Chevron Tags $22.8B Capital Budget, 75% for Upstream O&G Projects

Chevron has announced a $22.8 billion capital and exploratory spending program for 2009, unchanged from the level of expenditures in 2008. Included in the 2009 program are $1.8 billion of expenditures by affiliates, which do not require cash outlays by Chevron's consolidated companies.

"Our company's financial strength enables the funding of attractive investments consistent with our long-term strategies," said Chairman and CEO Dave O'Reilly.

O'Reilly said about 75 percent of the 2009 spending program is for upstream oil and gas exploration and production projects worldwide.

"Much of our 2009 spending continues to be on large, multiyear projects aimed at increasing energy supplies to meet global demand and also improving operating efficiency and reliability," O'Reilly added. "About 10 percent of the budget is for large, one-time payments related to upstream production concessions outside the United States."

Upstream -- Exploration and Production

Spending of $17.5 billion is planned for exploration, production and natural gas-related projects. A significant portion relates to development projects that build on the company's successful and focused exploration results in recent years, including opportunities in the deepwater U.S. Gulf of Mexico, western Africa and the Gulf of Thailand. Funding also is earmarked for further appraisal and evaluation of other prospective areas in the world's major hydrocarbon basins, including Northwest Australia.

"Our upstream investments are aimed at finding and developing oil and gas resources to increase production and help supply the energy needs of markets around the world," said George Kirkland, Chevron's executive vice president of Upstream and Gas. "Start-ups of major projects in 2009 are expected to include Tahiti in the Gulf of Mexico, Tombua-Landana offshore Angola and Frade offshore Brazil. We also anticipate significant production increases from recent start-ups at Agbami offshore Nigeria and Blind Faith in the Gulf of Mexico and from expansion activity at Tengiz in Kazakhstan."

Major upstream spending in 2009 includes activities in the following areas:

  • U.S. Gulf of Mexico -- deepwater exploration and development, including Perdido and Jack- St. Malo.
  • Brazil -- development of the Frade Field.
  • Nigeria -- development of the Agbami and Usan deepwater fields.
  • Angola -- development of Block 14 assets, including Tombua-Landana, and construction of LNG facilities.
  • Western Australia -- development of Gorgon, Wheatstone and North West Shelf offshore natural gas resources, including LNG facilities.
  • Thailand -- development of the Platong Gas II project offshore Thailand.
  • Indonesia -- northern expansion of the Duri Field steamflood project.
  • China -- one-time payment and initial development of the Chuandongbei gas field.
  • Middle East -- one-time payment for concession extension and development in the Partitioned Neutral Zone of Saudi Arabia and Kuwait.

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