Chevron Corporation told financial analysts at a meeting in New York City that major upstream capital projects in the U.S. Gulf of Mexico, offshore Nigeria and in Kazakhstan will produce additional crude oil and natural gas this year.
"We are focused on execution as a top priority for 2008 and 2009," Dave O'Reilly, Chevron's chairman and CEO, said at the company's annual analyst meeting. "This entails excelling at operational performance, executing our capital projects well and effectively managing costs."
George Kirkland, executive vice president for Global Upstream and Gas, said a track record of exploration success and project execution is expected to grow Chevron's production capacity and boost proved reserves of crude oil and natural gas.
The company has approximately 40 major capital projects with a net Chevron investment of $1 billion or more each. Of those, important projects – including Blind Faith in the Gulf of Mexico, the Sour Gas Injection/Second Generation Plant in Kazakhstan and Agbami in Nigeria – are planned to increase production capacity in 2008. In 2009, Tombua Landana in Angola, Frade in Brazil and Tahiti in the Gulf of Mexico are expected to come online and further grow production capacity.
Kirkland also explained that the company's exploration teams had another strong year in 2007. Each year from 2002 through 2007, Chevron's exploration program has added an average of 1 billion barrels to its resource base. The 2007 success rate for exploration wells was 41 percent, comparable with Chevron's average of 42 percent over the past six years. In addition, a recently released Wood MacKenzie report cited Chevron as the leader among its peers in exploration results from 2002 to 2006.
"Not only is our exploration success feeding our strong queue of major capital projects, it is also building the foundation for long-term reserves replacement as the discovered resources move to proved reserves," he said.
In regard to proved reserves, Kirkland said projects in Kazakhstan, Nigeria, Australia, Brazil, China, the United States and Angola will deliver strong reserves replacement for Chevron over the next three years.
"Our three-year business plan indicates we will have reserves of approximately 11.3 billion barrels of oil-equivalent at the end of 2010 -- more proved reserves at the end of the decade than we have today," Kirkland explained.
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