OREANDA-NEWS. December 12, 2012. Chevron Corporation (NYSE: CVX) announced a USD 36.7 billion capital and exploratory investment program for 2013. Included in the 2013 program are USD 3.3 billion of planned expenditures by affiliates, which do not require cash outlays by Chevron, reported the press-centre of 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.

Upstream
Investment of USD 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 AUD 43 billion (USD 37 billion) to AUD 52 billion (USD 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 USD 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 USD 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 USD 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.