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Permian cash operating costs were the lowest this decade, driven by the long-term high return investments that we're making such as in facilities and infrastructure. We operate our assets with a full life cycle view. Our investments will continue to provide payback in the form of lower cost as our production base expands.

OxyChem and our Midstream business both achieved record fourth quarter earnings as a result of our integrated business model, which enables us to take full advantage of market conditions, such as delivering higher realizations from our Permian takeaway position.

In 2018, we grew cash flow to a level that exceeded both capital expenditures and our dividend, a key achievement we had been working toward since completing our portfolio optimization. Organic cash flow growth was driven by prioritizing the allocation of capital to opportunities that generate the highest full cycle returns.

We are pursuing cash flow growth with two key objectives in mind. First and foremost, to generate a higher return on capital, and second, to return an increasing level of excess cash to shareholders.

In 2018, we returned more than $3.6 billion to shareholders through our sector leading dividend and $1.3 billion of share repurchases under our $2 billion plus share repurchase program. We intend to complete the remainder of the share repurchase program in 2019. We remain committed to returning capital to shareholders through a balanced combination of dividends and share repurchases as we've done for a long time.

Since 2002, we've increased our dividend each consecutive year, and we've returned $33 billion to our shareholders through our dividend and share repurchases, that's about 70% of our current market capitalization. Almost 50% of this was returned in the last five years, the time period which included one of the worst downturns our industry has ever experienced. During this downturn, we also maintained our strong balance sheet and A level credit ratings.

Our focus on investing in our high-quality assets delivered a 2018 return on capital employed of 14% and cash return on capital employed of 27%, both significantly higher than 2017 and upper quartile performance versus our performance peer group. These achievements reflect our commitment to our value proposition, the strength of our integrated business model and the high quality of our assets.

We've made notable productivity and efficiency gains across all three business segments in 2018. The investments that OxyChem and our Midstream business completed in recent years paid off in 2018 as both segments optimize cash flow and delivered record earnings.

Our Permian business continued to outperform with Permian Resources delivering an impressive 52% production growth and Permian EOR exceeding cost reduction targets for the acquired Seminole CO2 field.

Our international business generated $1.4 billion in free cash flow in 2018 and has enormous potential to grow cash flow going forward. On our last call, Ken provided details of our new international opportunities. Now, we are pleased to have been awarded the new block in Abu Dhabi that Ken will describe in a few minutes. This new Abu Dhabi block along with six in Colombia and three in Oman make 10 new blocks added in the last year. These new international opportunities will add significant high-return, low-decline, development inventory to our portfolio.

At the same time, it's worth highlighting that these will require only a modest investment in the short-term. One of our key competitive advantages is our ability to develop assets in a way that efficiently maximizes oil production and recovery and generate significant cash flow growth over the next decades.

For the last three years, we've achieved all-in reserve replacement ratios exceeding 160% companywide. The 2018 reserve replacement ratio of 164% is due to the excellent technical work our teams have completed in enhancing subsurface characterization across our portfolio and building customized development plans. Our momentum has continued into 2019 as our business segments continue to invest in high-return opportunities.

Last month, we discussed various capital budgets for three different pricing scenarios, but we decided to limit our full capital spend in 2019 to $4.5 billion. This represents a $500 million or a full 10% reduction from 2018. By maximizing efficiencies, we are reducing spending to adjust to a lower oil price environment.

As activity is adjusted to meet full year capital spending of $4.5 billion, we expect spending to be higher in the first half of the year. In creating our capital budget to realize the highest returns, Permian Resources shale production will become a larger portion of our total oil and gas production. We expect this will increase our oil and gas base decline to 20% in 2019.

As we continue to invest in the Permian, we will advance our appraisal in the short-cycle low -- in the short-cycle low decline development opportunities at our new international block to prepare them for growth.

Our 2019 capital program is dominated by short-cycle investments, the majority of which will pay back within two years at $50 WTI. We will continue to be conservative, and if necessary within six months, we can reduce capital spending to sustainable levels, meaning that Oxy remains flexible throughout the commodity cycle. We will grow, oil and gas production by 9% to 11% in 2019 to replace the cash flow from Qatar in 2020, but our long-term annual growth rate forecast remains at 5% to 8-plus percent.

Cash flow growth is an inherent driver in generating a high return of capital and a higher return on capital. Our 2022 road map details the projects we will prioritize and execute over the next two years in order to grow cash flow from operations to $9 billion in 2022. While Permian Resources will continue to be the main driver of growth through to 2022, our international business will also grow in terms of both cash flow and production.

In addition to having many high return short-cycle opportunities, we also continue to benefit from the stable sustainable cash flow generated by OxyChem, Midstream and Dolphin. Even with the lower activity level and a significantly reduced capital budget for 2019, we still remain on track to achieve the low end of the 2022 cash flow range of $9 billion to $9.5 billion that we've communicated in our third quarter call.

As you will have noticed based on our expectations for the WTI spread, we updated our Brent price assumption for 2020 onwards. And this will have a minimal impact, based on our production sharing contracts.

To be conservative, we modeled OxyChem and Midstream cash flow at the low end of the previous range. And our projection of $9 billion in cash flow by 2022 does not include significant upside from several additional projects that we're currently evaluating. We'll provide updates on these projects as we advance.

This morning, Cedric will take you through our financial results and updated guidance, and Jeff will detail the continuous improvements we are creating in the Permian. Ken will then provide an update on our new opportunities in our international business. I'll now hand the call over to Cedric.

Cedric W. Burgher -- Senior Vice President & Chief Financial Officer

Thanks, Vicki. As Vicki highlighted, we are pleased to have continued repurchasing shares, allowing us to return $900 million of cash to shareholders during the fourth quarter and over $3.6 billion in 2018, including our dividend.

On Slide 10, I'd like to start with our earnings, which improved across all segments year-over-year. For the fourth quarter, we had core earnings of $1.22 per diluted share and reported earnings of $0.93 per diluted share. The difference between reported and core income is attributable to an impairment charge of $220 million, which was driven by lower oil prices. Earnings also included a net tax benefit of $224 million, which significantly decreased our fourth quarter effective tax rate. And it consisted of $100 million for additional EOR tax credits, and tax credits related to U.S. export sales, $99 million for releasing a foreign withholding tax accrual, and $25 million for changes related to the 2017 Tax Reform Act.

Oil and gas core income decreased in the fourth quarter compared to the prior quarter, reflecting lower oil and NGL prices, as realized prices declined by 10% and 23% respectively from the third quarter. Fourth quarter, oil and gas results included a non-cash mark-to-market change related to our CO2 purchase contracts as well as higher operating and DD&A expenses in Qatar, as a result of the ISND contract expiration later this year.

Total fourth quarter reported production of 700,000 BOEs per day was above the midpoint of our guidance due to the continued best-in-class execution and well productivity in the Permian Resources, which resulted in 250,000 BOEs per day during the quarter at the top end of the guidance range, and represents an exit-to-exit increase of over 57%.

Total international production of 290,000 BOEs per day was slightly lower than guidance primarily due to the oil price adjustment in our production sharing contracts in Oman. The contracts utilize a pricing mechanism with a two-month delay, which resulted in a higher realized price and lower production for Oman in the fourth quarter.

