Chevron Announces $36.7 Billion Capital and Exploratory Budget for 2013

  Chevron Announces $36.7 Billion Capital and Exploratory Budget for 2013

Business Wire

SAN RAMON, Calif. -- December 05, 2012

Chevron Corporation (NYSE: CVX) 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,” 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.

HIGHLIGHTS OF THE 2013 CAPITAL AND EXPLORATORY SPENDING PROGRAM

Chevron 2013 Planned Capital and Exploratory Expenditures            Billions
U.S. Upstream                                                         $ 7.5
International Upstream                                                 25.5 
Total Upstream                                                          33.0
U.S. Downstream                                                         1.4
International Downstream                                               1.3  
Total Downstream                                                        2.7
Other                                                                  1.0  
TOTAL (Including Chevron’s Share of Expenditures by Affiliated        $ 36.7
Companies)
Expenditures by Affiliated Companies                                    (3.3 )
Cash Expenditures by Chevron Consolidated Companies                  $ 33.4 

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 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 AU$43 billion (US$37 billion) to
AU$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 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 increasedby 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 $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 $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 $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.

Cautionary Statement Relevant to Forward-Looking Information for the Purpose
of “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of
1995.

This press release contains forward-looking statements relating to Chevron’s
operations that are based on management’s current expectations, estimates and
projections about the petroleum, chemicals and other energy-related
industries. Words such as “anticipates,” “expects,” “intends,” “plans,”
“targets,” “forecasts,” “projects,” “believes,” “seeks,” “schedules,”
“estimates,” “budgets,” “outlook” and similar expressions are intended to
identify such forward-looking statements. These statements are not guarantees
of future performance and are subject to certain risks, uncertainties and
other factors, some of which are beyond the company’s control and are
difficult to predict. Therefore, actual outcomes and results may differ
materially from what is expressed or forecasted in such forward-looking
statements. The reader should not place undue reliance on these
forward-looking statements, which speak only as of the date of this press
release. Unless legally required, Chevron undertakes no obligation to update
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.

Among the important factors that could cause actual results to differ
materially from those in the forward-looking statements are: changing crude
oil and natural gas prices; changing refining, marketing and chemical margins;
actions of competitors or regulators; timing of exploration expenses; timing
of crude oil liftings; the competitiveness of alternate-energy sources or
product substitutes; technological developments; the results of operations and
financial condition of equity affiliates; the inability or failure of the
company’s joint-venture partners to fund their share of operations and
development activities; the potential failure to achieve expected net
production from existing and future crude oil and natural gas development
projects; potential delays in the development, construction or start-up of
planned projects; the potential disruption or interruption of the company’s
net production or manufacturing facilities or delivery/transportation networks
due to war, accidents, political events, civil unrest, severe weather or crude
oil production quotas that might be imposed by the Organization of Petroleum
Exporting Countries; the potential liability for remedial actions or
assessments under existing or future environmental regulations and litigation;
significant investment or product changes under existing or future
environmental statutes, regulations and litigation; the potential liability
resulting from other pending or future litigation; the company’s future
acquisition or disposition of assets and gains and losses from asset
dispositions or impairments; government-mandated sales, divestitures,
recapitalizations, industry-specific taxes, changes in fiscal terms or
restrictions on scope of company operations; foreign currency movements
compared with the U.S. dollar; the effects of changed accounting rules under
generally accepted accounting principles promulgated by rule-setting bodies;
and the factors set forth under the heading “Risk Factors” on pages 29 through
31 of the company’s 2011 Annual Report on Form 10-K. In addition, such results
could be affected by general domestic and international economic and political
conditions. Other unpredictable or unknown factors not discussed in this press
release could also have material adverse effects on forward-looking
statements.

Contact:

Chevron Corporation
Lloyd Avram, +1-925-790-6930
 
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