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Mumbai: US-based oil and gas major Chevron Corporation (NYSE: CVX) has announced a $19.6-billion capital and exploratory spending programme for 2007, with a predominant focus on global oil and gas exploration and production projects. Its 2007 budgetary allocation is a 20-per cent increase from outlays of approximately $16 billion in 2006. "Our 2007 capital and exploratory program is a record level of investment by our company," said chairman and CEO Dave O'Reilly. "About 75 per cent of next year's budget is for oil and gas exploration and production projects worldwide," he added. O'Reilly also said, "Another 20 per cent is dedicated to the company's global refining, marketing and transportation businesses which manufacture and sell gasoline, clean diesel fuel, biofuels and other refined products in the company's marketing areas." He said that the 2007 budget included the $6.7 billion of total investment in the US. The majority of the planned increase is related to the company's exploration and production operations. The higher investment reflects the impact of several large, multiyear development projects being in their most capital-intensive phases and the effect of higher costs for materials and services currently experienced by the oil and gas industry worldwide. "Our long-range focus on capital discipline in executing our excellent project queue is critical in this environment," O'Reilly said.
| Highlights of the 2007 capital and exploratory spending programme: | | Planned capital exploratory expenditures | in $ billion | | US Upstream | 4.0 | | International upstream | 10.6 | | US downstream | 1.6 | | International downstream | 2.2 | | Chemicals and other | 1.2 | TOTAL (including Chevron's share of)
expenditures by affiliated companies
| 19.6 | | Expenditures by affiliated companies | (2.4) | | Cash expenditures by Chevron consolidated companies | 17.2 | Upstream Exploration and Production
Capital and exploratory spending of $14.6 billion is budgeted for exploration, production and natural gas-related projects. A significant component of this spending relates to upstream development projects that are building on the company's successful and focused exploration results in recent years, including opportunities in the deepwater US Gulf of Mexico and Western Africa. Funding has also been earmarked for further appraisal and evaluation of other prospective areas in the world's major hydrocarbon basins. "Our upstream investments are aimed at finding and developing oil and gas resources to increase production and help supply the energy needs of world markets," said George Kirkland, Chevron's executive vice president, upstream and gas. "Our focus is both on improving the performance of existing fields and funding new projects that will provide this future production growth," he added. Major upstream spending in 2007 includes projects in: -
US Gulf of Mexico deepwater exploration and development, including Tahiti, Great White Perdido, Blind Faith and Jack -
Angola deepwater developments including Tombua Landana, and construction of liquefied natural gas (LNG) facilities -
Republic of the Congo development of the Moho-Bilondo field -
Nigeria continued development of the deepwater Agbami Field, and additional deepwater exploration -
Kazakhstan expansion of the Tengiz Field -
Australia further development of the Greater Gorgon Area natural gas resource offshore Western Australia -
Canada expansion of the Athabasca Oil Sands Project -
Brazil development of the Frade Field Downstream refining, marketing and transportation
Capital spending of $3.8 billion in 2007 is budgeted for downstream operations, of which $1.6 billion is for projects in the United States. These expenditures are aimed at allowing the company to produce cleaner and more sophisticated fuels, to increase production of transportation fuels globally, and to enhance the company's ability to manufacture fuels and other products from heavy and/or sour crude oils. Outlays in 2007 include projects to upgrade the company's refineries in Mississippi and California. The company's 50-per cent owned GS Caltex affiliate is also in the process of a major upgrade to its Yeosu refining complex in South Korea. And in support of upstream projects to help commercialize the company's large natural gas resource base outside the United States, expenditures will be made in 2007 on the construction of LNG tankers and gas-to-liquids facilities. Chemicals and Other
Expenditures of approximately $1.2 billion in 2007 are estimated for investments in chemicals, technology, and other corporate activities. Technology investments include projects related to molecular transformation, unconventional hydrocarbon technologies, reservoir management, and development of second-generation biofuel production technologies. Common stock repurchase programme
The company also indicated board approval to acquire up to $5 billion of the company's common stock over a period of up to three years. This program follows two other $5- billion stock buyback programmes that were initiated in April 2004 and December 2005, with the most recent program having been completed in 12 months.
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