Fourth quarter international production was also impacted by weather and accelerated maintenance. OxyChem continues to perform strongly, reporting its highest fourth quarter pre-tax income ever of $223 million, above guidance of $220 million. Earnings decreased from the third quarter, primarily due to expected seasonality and end market demand for chlorovinyl products as well as lower realized caustic soda pricing and higher natural gas and ethylene costs.

Our Midstream business reported record core fourth quarter earnings of $670 million, which exceeded the high end of our guidance due to positive mark-to-market movements and a higher than expected Midland to MEH differential. Compared to the prior quarter, fourth quarter earnings reflected lower marketing margins due to a decrease in the Midland to MEH differential from $16.67 to $15.31, and lower pipeline income from the sale of the Centurion pipeline in the prior quarter.

Fourth quarter revenue and cost of sales were both grossed up by $340 million due to the accounting treatment of certain Midstream contracts where we've used our excess takeaway capacity from the Permian to purchase and resale third-party barrels. The third quarter gross up amount was $327 million.

Operating cash flow before working capital for the fourth quarter was $1.9 billion, which covered our capital expenditures of $1.3 billion and dividends of $594 million. Our total year capital spend came in just under our planned spend amount of $5 billion.

Slide 11 details our guidance for the first quarter and full year 2019. As Vicki mentioned, we will pursue high-return reinvestment opportunities in 2019 that will be funded by a total capital budget of $4.5 billion, which will result in annual production growth of 9% to 11%. We are reducing capital spending year-over-year, and due to technical and operational advances we are still able to deliver significant cash flow growth.

As we advance into 2019, our balance sheet remains strong and we have ample liquidity available to complete our share repurchase program. We ended 2018 with over $3 billion in cash and still hold PAGP units with a market value of approximately $700 million.

I will now turn the call over to Jeff.

Jeff Alvarez -- Vice President, Investor Relations

Thank you, Cedric. 2018 was an outstanding year for our combined Permian business, as we improve the value of our conventional and unconventional assets, through our value-based development approach. We're able to add high margin barrels and generate great returns on our investments. We replaced 216% of our production with new reserves through industry-leading performance and successful appraisal.

Combined total year production for Permian Resources and Permian EOR grew 77,000 BOEs per day compared to 2017, and exceeded 400,000 BOEs per day in the fourth quarter. We lowered Permian operating cost 9% by utilizing advanced data analytics artificial lift implementing new water recycling technology and improving maintenance efficiency across the Permian.

Permian Resources has a simple model that I love called leave no doubt, which refers to our relentless pursuit of generating the best returns in the industry. In 2018, we made tremendous progress toward achieving this principle as we increased our total production 52% and exceeded our initial 2018 guidance by 12,000 BOEs per day. Our subsurface characterization improvements have driven breakthroughs at an accelerated pace.

By integrating advancements in geoscience with our 12,000 square miles of 3D seismic and subsurface characterization models, we are rapidly achieving step change improvements in well design and placement. In 2018, we improved our average six month cumulative production by 25% compared to 2017. Over the last 12 months. Oxy has delivered 40% of the top 50 horizontal wells in the basin, which is the most for any operator, while only drilling 5% of the total wells over the same time period.

On the capital efficiency front, our operational improvement initiatives continue to drive efficiency compress time-to-market and lower full cycle costs. In 2018, we increased our feet drilled per day by 19% and we drilled record 15-day 10,000 foot wells measured rig release to rig release in both our New Mexico and Texas Delaware areas.

On the base management front, our investments in operability and surveillance are transforming how we optimize our base as demonstrated by our 10% reduction in operating cost per barrel in 2018. In addition to efficiency improvements, we're also achieving major advancements in artificial lift optimization and well enhancements to lower the base decline rate. The rate of progress in Permian Resources is extraordinary, and will lead us to exceed 600,000 BOEs per day for this business alone within the next five years.

Our Permian EOR business also had a great year. We continued integration of the Seminole-San Andres unit and have now lowered OpEx by $8 per BOE, since we took over operations in September of 2017. We started injection on new grassroots CO2 flood at the West Sundown unit, which started injection four months earlier than planned and will achieve a development cost of under $6 per BOE.

Permian EOR continues to provide low decline cash flow and high returns for our shareholders. We are excited about the critical role it will play in our long-term business sustainability strategy, especially as we leverage our position and expertise to reduce our carbon footprint.

Slide 14 provides more detail on the 2019 capital program. Permian Resources will comprise $2.6 billion of our $4.5 billion total capital budget in 2019. We will utilize approximately 12 operated rigs and one to two net non-operated rigs with development focused on our core areas. We plan to operate six to seven rigs in New Mexico, which will primarily develop the high-return Bone Springs and Wolfcamp formations.

We will continue development in the areas proved to be highly prolific in 2018 and plan to allocate activity to the tanks area of Greater Sand Dunes in the second half of the year. The appraisal results from tanks area have been outstanding, with three wells online in 2018, averaging over 3,000 BOEs per day, per well for 30 days.

In Texas Delaware, we will operate five to six rigs, primarily developing the Wolfcamp A and Hoban formations. The tapered well design we implemented in the second half of 2018 has significantly improved the returns of our new wells and we expect to see continued improvement through 2019.

Overall, our capital program for 2019 will generate significant value for our shareholders and result in 30% to 35% annual production growth. We will also be advancing the commercialization of unconventional EOR development and expect to share more information on results later in the year.

As you can see, 2018 was an exceptional year for our Permian businesses. We set well productivity records, significantly lowered operating costs and realized breakthroughs with data analytics and subsurface characterization that improve the returns from our assets. 2018 may seem like a hard year to be, but the organization is more energized and capable than ever, and I'm sure we will leave no doubt in 2019.

I'll now turn the call over to Ken to discuss international.

Kenneth Dillon -- Senior Vice President & President, International Oil and Gas Operations

Thank you, Jeff, and good morning, everyone. As Vicki and Cedric mentioned 2019 capital plan focuses on investing in projects that grow cash flow and generate the highest returns. Today, we're pleased to share the details of onshore Block 3, which is a new 35-year concession in Abu Dhabi. We feel honored to expand our relationship with ADNOC and the first award of its kind onshore. With Block 3, as well as the new onshore blocks landed in Oman and Colombia, we feel we have established a clear pathway for Oxy to grow sustainable cash flow, from our low decline long life international assets. We certainly appreciate the recognition as a partner of choice.

As shown on Slide 16, Block 3 covers an area of approximately 1.5 million acres, which is slightly greater than the total of our net unconventional acreage in the Permian. We have high expectations for this Block, given its location between the prolific oil fields of Abu Dhabi and Oman. It's also adjacent to Al Hosn Gas project.

As I mentioned on the last call, our regional geological knowledge is best-in-class and continues to develop. We utilize that experience in preparing our initial stacked pay prospect inventory for Block 3. In 2019, our capital spend in Block 3 will be modest. The initial scope of work involves participating in the state-of-the-art 3D seismic acquisition and interpretation.

Our plan is to initiate drilling in 2019. Expanding our footprint in the UAE in such a meaningful way, especially through a 35-year concession has allowed us to enhance our long-term international portfolio at an attractive price of entry. Additionally in Abu Dhabi, we continue to look at cost effective ways to debottleneck the Al Hosn Gas facilities.

In Colombia in partnership with Ecopetrol, we have signed an agreement to develop Blocks 39 and 52. These blocks are adjacent to our giant Cano Limon field and therefore we had successful discoveries this year.

