital tools that help us with isolation, digital tools help us with leak testing and flange management in addition to digital tools that help us with managing the span and control given that these turnarounds bring in huge numbers of personnel at once.

That's another area. The third one, which I believe we've taken a whole different level as benchmarking and we benchmark turnarounds. We benchmark the units. But the benchmarking that we're doing today, the benchmarking goes down to the equipment level.

And so just the rigor in the benchmarking to look for improvements and to learn where we can be more efficient is yielding positive results. Then finally, I would say, we have experts in this capability perspective. We have employees that have spent most of their careers in turnarounds, they're masters in turnarounds. And so we have looked for opportunities to share resources and to cross point with these experts so that the lessons that we learned in TCO, we can learn them in Gorgon and vice versa.

The lessons that we're learning in refining we can implement those lessons learned in the upstream. So all of those things coming together has really driven a step change in our performance with nearly 9 turnarounds executed this year, almost all of them have been delivered at industry level performance. So we're very pleased of this work given the criticality of it to be as business excellence. And we're -- these results are industry-leading.

Michael K. Wirth -- Chairman and Chief Executive Officer

Yes. Paul, eight out of the nine turnarounds were executed in line with first quartile duration targets. The Gorgon Train 2 turnaround was our best Gorgon turnaround ever with a 14% improvement in duration. The TCO KTL-1 turnaround was a 23% improvement in duration compared to the last one.

And in several of our refinery turnarounds saw cost decreases of up to 50% compared to the prior turnaround of that unit. So I think there's some real quantifiable progress that you can see across the system that's being achieved. Thanks, Paul.

Operator

And the next question comes from Bob Brackett with Bernstein Research.

Bob Brackett -- Analyst

Good morning. If I return to the structural cost reductions, and I want to put it in the context of the relocation from California to Texas. Is that relocation an opportunity to the cost reductions, I believe that redesign processes and organizations? Or is it a threat to the cost reductions, right? There's chaos and lack of continuity. How do you think about that?

Michael K. Wirth -- Chairman and Chief Executive Officer

I don't think it's a threat, Bob. We're going to -- we've talked about the relocation occurring over a period of time. We're going to be very thoughtful about moving work from one location to another, moving people from one location to another. Not all of the work that's being done in San Ramon necessarily will go to Houston.

So it may go to these global capability centers that Eimear has talked about earlier. Some of it, we may find technology tools that help us to do the work more efficiently and automate things. And so I think it's a little bit of a simplistic reduction to think about just lifting and shifting everything from San Ramon to Houston. It's a migration of work to for technology platforms, different locations.

And we'll do that thoughtfully and methodically over a period of time. We'll make sure it's been planned out and any risk. And so I think it's part of an ongoing work evolution in a global company that has a workforce around the world that can do work in many different places that historically did a lot of work in business units because that's the way it had to be done. But now there's other ways to approach this work, and we're looking for ways to do it best to deliver the best work product and do that at a cost structure that's ever improving.

Thanks for the question.

Operator

And moving on to Lucas Herrmann with BNP Paribas.

Lucas Herrmann -- Analyst

Yeah. Thanks very much and afternoon. Mike, Fairly obvious question, I guess. I just wanted to talk to you.

I wondered if both of you could talk a little bit more about capex going forward. And maybe it's an inappropriate time and December will be better. But if I look at what's happening with the business, obviously, Tengiz starts up. You've got your assets in the Gorgon coming on.

You're talking about driving free cash flow driving for NPV value in the Permian capex coming down there. If I think about the current rate of capex spend, including associates deals -- it's around $18 billion, $18.5 billion if you guided at the beginning of the year. If I look at the opportunities for that capex to start to fall these projects or production plateaus or projects come on, it feels as though maybe $3 billion, $4 billion of capex opportunities, so it's the opportunities to support capex decline [Inaudible]. What's really hard, Mike, Eimear, is to see where that goes, particularly given, obviously, everything going on in the East Med at the moment.

So is it right now to start thinking about capex coming down very materially as we move forward over the next two, three years and you're really starting to benefit emphatically from a portfolio but in essence, is deep in resource, but pretty long duration.

Michael K. Wirth -- Chairman and Chief Executive Officer

Yeah. So you've covered a lot of waterfront there, Lucas. Let me try to address it and then let Eimear share some of her thoughts. Number one, I think an important point is if you look at the ratability of our capex, we used to have a program that had a lot of big long-duration capital projects.

There was a pattern over the back half of the year, fourth quarter, in particular, tended to be a little bit heavier. First quarter, a little bit lighter. We're very ratable now. We've been about $4 billion on our organic capex all three quarters this year.

So it's become much more ratable and predictable. That's a reflection of the nature of the projects that we're doing. Point two, you talked about capex coming down. A decade ago, our capex was $40 billion.

Today, it's in affiliates, as you say, it's 18-something, $18.5 billion or whatever that number is. So it's less than half of where we were. So it's come down substantially even as production has grown as the company generates more cash. We're doing it in a much more capital-efficient manner than we ever have before.

