Chevron Announces $36.7 Billion Capital and Exploratory Budget for 2013

SAN RAMON, Calif.--()--Chevron Corporation (NYSE: CVX) today announced a $36.7 billion capital and exploratory investment program for 2013. Included in the 2013 program are $3.3 billion of planned expenditures by affiliates, which do not require cash outlays by Chevron.

“Consistent with long-stated strategies, we’re investing in a portfolio of very attractive oil and gas projects that will deliver volume growth and real value to our stockholders,” said Chairman and CEO John Watson. “Next year’s program supports several projects currently under construction, including our Australian LNG projects and United States deepwater developments. As these and other projects come online, we anticipate production will reach our 2017 goal of 3.3 million barrels per day. With our strong balance sheet and industry-leading producing margins, I further expect to continue our pattern of significant stockholder distributions.”

Approximately 90 percent of the 2013 spending program is budgeted for upstream crude oil and natural gas exploration and production projects. Another 7 percent is associated with the company’s downstream businesses that manufacture, transport and sell gasoline, diesel fuel and other refined products, fuel and lubricant additives, and petrochemicals.

HIGHLIGHTS OF THE 2013 CAPITAL AND EXPLORATORY SPENDING PROGRAM

Chevron 2013 Planned Capital and Exploratory Expenditures

 

Billions

U.S. Upstream

$

7.5

International Upstream   25.5  
Total Upstream 33.0
U.S. Downstream 1.4
International Downstream   1.3  
Total Downstream 2.7
Other   1.0  

TOTAL (Including Chevron’s Share of Expenditures by Affiliated Companies)

$

36.7

Expenditures by Affiliated Companies (3.3 )

Cash Expenditures by Chevron Consolidated Companies

 

$

33.4

 

Upstream

Investment of $33 billion is planned for exploration and production activities, including major natural gas-related projects. Notable major capital investments include developments in Australia, Nigeria, the U.S. deepwater Gulf of Mexico, Kazakhstan, Angola and the Republic of Congo. Planned capital spending also is directed toward improving crude oil and natural gas recovery and reducing natural field declines for existing producing assets throughout the world.

In Australia, the Gorgon three-train LNG foundation project on Barrow Island has been under construction for three years and is approximately 55 percent complete.

A cost and schedule review has been completed, and the total cost estimate for the foundation project has increased from AU$43 billion (US$37 billion) to AU$52 billion (US$52 billion). Plant startup is planned for late 2014, leading to the first LNG cargo in the first quarter 2015. The factors contributing to the increased costs and schedule impacts include labor costs and productivity associated with Barrow Island site infrastructure, logistics challenges and weather delays. In addition, currency impacts due to the strengthened Australian dollar and changes in the mix of currencies since project sanction account for approximately one-third of the projected increase in U.S. dollar outlays.

“Gorgon project economics are attractive," said Vice Chairman George Kirkland. "While investment requirements have grown, oil prices, which directly impact the overall revenue stream, have increased by approximately 80 percent over the same time period. In addition, the LNG nameplate capacity has increased by 4 percent to 15.6 million tons per year.”

Kirkland added, "Our exploration program continues to discover additional gas resources that could support future expansions of our Australian LNG developments. The Wheatstone LNG project is currently 7 percent complete and is on budget and on schedule."

In the Gulf of Mexico, projects under development include Jack/St. Malo, Big Foot and Tubular Bells. The Jack/St. Malo and Big Foot projects are approximately 55 and 65 percent complete, respectively, and are on budget. First production for both of these projects is expected in 2014.

Upstream spending in 2013 for major capital projects in other regions includes:

  • Nigeria – further development of the Usan and Agbami deepwater fields and construction and plant commissioning of the Escravos gas-to-liquids facility
  • Angola/Republic of Congo – startup and ramp up of Angola LNG and development of Mafumeira Sul (Angola) and Moho Nord (Republic of Congo)
  • Kazakhstan/Russia – advancement of the Tengiz Future Growth Project (Kazakhstan) and the Caspian Pipeline expansion (Kazakhstan, Russia)
  • Brazil – advancement of the Papa-Terra deepwater project
  • Canada – Hebron offshore development
  • United Kingdom – advancement of the Clair Ridge project and the Rosebank deepwater field
  • China – development of the Chuandongbei natural gas project

Global exploration funding is expected to be $3.4 billion in 2013. This planned spending includes initial appraisal of new acreage acquired over the past two years, including Suriname, the Kurdistan region of Iraq and Sierra Leone. The program also supports continued exploration and appraisal activity in Western Australia, the Gulf of Mexico, West Africa, and in several shale gas regions around the world.

About 30 percent of the upstream capital program is targeted to support maintenance activities and mitigation of field declines, as well as highly profitable projects related to currently producing assets. Highlights of the 2013 base program include an increase in activity across several producing regions of North America as well as an increase in expenditures in Thailand and Indonesia.

Downstream

Capital spending of $2.7 billion in 2013 is budgeted for downstream operations. Expenditures in refining are geared toward enhancing reliability and energy efficiency, feedstock flexibility and production of cleaner transportation fuels. Planned capital spending also is directed toward producing premium base oil in Pascagoula, Mississippi, and to expanding Oronite additives production in Singapore.

Additional investments are expected to be funded by Chevron affiliates, including refining projects managed by the company’s 50 percent-owned GS Caltex affiliate and additional chemicals projects associated with the company’s 50 percent-owned Chevron Phillips Chemical Company LLC.

All Other

Expenditures of approximately $1 billion in 2013 are budgeted for technology, power generation and other corporate activities.

Chevron is one of the world's leading integrated energy companies, with subsidiaries that conduct business worldwide. The company is involved in virtually every facet of the energy industry. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and lubricants; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including biofuels. Chevron is based in San Ramon, California. More information about Chevron is available at www.chevron.com.

Cautionary Statement Relevant to Forward-Looking Information for the Purpose of “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995.

This press release contains forward-looking statements relating to Chevron’s operations that are based on management’s current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries. Words such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “forecasts,” “projects,” “believes,” “seeks,” “schedules,” “estimates,” “budgets,” “outlook” and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond the company’s control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: changing crude oil and natural gas prices; changing refining, marketing and chemical margins; actions of competitors or regulators; timing of exploration expenses; timing of crude oil liftings; the competitiveness of alternate-energy sources or product substitutes; technological developments; the results of operations and financial condition of equity affiliates; the inability or failure of the company’s joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude oil and natural gas development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of the company’s net production or manufacturing facilities or delivery/transportation networks due to war, accidents, political events, civil unrest, severe weather or crude oil production quotas that might be imposed by the Organization of Petroleum Exporting Countries; the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant investment or product changes under existing or future environmental statutes, regulations and litigation; the potential liability resulting from other pending or future litigation; the company’s future acquisition or disposition of assets and gains and losses from asset dispositions or impairments; government-mandated sales, divestitures, recapitalizations, industry-specific taxes, changes in fiscal terms or restrictions on scope of company operations; foreign currency movements compared with the U.S. dollar; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; and the factors set forth under the heading “Risk Factors” on pages 29 through 31 of the company’s 2011 Annual Report on Form 10-K. In addition, such results could be affected by general domestic and international economic and political conditions. Other unpredictable or unknown factors not discussed in this press release could also have material adverse effects on forward-looking statements.

Contacts

Chevron Corporation
Lloyd Avram, +1-925-790-6930

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Contacts

Chevron Corporation
Lloyd Avram, +1-925-790-6930