In addition, we farmed into four blocks in highly prospective Putumayo Basin, where we have regional knowledge of the reservoirs. With these blocks, our net acreage in Colombia has risen to approximately 1 million acres of the low cost of entry like your other recent word's capital will be small in 2019.

In terms of performance, our Oxy international drilling teams continue to improve performance, and since 2014 have saved approximately $650 million for Oxy and our partners.

As well as improving efficiency cost and time to market, the international safety performance was again world-class. Our international exploration programs in 2017 added $47 million BOE of resources and bettered that in 2018 by adding $94 million BOE of resources. While at the same time opening up new plays, finding costs were around $0.76 per BOE.

In closing, we expect 2019 to be an exciting year for Oxy internationally, as the exploration programs in our new blocks for gas, we will continue to provide updates on significant developments. As you can see, the work we are executing closely aligns with Oxy's key technical competencies and returns focus and our true partnership.

I'll now turn the call back to Vicki. Thank you.

Vicki Hollub -- President & Chief Executive Officer

Thank you, Ken. Before we go to Q&A, I'd like to emphasize that we believe the strongest oil and gas companies of the future will be those that have a shareholder focused value proposition. And the structure and the sustainability do withstand the oil price cycles, while also maintaining a social license to operate in the world in general and operate in the low carbon world.

Our value proposition will continue to deliver a growing dividend, an upper quartile or maybe best-in-class returns to our shareholders, while also growing oil and gas production 5% to 8-plus-percent annually. Unlike many companies in our sector, we delivered this through one of the longest downturns our industry has faced.

Our company is primarily an upstream oil and gas company with integrated midstream and chemicals business that add significant value and provide important support during low oil price cycles. The diversification of our upstream oil and gas business also provides strength in periods of low oil prices, along with substantial upside and higher oil price cycles. This upside is made possible by our short-cycle high-return unconventional assets in the Permian, along with the new conventional opportunities that we just picked up in Oman, Colombia and Abu Dhabi.

Our strength in a low price environment is bolstered by our very low decline enhanced oil recovery projects in the Permian, Oman, and Colombia. I'm specifically referring to our CO2 and waterfloods in the Permian, our waterfloods in Northern Oman, our steamflood in Mukhaizna, which happens to be one of the largest steamfloods in the world than our new TECA Steamflood in Colombia.

Our production sharing contracts in our low-decline gas projects and often in Al Hosn also provide significant support in low oil price cycles. I believe there is no other oil companies in the oil and gas industry that has this blend of high quality, focused oil and gas projects to provide this diversity. This is why we can't continue to deliver our value proposition.

Not only do we have a great blend of assets with the addition of our new blocks, we have an incredible inventory of development opportunities. Over the past few years, we've replaced our production with new reserves at a ratio of greater than 160%. With the inventory we now have, we expect to achieve that replacement ratio for the foreseeable future. This ensures the sustainability of our value proposition.

With respect to our social license to operate, our commitment is to manage our business in a way that improves the quality of life for our employees, contractors and the communities where we operate, while also minimizing the potential impacts of our operations. Our employees are the lifeblood of our company. They are the drivers of our success, and as such, we are committed to their continued development and to helping them address the challenges of work-life balance.

Many people refer to this as human capital management, but I don't. These are our people, the Oxy family, not just capital. It's personal to us. We want their lives to be the best that they can be at home and at work. This will enable them to be engaged and ready to deliver the best possible value to our shareholders as they have done in a significant way during this downturn. And in the areas where we operate, we want to ensure that we have a positive impact and can find ways that improve the quality of life in the community.

Lastly, but equally as important is our commitment to use our unique skills and assets to lead carbon capture use and sequestration or CCUS starting in the United States and ultimately in other parts of the world. Along with many other initiatives, CCUS is necessary to limit the impact of climate change.

With our CO2 enhanced oil recovery expertise and projects in the Permian, we believe we can lead the effort to capture current CO2 emissions from industrial sources to use and sequester in our Permian reservoirs. This will benefit the climate and our shareholders.

As we have previously mentioned, we now have a low carbon team, whose mission is to seek opportunities to innovatively reduce our carbon footprint in ways that also improve our operations and thus are expandable and sustainable. Our comprehensive strategy addresses all the factors that make our company great and sustainable. I believe this has built us into a next generation company that is uniquely positioned to excel in our changing world.

We'll now open it up to your questions.

Questions and Answers:

Operator

We will now begin the question-and-answer session. (Operator Instructions) And our first question will come from Roger Read of Wells Fargo.

Roger Read -- Wells Fargo -- Analyst

Yes. Good morning. How are you? Hope everybody can hear me.

Vicki Hollub -- President & Chief Executive Officer

Hey, Roger. Good morning.

Roger Read -- Wells Fargo -- Analyst

Yes. Just wanted to kind of come out at from the capital discipline side. Obviously, the presentation you put out in January highlighted that you would live within cash flow at a given oil price. Good to see the higher growth rate 9% to 11% versus 10% to 8%. But I guess really my question is along the lines of trying to think about how Oxy and maybe the broader E&P space fits here which what you're trying to do versus maybe what we're seeing out of the super majors in terms of increasing activity in the Permian?

And then we haven't seen the magnitude of drop off. I think we would have expected out of some of the private companies. So as you think about capital returns, capital discipline, but then, maybe a little bit of the risk of being squeezed between these other two components. How do you kind of square that circle up and what do you see as the driver for how you want to run the company?

Vicki Hollub -- President & Chief Executive Officer

The driver for us is to maximize returns, and so the way we put together our development programs is we don't try to design for peak rate production. We really try to design all of our development programs and our comprehensive development of the Permian, with the synergies between EOR and resources. We try to design that in a way that creates the highest net present value.

And I can tell you we're not trying to outpace the majors. We're trying to outperform the majors. And I think that we're clearly doing that in the Permian at this time. I think it's from the standpoint of our programs versus theirs, we're doing a lot more with the rigs that we employ today than many other companies are with almost double the rigs that we have. And our focus is more on making sure that every dollar win, and thus creates more value, and so we're trying to really work the side of maximizing recovery from the reservoir and minimizing our cost.

So it's not a race for us to outpace them, and we have teams that have built our infrastructure and our position and our relationship in a way that grow as they will, they will not impact our operations. We believe that we're perfectly positioned to be able to do the things we need to do. We have the takeaway capacity, we have the export capacity, we have the infrastructure within the Permian. So we're positioned there and I think in a catch up mode at this point.

Roger Read -- Wells Fargo -- Analyst

Okay, thanks. And then, Jeff, just the part you mentioned about data analytics. I understand it's helping, is there any quantification that you can offer on the front or either what's been captured to date or what you would expect going forward?

Jeff Alvarez -- Vice President, Investor Relations

Yes, I think the real quantification is when you look at performance improvements and ultimately what's going to play out from a capital efficiency standpoint. So I think when we point to our well performance and our development performance, all of that or a good portion of that is being driven with how we utilize data analytics.

And the thing I'd point to the most is, as you can see our development, our performance isn't based on a lot of trial and error, it's largely based on our ability to go in, understand the reservoir from the subsurface standpoint, utilize the huge amounts of data that we have in an effective way, and come up with an optimal development that delivers very good results from the beginning not in the trial and error mode where you have to deploy a lot of capital that gets underutilized.

And so, it's almost unfair to point out, we use artificial lift, because that's where we've made some huge breakthroughs, but we are applying data analytics in almost every aspect of the business, the subsurface characterization when we talk about the most because it's so impactful. But it's being used universally across the business, and there's example after example on how that's creating value.

