Integrated energy giant Chevron (CVX 0.44%) has released its capital and exploratory budget for 2014, which contains several key items for investors to consider as we approach the new year. The energy outlook heading into next year is one of mostly cautious optimism. The global economy remains on a path of steady, if unspectacular, recovery from the worst recession in decades. At the same time, domestic fiscal uncertainty and international geopolitical risk give energy majors like Chevron pause about how much to invest in 2014.

Capital expenditures are a primary focus when considering investment in one of the global energy majors. This is why Chevron's budget announcement contains some critical nuggets of information that investors need to be aware of.

Upstream gets the lion's share
Chevron's 2014 capital budget will total $39.8 billion, down from the $42 billion spent this year. In the company's words, 2013 will represent a "peak" year for investment. Chevron allocated a great deal of resources this year into aggressive land acquisitions, which are not expected to continue next year. Furthermore, Chevron was under considerable pressure from analysts and investors who believed its spending got a little out of hand this year.

Interestingly, a full 90% of Chevron's 2014 spending will be on upstream operations. It's not entirely a surprise that downstream operations would be somewhat left in the cold, since refining has been such a huge drag this year. Refining woes have crippled profits for the integrated majors including Chevron and ExxonMobil (XOM 0.02%), as the spread between U.S. crude oil and the Brent international benchmark narrowed. It should also be noted that the upstream is typically more capital intensive than downstream operations.

This has resulted in a severe profit decline for Exxon, and a more manageable earnings dip for Chevron. ExxonMobil has posted a 31% drop in net earnings in the first nine months of the year. For its part, Chevron saw a more modest 13% drop in net earnings through the first three quarters of the year.

Still, judging by Chevron's dwindled investment plans for downstream activities, it's apparent that the company has little confidence that refining trends will reverse in the near term. This could mean that the integrated majors that have significant downstream operations, such as ExxonMobil, will continue to suffer.

Chevron shuns the U.S.
Another startling find from Chevron's 2014 budget is that the company will allocate the vast majority of its spending on international projects. Upstream and downstream spending on international plays will account for nearly three-quarters of next year's budget. This is a surprise because many oil and gas majors, such as ConocoPhillips (COP -0.43%), are divesting international assets due to their pronounced geopolitical risks.

Consider that ConocoPhillips has divested $12.4 billion worth of assets from 2012 through the third quarter of 2013. Much of these assets were located in Kazakhstan, Algeria, and Nigeria. Supply disruptions quickly escalated in these areas, which prompted the move to divest.

Going forward, ConocoPhillips is taking a vastly different approach than Chevron. In ConocoPhillips' own 2014 capital budget, it plans to allocate 55% of its $16.7 billion in planned spending to North American projects.

Clearly Chevron isn't worried about investing in riskier parts of the world, and proved as much in its 2014 capital budget. However, investors should keep this in mind in subsequent quarters, as the level of geopolitical risk largely hasn't changed, nor is it likely to change any time soon.

The Foolish bottom line
Chevron's 2014 capital expenditure budget contains several key nuggets of information that investors would be wise to note. It's planning to reduce spending from last year, which reflects a level of broad macroeconomic uncertainty. In addition, Chevron will be devoting the vast majority of its efforts to upstream activities and toward international projects. These are truly surprising developments, given the boom in oil and gas production in the United States and the relative instability of riskier international geographies.

As a result, investors should carefully consider whether they agree with Chevron's strategies before buying the stock.