And point three is, yes, we will continue to seek further ways to optimize and improve the capital efficiency of our company. A larger portfolio does, over time, require capital to maintain it. And so there analyze the trade-offs that you evaluate as you look at your capital investment opportunities, the readiness of those to move into execution. And I think in the near-term, what's very clear is our affiliate capex will come down next year as the project in Kazakhstan concludes.

So you'll see affiliate capex come off. We're in the process right now of finalizing our business plan for 2025. And so it is a bit premature for me to guide you to that number. But we're looking at all the trade-offs and then we'll talk more about that after we complete our planning process.

But our intent is to stay very disciplined, which I think is something we've demonstrated here over many, many years now. Our guidance range of $14 billion to $16 billion is unchanged. And I think you should expect us to respect that. And if that does change by some quantum, and you throw out some larger numbers there, we'll cover that with everybody and talk about how it's changed, why it's changed and how you should think about what that means going forward.

Eimear, do you want to add anything to that?

Eimear Bonner -- Chief Financial Officer

I think you've covered most of it, Mike, given that we're putting our plan together right now. Lucas, all I'd say is the projects that you referenced and how we see the capex profile is coming off and the free cash flow growing as those projects complete, it's a key focus for us. So we'll give you more information on a fourth-quarter call as we complete the process, we don't want to get ahead of the process right now. Thanks for the question.

Operator

And the next question will come from John Royall with J.P. Morgan.

John Royall -- JPMorgan Chase and Company -- Analyst

Hi. Good morning. Thanks for taking my question. So could you talk about your position in California in the downstream, still having two refineries there, and we've had another closure announced over the past couple of weeks, is shutting capacity something you've considered in California? And how do you think the market will be impacted by this latest closure? Do you think we'll see structurally higher profitability there as a result or maybe things will adapt kind of back to where they were?

Michael K. Wirth -- Chairman and Chief Executive Officer

Yes, John. First of all, I think what I would say is we've seen another ill-conceived move by a state that has implemented policies to deliver its residents, the highest gasoline prices in the country. This most recent action to insert state bureaucracy into turnaround planning and inventory management is likely is to make prices go higher, not go lower. Putting bureaucrats in charge of centrally planning key segments of the economy hasn't worked in other social states, and I doubt it will be any different in California.

Policies that constrained supply faster than demand is adjusting create more volatility, and they tend to create a greater likelihood of higher prices. And so, unfortunately, these measures are advertised as doing the opposite. But the reality is for anybody that looks at them and think them through discouraging investment and constraining supply when you still have strong demand is going to lead to just one conclusion. And so look, we've operated in California for over a century both of our refineries are over 100 years old.

We've got -- they're very competitive refineries, and we've got strong integrated value chains with very strong brands, strong customer relationships. And so these are competitive businesses that we will continue to evaluate within our portfolio like every other asset, as we've discussed earlier. And so we will continue to meet our customer needs and compete. We'll evaluate alternatives if and when it becomes evident that that's the appropriate thing to do.

But I'll tell you, it's very tough to justify any new investments in that system, and it's only getting tougher. Thanks for the question.

Operator

And we'll take a question from Roger Read with Wells Fargo.

Roger Read -- Analyst

Yeah. Thank you. Good morning

Michael K. Wirth -- Chairman and Chief Executive Officer

Good morning, Roger.

Roger Read -- Analyst

I'd like to ask you, Mike, the LNG markets globally, we've seen some new units get delayed. We've seen a couple of other companies this earnings season talk about the outlook in terms of supply/demand balance kind of favoring tightness in '25. Just curious how you look at it and maybe if you could remind us your contract versus spot exposure so we could think about how that might play to the margin potential for Chevron in '25.

Michael K. Wirth -- Chairman and Chief Executive Officer

Yeah. So LNG demand continues to grow, but it comes against a backdrop of very healthy inventories. You asked about two Inventories in Europe are strong for this time of year. Inventories in the U.S.

are very healthy for this time of the year. You see that reflected in Henry Hub prices. And so overall, we've got a market that currently has healthy inventories and reasonably good supply becomes somewhat weather dependent. And so that can change with a very cold winter.

But right now, I would say it doesn't look like 2025 is setting up to be a particularly tight market. And then longer term, of course, we have supply coming on in Qatar. We've got supply coming on in the U.S. And so there's more supply coming to that market.

And so I think in the short to medium term, it's a market that is not really prone to becoming nearly as tight as what we saw a couple of years ago when the situation in Ukraine began. Our particular portfolio is 80-plus percent contracted primarily on oil-indexed pricing on long-term contracts. Most of our sales are into North Asia and 20% or less spot exposure and a lot of that is out of our West Africa position and we'll have some spot cargoes from other parts of the system occasionally. But primarily long-term contracts primarily tied to crude price.

Thanks, Roger.

Operator

And moving on to Nitin Kumar with Mizuho.

Nitin Kumar -- Analyst

Hi. Good morning. Thanks for taking my question. Mike, I wanted to just maybe touch a little bit on the chemicals business.

It seemed like it was a bit of a tailwind to earnings this quarter. What are you seeing from your supply chain, particularly in Asia? You've heard about some stimulus to be offered there, but just looking at what the earnings look like for the chemist business.