Roger Read -- Wells Fargo -- Analyst

Great, thanks. And it's OK from our perspective, if you want to be unfair, when we're thinking about other stocks.

Jeff Alvarez -- Vice President, Investor Relations

Thanks, Roger.

Operator

And our next question will come from Bob Morris of Citi.

Robert Morris -- Citigroup -- Analyst

Thank you, and good afternoon, everyone. My first question, Vicki, is with regard to again on the capital discipline side, you've kept the budget this year at $4.1 billion. So you can return any cash generated above $50 a barrel to shareholders, but then beyond this year you're stepping back up the CapEx. And to do that, you're spending -- you end up spending cash above $50 a barrel. And I know you have to do that to still hit your 5% to 8% production growth target.

But to what extent would you consider continuing like you do in this year to sort of cap any spend to return cash above $50 per barrel to shareholders. I know that would put your growth at the lower end of your range. And you still attain double-digit growth out of Permian Resources. So is there a scenario where you may continue, like you do in this year, beyond this year to then return any excess cash above $50 a barrel to shareholders?

Vicki Hollub -- President & Chief Executive Officer

Our assumption for 2020 was based on our belief that oil prices will be at $60 in 2020. And if that's the case with the budget of $5 billion to $5.3 billion we would still be able to return cash to shareholders. And we want to continue to, at some point, grow our dividend more meaningfully, and Cedric will talk about that a little bit later, but our $5 billion to $5.3 billion capital budget would allow for us above a $60 environment to return cash and that's what -- that's something that we've always done, as I mentioned in my script, and something that we'll continue to do. We take a balanced return of cash to shareholders through repurchases and a strong dividend with the right balance between those is important to continue.

Robert Morris -- Citigroup -- Analyst

Sure. I appreciate that. So my second question is for Cedric. Cedric, last quarter you mentioned that M&A was part of Oxy's DNA. And so at this stage, do you see any A&D environment more conducive to opportunities for Oxy out there or you grow more optimistic with regard to potential acquisitions adding to your portfolio in the Permian?

Cedric W. Burgher -- Senior Vice President & Chief Financial Officer

Well, it's -- we've certainly seen a few -- some activity picking up in M&A. I would say from Oxy's perspective, we are always aware, and we keep ourselves very informed. We look at a lot of opportunities, it's rare when we don't get a call, when there's something coming to market. But if you look at our organic growth opportunities as we've described, they are robust across the globe and across each business sector.

So we don't have to do a deal, and we only want to do a deal if it's going to be very accretive to our shareholders and for value. So we do see ourselves over the long run, being a consolidator. That's one of the things that goes with our opportunities that goes with being a low cost producer. We consider ourselves one of, if not the lowest cost producer in the basins and places we choose to operate. So I think there will be consolidation opportunities over time as I've said before. However, it needs to be a compelling deal for us and for our shareholders. And that's how we look at it.

Robert Morris -- Citigroup -- Analyst

Is there an advanced catalyst that sort of spark an increase in consolidation, not necessarily for Oxy, but across the Permian at some point?

Cedric W. Burgher -- Senior Vice President & Chief Financial Officer

That's hard for me to predict. There's certainly a lot of assets and small private companies that don't seem to have the scale or the technology to put themselves in a low cost producer status. So at some point, perhaps those come to market at more reasonable prices. There have been a few, but it's hard to predict those things. We're certainly ready when that happens. And then otherwise there are other operators that are trying to figure out if they can make breakthroughs that we have and so on, and it'll just be something that will be -- to be determined. It's hard to predict.

Robert Morris -- Citigroup -- Analyst

Yes, (multiple speakers). Thank you. Yes.

Jeff Alvarez -- Vice President, Investor Relations

Hey, Bob, this is Jeff. I mean the only thing I'd add to what Cedric said, if you look at the Permian's history, it's consolidated when the business get really hard. Prices drop, margins get squeezed and then consolidation generally happen. I think when you look across the unconventional space, you all know better than anyone, the business continues to get harder, not easier as people move to full section development having to operate with low operating costs, manage infrastructure, large KOLs, all those things. So we're definitely progressing to where you're starting to see differentiation between those that are good operators and those that maybe aren't as good.

Robert Morris -- Citigroup -- Analyst

Yes. And I agree Oxy has positioned very well in that type of environment, so I appreciate your comments. Thank you very much.

Operator

The next question comes from Paul Sankey of Mizuho.

Paul Sankey -- Mizuho Securities -- Analyst

Good afternoon. Just couple of points of clarification on your presentation, if I could. On Slide 4, you stated that you drilled less then 5% of the horizontal wells in the Permian, but have 40% of the top 50 well results. Could you expand on that a little bit in terms of what you're comparing and how you're comparing that? Thank you.

Jeff Alvarez -- Vice President, Investor Relations

Sure, Paul. I'll take that. Basically if you go to, anyone who has the deck opened, Slide 31 shows that. So there's lots of ways to measure performance. The specific measure that we use is the cleanest as to where we look at over the last year, top 50 wells from an IP standpoint. Where are they, who has them, and then you can see on the left, we've got 20 of the top 50 over the last year. We've showed this for several quarters, so you can see how it moves around, and how it progresses. And that 40% of those were the top operator when you look at the data.

And another thing we add to it, on the right, which is something we often talk about is, we're able to do it with less propane. And the reason we highlight that is twofold. One, it's a big cost driver. Obviously, you all know, the more propane you pump the more cost. But two, it really indicates how we customize our development. You can see, we don't have a universal number where we use 2,000 pounds per foot on every well we vary it, and that's a function of our development strategy and our understanding of the subsurface to get really, really good wells in a customizable way.

The other thing I'd point you to, Paul, one thing we put in there because the question we keep getting asked all the time is our results continuing to improve. And it seems like every time you show a comparison of results, they're normalized by something, or you cherry pick which wells you use, you exclude this, you include this.

So we include a slide in this deck that I'll point out Slide 28. So what this slide is? It shows our six-month performance for every horizontal well. We didn't cherry pick which wells that go in there, all appraisal wells, all development wells, all of our wells are in every year that you can see for '15, '16, '17, and '18 across Midland Basin, New Mexico, Texas Delaware, and it answers the fundamental question of are we able to continue to improve? And you can look at each year and there's reasons that vary on why we're improving. Some years it may be more lateral link, some years it may be better completions.

Every year is being driven by a better understanding of the subsurface and so there's lots of things driving that. But the fundamental question of are we continuing to improve, I think is answered with the slide. And what makes it even more impressive is when you dig into the details and you look at 2018, that's with 90-plus-percent of wells that have an offset, so characterized as children wells. So the big debate on our children wells for some parent wells, we can have that discussion, but fundamentally, you can look at for many different reasons, we continue to get better well performance every year.

Paul Sankey -- Mizuho Securities -- Analyst

Thanks, Jeff. And a follow up along the lines of clarification. On Slide 7, you talk about unconventional EOR commercial success in 2019. Could you talk more about that I'm not sure what you mean there? Thank you.

Vicki Hollub -- President & Chief Executive Officer

We have in the past on for CO2 injection pilots in the Midland Basin to test the efficiency and the commerciality of CO2 flooding the shale and that's in the Midland. And what we're looking at in the Southeast New Mexico area is more of a enhanced oil recovery with using hydrocarbon gas injection which would do two things for us. First, it would help us to maintain pressure; secondly, it would become also somewhat miscible in the oil and would make it the same as CO2 does, make it more or less reluctance to flow, lower the friction, improve the ability to flow the oil from where it is to be freezed to help in performing a full string.

