Chevon announces 2013 budget PDF Print E-mail
EDITOR   
Thursday, 06 December 2012 06:53

Chevron Corporation 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," chairman and CEO John Watson said.

“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 per cent of the 2013 spending program is budgeted for upstream crude oil and natural gas exploration and production projects. Another 7 per cent 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 $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 US 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 per cent complete.

A cost and schedule review has been completed, and the total cost estimate for the foundation project has increased from $43 billion (US$37 billion) to $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 US dollar outlays.

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

“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 per cent complete and is on budget and on schedule."

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 per cent-owned Chevron Phillips Chemical Company LLC.

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



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