Michael K. Wirth -- Chairman and Chief Executive Officer

Yeah. We actually polyethylene chain margins have strengthened over the course of this year. So it's been an improving market backdrop. Some of that, I think, has been some short-term supply disruptions in certain areas.

These are long-cycle commodity markets that demand grows kind of steadily but slowly supply comes on in big chunks. And so we've had a market that's been a little bit oversupplied, and that's put pressure on the olefin chains, particularly in Asia. And so I think over time, we expect to see margins improve. We've got a couple of projects that will come online in the second half of this decade.

And you can't time these things perfectly. But I think they're likely to come on after the trough and into what's an improving olefin chain market, one of those projects in the U.S., one in the Middle East. Asia is the big market, obviously. Naphtha and naphtha cracking being the alternative.

You do have some interrelation on margins with crude oil prices and if at the margin, Asia naphtha crackers or what an ethane cracker in the Middle East or the U.S. is competing with, you've got some interplay between those two. And so we'll watch it over time. CPChem is a well-run business, GS Caltex in Korea is a well-run business, and we've seen these kinds of cycles before.

We remain very constructive on this sector over time as we think the fundamentals will be very good and CPChem in particular, has a lot of ethane-based feedstock, which makes it very competitive. Thanks, Nitin.

Operator

And moving on to Ryan Todd with Piper Sandler.

Ryan Todd -- Analyst

Hey. Good morning. Maybe just maybe one on the Eastern Mediterranean. Can you maybe just provide a status update in terms of the current operations, the Tamar expansion efforts it's the next leg of potential expansion of commercial development there and what impact I guess, what is and is not happening or moving forward given the current uncertainties in the region right now?

Michael K. Wirth -- Chairman and Chief Executive Officer

Sure. So obviously, the first priority is the safety and well-being of our employees and the integrity assets. We have seen the demobilization of the pipelay vessel that was working on the current expansion projects at both Tamar and Leviathan as the contractor concluded that the risk environment was one that they were not comfortable with. We see both of those projects still being completed late next year.

We'll keep you advised. Obviously, this will depend on when that is remobilized. But we've got projects underway in the short term at both Leviathan to increase production by about 200 million cubic feet a day to 1.4 Bcf. And tomorrow is about 0.5 billion cubic feet per day from 1.1 to 1.6.

So those are on-track for late next year. We've entered feed for a larger expansion at Leviathan that would take us up significantly more. There's some room on the platform to add more processing capacity. That's a project that would be completed toward the end of this decade, and we're in feed on that now.

So more to follow. I think in the short term, obviously, we're going to make sure people are safe. We've had to actually take production at Leviathan down a couple of times because some of the risks in the region. But we're meeting all of our supply commitments, both in the country and to regional customers.

And been able to do that despite the conflict that's been underway.

Operator

And our last question comes from Alastair Syme with Citi.

Alastair Syme -- Analyst

Hi, Mike. And Mike, you talked earlier to the operated Permian position. I just wanted to get a sense of what you're seeing in the non-ARP royalty piece. Are we seeing a two-speed operating system in the basin with respect to what various operators are doing?

Michael K. Wirth -- Chairman and Chief Executive Officer

Yeah. We've seen strength across all three of the components of our business. Our club growth this year, as I said, is probably going to be a little bit higher than the 15% we've seen in the last three years. Royalty may be a little lower than that, JV a little bit higher.

I don't know -- I think you said do we see a two-speed development approach. I wouldn't say that. I'd say we're all kind of in the same fairway. Certainly, some of our JV and royalty is in highly attractive sweet spots.

And I think the economics on that are very good for our partners or our operators where we hold the royalty interest. And I wouldn't say there's significant enough variation between our program and what we see with others to describe it as a two-speed program if that was the question. Thanks very much, Alastair.

Jake Spiering -- General Manager, Investor Relations

I would like to thank everyone for your time today. We appreciate your interest in Chevron and your participation on today's call. Please stay safe and healthy. Justin, back to you.

Operator

[Operator signoff]

Duration: 0 minutes

Call participants:

Jake Spiering -- General Manager, Investor Relations

Michael K. Wirth -- Chairman and Chief Executive Officer

Eimear Bonner -- Chief Financial Officer

Jean Salisbury -- Bank of America Merrill Lynch -- Analyst

Mike Wirth -- Chairman and Chief Executive Officer

Neil Mehta -- Analyst

Doug Leggate -- Analyst

Biraj Borkhataria -- Analyst

Josh Silverstein -- Analyst

Devin McDermott -- Analyst

Lloyd Byrne -- Analyst

Betty Jiang -- Analyst

Paul Cheng -- Analyst

Bob Brackett -- Analyst

Lucas Herrmann -- Analyst

John Royall -- JPMorgan Chase and Company -- Analyst

Roger Read -- Analyst

Nitin Kumar -- Analyst

Ryan Todd -- Analyst

Alastair Syme -- Analyst

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Chevron (CVX) Q3 2024 Earnings Call Transcript was originally published by The Motley Fool