What we intend to do in Southeast New Mexico would be a continuous injection that would be full stream, so we're going to test that. We believe based on our models that it will work, and part of the objective there is to try to lower the decline of the resources business and we believe that we will successfully do that over time.

Paul Sankey -- Mizuho Securities -- Analyst

Understood, Vicki. Thank you.

Vicki Hollub -- President & Chief Executive Officer

Thank you.

Operator

And next we have a question from Ryan Todd of Simmons Energy. Mr. Todd, your line is open.

Ryan Todd -- Simmons Energy -- Analyst

Sorry. Looking forward, as we think about the normalization of CapEx that you highlight back toward kind of the $5 billion to $5.3 billion level beyond 2019, is the incremental capital driven -- in that case, driven more by an acceleration of activity in the Permian Basin or by resumption of activity in international regions?

Vicki Hollub -- President & Chief Executive Officer

It will be both. The incremental capital in 2020 will be spread between our resources and the international areas, part of which will go to the growth areas. We do expect to start seeing. We're going to continue growth from our base areas internationally through exploration and some of the other things that we're doing, but we'll pick that up as in the new areas as we complete our appraisal programs. Now, the bulk of the growth capital is still going to get resources in 2020, but we will send more to these to the new areas.

Ryan Todd -- Simmons Energy -- Analyst

And maybe on that as well, maybe you referenced some of the base case kind of assumes $60 crude in 2020. If you were to -- if we were to be at $50 again in 2020, would you see a similar type of program that we see here in 2019, where you continue to kind of smear out international investment and run a moderated program in the onshore.

Vicki Hollub -- President & Chief Executive Officer

It will be dependent really on where we are with respect to our cash flow. Our commitment is to stay keep our capital programs within cash flow going forward. So we're in the $50 environment, with what we're seeing from efficiency improvements in our increase in production in 2020. I wouldn't say that we would be at the 4, 5, it would depend on how our costs you're looking then and everything else, but we would stay within cash flow.

Ryan Todd -- Simmons Energy -- Analyst

Great. Maybe an unrelated question. I appreciate some of the details you provide on water sourcing. Can you talk through how you see a potential risk of increasing costs from water disposal going forward, particularly in the Delaware Basin? And how are you set up the handle water disposal over the long term?

Jeff Alvarez -- Vice President, Investor Relations

So, one think -- this is Jeff. So one thing, given our full cycle value focus water infrastructure is really, really important in all of our development areas from the very beginning. So if you go look at New Mexico and how much we're recycling up there, the size of our water infrastructure in Texas Delaware, I mean, we see it not only as a risk to the business if you don't manage it properly, but definitely a significant economic risk if you can't do it well.

So one of the things we do from the very beginning, however when we go into a development area, just ensure we have water infrastructure in place to collect the water, recycle it where we can as much as we can, and then have numerous disposal outlets from when we're done, whatever water is left over.

And so, I'd say, in all of our development areas, we're very well positioned, and where there are some areas that have different risks than others, some may be cost and just availability. Some may be permitting related seismic city or whatever it is, we've identified it mitigated those risk in all of our development areas.

Ryan Todd -- Simmons Energy -- Analyst

Thanks, Jeff.

Operator

And the next question comes from Brian Singer of Goldman Sachs.

Brian Singer -- Goldman Sachs -- Analyst

Thank you. Good morning. Couple of questions with regards to the longer term outlook here. In the years to come, how do you see your scale in the Permian impacting global unit operating and G&A costs. Do you see these costs falling flat arising on a per BOE basis? And then what's base cased into that 2022 cash flow plan? And then if I might add to that separately, and you talked a little bit about this earlier, what gives you confidence to base case production in Oman and UAE even if it's three to four years out of their key milestones that we should be focused on between now and then?

Vicki Hollub -- President & Chief Executive Officer

First, with respect to the G&A, the G&A on a per BOE basis will be coming down over time. So that should be the case and that's what we've assumed in our 2022 plan. The other thing that with respect to the milestones, the milestones are listed on Slide 7, and what we tried to give you there is more of a road map of how we're going to get there in the international blocks, particularly with some information about the unconventional EOR and when that might happen. But, this is essentially the road map we wanted you to be able to see. So you can check what's happening as we go.

With respect to what -- yes, with respect to what the performance will be is sort of going to be based on analogs. Ken pointed out something to me just recently and that is that if you look at the four countries that are contiguous there, you look at -- we're probably the only company that is operated in all four of those countries that have this similar trend. So we have a lot of experience in this trend and we can do analogs that help us understand how to forecast what to expect. So we have a lot of good information around that, but with respect to the road map, I'm going to let Ken tell you a little bit more about that.

Kenneth Dillon -- Senior Vice President & President, International Oil and Gas Operations

Thanks, Vicki. If we start with the mine in the north, the game plan is to further define the hydrocarbons in Block 30 and 51, in order that we can optimize the regional development, by potentially using our existing Block 62 as a hub for facilities. On a previous call, I was asked, would we spud the well in Block 30 before the end of last year we did. It's an on trend discovery, and in fact we found a new zone that we were not expecting. We plan to drill a follow on well this quarter.

On Block 51, we're reprocessing the existing seismic lines and plan to be drilled ready by Q3 this year, which let's us look at the hub concept for Block 62. We think hub-and-spoke is the best, the most efficient way to develop this area. In Block 72, we've start exiting seismic and we hope to have usable data by Q2 2020. But we may use some fast-track pay temporarily drilling.

Again, the royal targets there are similar to those we've seen in our existing Block 53 hub, again hub-and-spoke concept to maximize efficiencies. In Abu Dhabi, we were delighted to lend Block 3. The Block is 90 miles long, 30 miles wide and very few wells have been drilled there since the 1970s. It's in a great location, not only because of proximity of super giant fields, but also because of infrastructure for success where we can hook up to flow lines very quickly and get a royalty export very quickly.

I mentioned earlier, we will spud a well this year. We've already mapped 162 prospects and 11 stacked reservoirs as targets, and we will tune these based on the new 3D seismic, which we think is some of the most cost efficient seismic ever obtained by anyone in the industry. Overall, we've tried to detail the milestones for Oman and Abu Dhabi, and Colombia. We are ramping up TECA, we will drill 30 wells this year and TECA and will stream online to them this year, replacing all our long lead items for TECA, which will enable the ramp up to continue through 2020, 2021. And as Vicki said, we're continuing to explore in our core existing assets also. So we tried to make the road map, something that we can update you on periodically as we get good results. And I hope that answers your question.

Brian Singer -- Goldman Sachs -- Analyst

Great. Thank you. Yes. And my follow up goes back to the Permian. And you highlighted some of the areas of efficiency and productivity gains in your comments, and so far in the Q&A. I think if you look at across the landscape, even among larger scale -- and more scale into Permian companies for a company of your Permian Resources production base, you're planning to grow production at a rate that other E&Ps tend to spend more in capital to achieve than what you're projecting. Can you just talk to what you see as the risk around the Permian capital and production plan this year? And to what degree Aventine hub is going to be a driver of further capital efficiency or whether that's already essentially been reflected in recent CapEx results?

