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Chevron Announces $36.7 Billion Capital And Exploratory Budget For 2013

Stocks in this article: CVX

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 increased by 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.

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