Jeff Alvarez -- Vice President, Investor Relations

Yes, Brian, this is Jeff. That's a good question. So, I mean the risk -- we feel really good about the areas we're developing and because they are -- one, they are core development areas we know them really well. There's not a huge appraisal component to it. There is a little bit. Again, like last year, we drilled a lot of development wells, so we weren't just out drilling single wells. It fits that same well, so it's a progression of areas we feel very comfortable with technically. So from a well performance risk, I think it's very, very low.

The biggest risk I see is actually, from our performance standpoint, we're starting to see high productivity gains and lower time to market, drilling faster and things like that. So the biggest challenge I see with us is as that continues, what do we do when that pace keeps picking up. But from a cost standpoint, Aventine is up and running. So we've realized two-thirds of the benefits from that. We feel very comfortable with that.

We have our people in place. I mean, one of the things we did very early on is not just wait until we have the activity to start getting all the right resources in place. So, I really feel like our program is de-risked from execution standpoint, cost and performance standpoint, for this year, especially at the pace we're going. Because like Vicki said, running 12 rigs for us is a very moderate pace, especially compared to many others, and especially compared if you go back a few years ago, we were at 40. So it's well within our bandwidth to handle this, not just execution, but technically.

Brian Singer -- Goldman Sachs -- Analyst

Great, thank you.

Operator

And the next question comes from Doug Leggate of Bank of America Merrill Lynch.

Doug Leggate -- Bank of America Merrill Lynch -- Analyst

Thank you. Good morning, everyone. Cedric, I wonder if I could just get some clarification from you on Slide 21. And I guess I'm also comparing it to the slide you put up specific to 2019 capital back, and I think there's a conference at the beginning of the year. So what I'm really trying to understand here is so $50 TI post '19, you're capping your spending, is that the way to think about this and above that is going back to shareholders?

Cedric W. Burgher -- Senior Vice President & Chief Financial Officer

Yes, hi, Doug. Good question. I appreciate the clarification. We weren't intending to continuing to have -- be precise where you move from one penny to the next and that shift gears. But it's indicative of our -- the way we think about it, it was been, I guess two years ago when we came out with our break-even plan, which allows us to sustain a world-class dividend and keep our production-based flat, at $40 oil. And what we're doing today, two years later is nothing short of amazing in terms of beating those assumptions, beating that plan. We're beating our own cost. As Jeff were beating it on productivity of our wells.

And so, as we continue to lower our break evens just by the way, that is one of the keys to us raising our dividend at a more meaningful rate. We've continued to raise our dividend 16 consecutive years, but it's been more modest since the downturn, more modest rates. We'd like to go back to more aggressive rates. But the key to that is lowering our break-evens, and delivering more cash flow from that. So, but above $40 we are looking to reinvest first in kind of look get to that 5% to 8% target. Long-term growth rate, continued modest dividend growth. And then above the $50 we are looking at both balance sheet improvement as well as share repurchases, and that's something we certainly demonstrated last year.

So, I wouldn't give you a precise at $50.01. We're going to share buyback that number or dividend increase, but it is how we're thinking about it, as you get into a certainly in a $60 environment which is what we're forecasting through the 2020. We think that is a logical price for the industry to balance supply and demand that is something we would look to do is return more capital at that point, we don't need to grow any more than that 5% to 8% long-term target.

Doug Leggate -- Bank of America Merrill Lynch -- Analyst

I understand. I appreciate the clarification because I just wasn't -- I think there was an earlier question that sounded like it was different, but that's very clear. Just to talk on that very quickly. The 50 TI I assume your still using a $10 differential for Brent?

Cedric W. Burgher -- Senior Vice President & Chief Financial Officer

Yes.

Doug Leggate -- Bank of America Merrill Lynch -- Analyst

Okay. My follow-up and is also related to the dividend. So I know you have talked about this many times in the past. But, if you're at $9 billion, let's assume in a couple of years time or let's assume more oil maybe is a little more generous in between times. Is your first priority to reduce the dividend burdened by buying back stock because on a per share basis, you still get the growth if you buy back the stocks. How should we think about absolute dividend growth versus per share growth through share buybacks? I'll leave it there. Thanks.

Cedric W. Burgher -- Senior Vice President & Chief Financial Officer

Right. Great question. I mean we see dividend and share buybacks is complementary. I will say, our first priority is always the dividend. We proved that in the downturn. We're one of the few high dividend paying companies that didn't cut the dividend. There's long trail bodies of companies that did. We're very proud of our track record in a very tough time. So, our priority is and always will be the dividend. We want to -- we will continue to grow it. That's our intent. And we certainly want to grow it even more meaningful rates as we were able to, Ken, can't forecast when that will be, but as we think about higher prices that certainly like I said earlier, when we start to think about buybacks and is complementary as you stated, because it does reduce the share count, which enables us to a 4 dividend growth more easily. So -- but certainly that $9 billion that we're forecasting in 2020, should we have a $60 environment?

If you back out the midpoint of the CapEx range at that time of $5.1 billion, that leaves you $3.9 billion of free cash flow that compares to a current dividend of about $2.4 billion. So that's more than a 50% cushion on that dividend if you will, that would allow you in a $60 environment to both grow the dividend and do buybacks. So, I think we would be in a very good position at even a modest improvement in oil prices over that time to be in a really good position to deliver, return a lot more capital and we would do it in both dividends and buybacks, which again I think -- we think of as complementary.

Doug Leggate -- Bank of America Merrill Lynch -- Analyst

Appreciate the full answer. Thanks, Cedric.

Cedric W. Burgher -- Senior Vice President & Chief Financial Officer

Yes.

Operator

And the next question comes from Phil Gresh of JP Morgan.

Phil Gresh -- JP Morgan -- Analyst

Yes. Hi, good afternoon. Thanks for squeezing me in here. Just starting I guess with Midstream. Could you help -- maybe bridge the 4Q actual results to the 1Q guidance? I know maybe there were some items on both sides here. But it just seemed a little bit bigger than the normal sensitivity would suggest in the differentials. And then if you have an outlook on the full year for the Midstream business, whether it's on differentials or the pre-tax income if you could share that?

Vicki Hollub -- President & Chief Executive Officer

Yes, part of what's happening in Q1 is the Dolphin turnaround. So that's part of the difference between Q4 and the Midstream, and the differential impact and often. And we have some other just general marketing things that will have an impact in Q1, that we can detail out after Q1.

Phil Gresh -- JP Morgan -- Analyst

Okay.

Vicki Hollub -- President & Chief Executive Officer

And of course, with respect to the full year, it's kind of hard to forecast the full year at this point, because the differentials and what the volatility there may be? So we will see how things go over the next few months or so?

Jeff Alvarez -- Vice President, Investor Relations

Hey, Phil, this is Jeff. And just to add to what Vicki said, I mean, one thing that we pointed -- update people on is to remember when the differential collapses you see that in Midstream from a negative standpoint, but the upstream now given our oil production in the Permian, we will realize more than 50% of what you lose on the Midstream side. So a good way to think about that, we gave that sensitivity. So as that differential collapses just for everyone to remember that more than half of the benefit will be recognized in oil and gas.

Phil Gresh -- JP Morgan -- Analyst

Sure. And is there a caustic price assumption that would be behind that chemicals guidance. I know that maybe early part of the year. So we'll see a little tougher than the back half, just trying to calibrate that.

Burnis J. Hebert -- President, Occidental Chemical Corporation

Yes. Phil, this is B.J. For caustic and obviously we saw price erosion toward the end of 2018. Our assumption in 2019 is we're going to see some price pickup, but not to the level of erosion that we saw toward the end of the year. So we're taking a conservative approach looking forward. But we feel really good about supply and demand fundamentals long term in the caustic market. So I think it's conservative, but we still feel really good about the forward years.

Phil Gresh -- JP Morgan -- Analyst

Okay. And then?

Cedric W. Burgher -- Senior Vice President & Chief Financial Officer

Just to add one thing on. As you certainly made a few adjustments to the 2022 cash flow outlook, because wanted to keep it current and that was one of the items that we were more conservative on caustic prices as well as sulfur, which affects the midstream business. The combined effect of that is a deduct of about $150 million versus what we showed in 2022, versus what we showed you in the third quarter.

We also had a deduct of $250 million related to the lower production associated with lower capital spend in 2019, and the less of a ramp in 2020. So that caused some confusion. Also last night, we didn't intend for that. We thought we laid it out. But just to clarify, so that's $400 million combined, which more than offset the $150 million pickup you have from the $5 increase in the Brent price differential versus last quarter. So just trying to bring it kind of current with current thinking. So it's not stable, but that's where we kind of move from the midpoint of $9.25 billion last quarter to the $9.0 billion this quarter.

Phil Gresh -- JP Morgan -- Analyst

That's really helpful. Thanks, Cedric. Last question for Vicki, you just made a comment in your prepared remarks about a 20% base decline rate and it was higher than in the past. I just want to understand that comment a little bit more. What would you have said it was in the past, and I guess just because Permian is only a third of the production at this point. So just on a little bit high to me, but just any additional detail behind that would be helpful? Thank you.

Vicki Hollub -- President & Chief Executive Officer

Yes. In the past we were traditionally running at little bit less than 10%. And so the increase in the Permian has gotten us to -- will have us by the end of this year to around 20%. But it's important to think about the strength of our chemicals business in this sort of environment is that when you think about our overall cash flow decline, that's really only about 15%. So the 20% decline in the oil and gas business is not alarming, although the international assets as we develop those that will somewhat mitigate that decline.

Phil Gresh -- JP Morgan -- Analyst

Okay. Thank you.

Operator

And the next question comes from Phillip Jungwirth of BMO Capital Markets.

Phillip Jungwirth -- BMO Capital Markets -- Analyst

Thanks. Good morning.

Vicki Hollub -- President & Chief Executive Officer

Good morning.

Phillip Jungwirth -- BMO Capital Markets -- Analyst

Just hoping if you could give a little more color around the 6% international production CAGR, key drivers and then really just that the progression of that growth over the next couple of years, because when we look at the 2019 guidance, it looks like you're budgeting around $800 million of CapEx, flat year-on-year production. So how does really either capital efficiency improve or is it more about increasing the level of investment?

Kenneth Dillon -- Senior Vice President & President, International Oil and Gas Operations

Hey, it's Ken here. As I mentioned earlier, in terms of capital efficiency, our drilling performance has improved beyond measure over the last few years. So we are able to drill many more wells nor than we could say just three or four years ago. In terms of the road map on Slide 7, we basically have a large portfolio, and have opportunities going forward. We have milestones associated with Colombia, the TECA development and new blocks. If you look at the stage through year-by-year, each of these plans will be optimized over time, so that we can maximize the returns of every one of these streams.

So we feel comfortable in reaching the 6% with the portfolio that we show here. We haven't talked about our Al Hosn debottlenecking. We see opportunities there and we see great well performance and also new geological and petrophysical model showed that we have additional gas there to enable that to be further debottlenecked.

Phillip Jungwirth -- BMO Capital Markets -- Analyst

Okay. And then on Slide 6 where you lay out the facilities investment at 24% of the 2019 program. I was wondering if you could just isolate that to Permian Resources as a percent of the -- the $2.6 billion capital budget and then also how that would trend over time and maybe provide some color around operating cost benefits of that facilities investment?

Jeff Alvarez -- Vice President, Investor Relations

Sure, Phil. This is Jeff. So for 2019, it's around 21%. Facilities and I'll carry that when we do our OBO we exclude that. But they also have a facilities component to it. So you're looking at it from a peer standpoint, you probably lumped that in. But of the $2.6 billion, it's about 21% as facilities.

And you brought up one of the most important things not just from a productivity standpoint. But that really helps drive full cycle costs, which shows up in operating costs. So when you look at our operating costs, it was able to get down into the mid to low 6s is really where you see the benefits of that. You also see it from a productivity standpoint. It's hard to measure, but just from an uptime standpoint and the ability to handle the production reliability, it shows up there as well.

So from a long-term standpoint, when we look at most of our field development plans, we expect to get on average below 10%. So if you go and look at our more mature areas like in the Midland Basin, where we have infrastructure developed, I mean you look at the new developments there were below 10%. So we expect to get there in the not too distant future from a total facility spend.

Phillip Jungwirth -- BMO Capital Markets -- Analyst

Great. Thanks a lot.

Operator

The next question comes from Paul Cheng of Barclays.

Paul Cheng -- Barclays -- Analyst

Hey, guys. Just couple of quick question. On -- Vicki, when you were talking about your 24% on average per year growth in the Permian Resource, can you give us the number that for 2020 to 2022, what is your rig count per well productivity improvement that you assume comparing to 2018 or 2019, and also what is the CapEx assumption as well as the base decline curve?

Jeff Alvarez -- Vice President, Investor Relations

Sure. So, Paul, what we said last year, so 24% CAGR, four-year CAGR. This year it will be 30% to 35%. So obviously, that number is coming down as the base grows. And so the way I think about it, when we originally rolled that out, we said capital would be roughly flat with where we were last year, which was around $2.8 billion.

And so, what's going on when you do that it goes back to question Phil asked is, you actually -- we're running say 12 or 13 rigs at that pace. But as you spend less on facilities, you're able to dedicate more of that capital and to drilling wells. So just easy math, these aren't exact numbers because we'll factor in with working interest and other things, but facilities goes from 20% to less than 10%, that could add a couple operated rigs to that are generating production growth, instead of being spent on facilities.

Paul Cheng -- Barclays -- Analyst

So you're basically looking about 14, 15 rigs. And in the base assumption what kind of productivity improvement on the well production?

Jeff Alvarez -- Vice President, Investor Relations

Yes. That's a great question. So, hopefully, you've heard, with our long-term forecast, we always want to make sure we can deliver our long-term forecast. So when it comes to productivity improvements, we've assumed almost zero. I think we've had like 1% in some areas for productivity improvements.

When I just reference the slide that shows 25% improvements in the last year, 20% improvement in the year before that and so on. So we've been really conservative with productivity improvements and how we've built that into the plan. So it's almost zero. But we had some areas that were new from an appraisal standpoint, so they have some uptick in them. But it's small on a global scale.

Paul Cheng -- Barclays -- Analyst

And just a clarification, Jeff, you earlier had mentioned in your prepared remarks saying that in five years time the business will be over 600,000 barrel per day. Are you talking about just the Permian Resource or Permian Resources plus EOR?

Jeff Alvarez -- Vice President, Investor Relations

Yes, that's just Permian Resources.

Paul Cheng -- Barclays -- Analyst

Just Permian Resources, OK.

Jeff Alvarez -- Vice President, Investor Relations

Correct. So that excludes EOR obviously.

Paul Cheng -- Barclays -- Analyst

A final question that, I think, Vicki was talking about, you guys have done a number of pilot on the CO2 as well as using the other hydrocarbon. Have you so far seen any distinct pattern, certain type of activities like of the reservoir will be better respond to a certain -- to a CO2 flooding and the other one, and is there anything that you can share? And how wide spread is that application could be?

Jeff Alvarez -- Vice President, Investor Relations

Yes. I mean, nothing meaningfully that we can share, but you're right. I mean, different reservoir characteristics will be more conducive to hydrocarbon gas versus CO2. And I'd say, you can look at, in a conventional world, many of the same principles will apply with miscibility, depth, pressures, temperature, all of those things.

And so, as Vicki said, we're really comfortable now from a technical standpoint that we know with the EOR, hydrocarbon gas and CO2 through the different reservoirs, we can get more oil. And actually is better technically than what we thought.

The real challenge is, from a commerciality standpoint what do patterns look like, how do you design them and how do you handle the gas processing, all of those things, that's where the real challenge lies, I mean that's why we're focused on proving up that commerciality. But you will see differentiation based on reservoir characteristics, not that different than what you see in the conventional reservoirs.

Paul Cheng -- Barclays -- Analyst

And when you guys will be in a position that to maybe share more of the data?

Jeff Alvarez -- Vice President, Investor Relations

I would expect late this year. We'll share more of that.

Paul Cheng -- Barclays -- Analyst

Thank you.

Jeff Alvarez -- Vice President, Investor Relations

Thanks, Paul.

Operator

And the next question comes from John Herrlin of Societe Generale.

John Herrlin -- Societe Generale -- Analyst

Yes, hi, thank you. With respect to your CapEx budget, what kind of labor or oilfield services inflection cost are you baking in for this year?

Vicki Hollub -- President & Chief Executive Officer

We're baking at about 4%. 4% domestically, but internationally, we're not seeing the kind of inflation that we're seeing domestically.

Kenneth Dillon -- Senior Vice President & President, International Oil and Gas Operations

Internationally, we're seeing the last 16 contracts we've bid, we've seen 4.1% deflation. And if we focus only on the major suppliers what we're seeing is a 16% reduction internationally.

John Herrlin -- Societe Generale -- Analyst

Good. Then my next question is regarding international policy, you had some good growth in Colombia and also me in it, was that all drilling-program related?

Kenneth Dillon -- Senior Vice President & President, International Oil and Gas Operations

I think a combination of drilling also some of the reservoir characterization work we're seeing, and overall, it's just really good performance. I don't see anything one individual thing, it's just a collective of individual activities across the whole international.

John Herrlin -- Societe Generale -- Analyst

Okay. And the last one for me is on Permian Resources. Earlier it was mentioned that you haven't had sort of the parent-child relationships with some group here. So, have you changed your spacing design plans in your core areas? Or is it very petrophysically specific.

Jeff Alvarez -- Vice President, Investor Relations

Yes. I think it's very petrophysically specific. So, if you look at our core areas, they may vary from three well spacing to six or seven as where they are. And one of the numbers we give in or less than 50 inventory we average about $4.7 billion. So, I'd say significantly lower than many others. But again we're getting really, really good performance. So, that comes out there.

But that's one of the variables that we continually update and modify, and I think we mentioned an example in Texas Delaware where now we're doing more of a Chevron design in developing kind of two benches almost together and the implications of that are really good well performance and you are able to remove a well and get better performance when you combine those two together.

So, it's one of the variables we turn all the time, but I would say when you mentioned the parent-child, we're not unique. That relationship exists. I would say we've just figured out how to manage it optimally from a net present value standpoint and not just try to drive up inventory.

John Herrlin -- Societe Generale -- Analyst

Great. Thank you.

Vicki Hollub -- President & Chief Executive Officer

Thank you.

Operator

And next we have a question from Leo Mariani of KeyBanc.

Leo Mariani -- Key Banc -- Analyst

Hey, guys. I just wanted to touch quickly on the EOR business. Obviously, you guys have put some longer term growth rates between 2018 to 2022 for Permian Resources and international. Just want to get a sense of how is that EOR business play out that outlook? Is it more flattish with cost reductions? Or how do you think about that production stream?

Hey guys, just wanted to touch quickly on the EOR business. Obviously you guys have put some longer term growth rates 2018 to 2022 for Permian Resources and international. Just want to get a sense of how does that EOR business play out in that outlook? Is it more flattish with sort of cost reductions or how do we think about that production stream?

Jeff Alvarez -- Vice President, Investor Relations

It has very minimal growth. It's on the order of 1% CAGR over that time period. So we continue -- as we show we have tons of inventory for further EOR projects, so we continue to prosecute that. But we need more inject and other things. So its CAGR is around 1%.

Cedric W. Burgher -- Senior Vice President & Chief Financial Officer

One thing I'd add to that is if you had noticed when created the Low Carbon Ventures group last year, we've got some milestones listed in that area too. It's not reflected in the 2022 outlook, but it is certainly an area that we like to make great progress and develop. And as Jeff mentioned we have a lot of running room to grow in terms of EOR projects we could take if you could just get more CO2. It's kind of irony in today's world where most people want to eliminate CO2 emissions and we just can't get enough CO2 commercially to our locations. And it's an area we're focused on.

Vicki Hollub -- President & Chief Executive Officer

Yes, the bottom line is -- that's another potential upside for our 2022 plan.

Leo Mariani -- Key Banc -- Analyst

Okay. Maybe just shifting gears over to the new block, you guys picked up in UAE there. You certainly talked about a plethora of prospects over there. Presumably is most of the activity going to be focused on oil over the next couple of years, obviously, you're neighboring Al Hosn block there is more gassy, can you just give us any color on what you're targeting?

Kenneth Dillon -- Senior Vice President & President, International Oil and Gas Operations

Yes. It's mainly oil we're targeting as I mentioned earlier between the super giant fields in Abu Dhabi and the prolific fields in Oman, we're focused mainly on oil.

Leo Mariani -- Key Banc -- Analyst

All right. Thanks, guys.

Operator

In the interest of time, this concludes our question-and-answer session. I would like to turn the conference back over to Vicki Hollub for any closing remarks.

Vicki Hollub -- President & Chief Executive Officer

I want to thank you all for your questions and have a good day. Thanks. Bye.

Operator

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Duration: 79 minutes

Call participants:

Jeff Alvarez -- Vice President, Investor Relations

Vicki Hollub -- President & Chief Executive Officer

Cedric W. Burgher -- Senior Vice President & Chief Financial Officer

Kenneth Dillon -- Senior Vice President & President, International Oil and Gas Operations

Roger Read -- Wells Fargo -- Analyst

Robert Morris -- Citigroup -- Analyst

Paul Sankey -- Mizuho Securities -- Analyst

Ryan Todd -- Simmons Energy -- Analyst

Brian Singer -- Goldman Sachs -- Analyst

Brian Singer -- Goldman Sachs -- Analyst

Doug Leggate -- Bank of America Merrill Lynch -- Analyst

Phil Gresh -- JP Morgan -- Analyst

Burnis J. Hebert -- President, Occidental Chemical Corporation

Phillip Jungwirth -- BMO Capital Markets -- Analyst

Paul Cheng -- Barclays -- Analyst

John Herrlin -- Societe Generale -- Analyst

Leo Mariani -- Key Banc -- Analyst

More OXY analysis

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