press release
Chevron Announces $32.7 Billion Capital and Exploratory Budget for 2012

  • Upstream spending projected at $28.5 billion, as liquefied natural gas (LNG) and deepwater investments propel a step change in future production
  • U.S. investments total nearly $9 billion, with substantial outlays in the Gulf Coast region, California, mid-continental states and Pennsylvania 

SAN RAMON, Calif., December 7, 2011 – Chevron Corporation (NYSE: CVX) today announced a $32.7 billion capital and exploratory spending program for 2012. Included in the 2012 program are $3 billion of planned expenditures by affiliates, which do not require cash outlays by Chevron.

Total investments for 2011 are estimated at $33 billion, reflecting approximately $28 billion in capital and exploratory expenditures and $4.5 billion for the acquisition of Atlas Energy, Inc., which closed earlier in the year.

"We continue to develop an unparalleled project queue," said Chairman and CEO John Watson. "Our 2012 capital program covers a number of multi-year projects currently in the construction phase, including two world-class Australian LNG projects and multiple deepwater developments. We believe these investments will yield significant production growth and reward our shareholders for years to come. By 2017, we expect our net crude oil and natural gas production to grow about 20 percent to 3.3 million barrels per day. This growth profile, along with our current financial strength, supports our priority of continuously growing our dividends."

Watson continued, "Our 2012 capital program includes spending of nearly $9 billion in the United States, with major new investments in the deepwater Gulf of Mexico, the Marcellus Shale in Pennsylvania and our refinery at Pascagoula, Mississippi. These projects are expected to result in new jobs and new sources of revenues for the communities where we operate. Our investments, both in the United States and elsewhere around the globe, help provide affordable new energy supplies to support a growing economy."


Chevron 2012 Planned Capital & Exploratory Expenditures $ Billions
U.S. Upstream $ 6.2
International Upstream 22.3
Total Upstream 28.5
U.S. Downstream 2.1
International Downstream 1.5
Total Downstream 3.6
Other 0.6
TOTAL (Including Chevron's Share of Expenditures by Affiliated Companies) $32.7
Expenditures by Affiliated Companies (3.0)
Cash Expenditures by Chevron Consolidated Companies $29.7

Approximately 87 percent of the 2012 spending program is budgeted for upstream crude oil and natural gas exploration and production projects. Another 11 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.


Spending of $28.5 billion is planned for exploration and production activities, including major natural gas-related projects.  Major capital investments include developments in Australia, the deepwater Gulf of Mexico, Nigeria, Angola and China.  Planned capital spending is also directed toward improving crude oil and natural gas recovery and reducing natural field declines of existing producing assets throughout the world.

"We are building new legacy positions with major investments in LNG projects and the deepwater Gulf of Mexico. Our global LNG investments are estimated to reach peak spending in 2012 and 2013," said Vice Chairman George Kirkland. "In 2014 we expect to begin reaping the benefits of these investments as Gorgon and our deepwater projects ramp up production and begin contributing substantially to cash flow."

In Australia, the Gorgon LNG project is entering its third year of construction, with first production scheduled for 2014. The project is approximately one-third complete and has awarded contracts worth over $25 billion. The Wheatstone LNG project was sanctioned in September 2011 and is entering its first year of construction. First production is expected in 2016. The project has already awarded $6 billion in contracts. Once online, these two LNG projects are expected to add approximately 350,000 barrels net oil-equivalent production per day. Production from these LNG plants is expected to be sustained at these same levels for many years.

In the Gulf of Mexico, projects under development include Jack/St. Malo, Big Foot, Tahiti-2 and Tubular Bells. Both the Jack/St. Malo and Big Foot projects are approximately 20 percent complete. First production for both projects is expected in 2014.

Upstream spending for major capital projects in other regions includes:

  • Nigeria – development of the Usan and Agbami deepwater fields, and construction of the Escravos gas-to-liquids facility
  • Angola – Angola LNG and development of Mafumeira Sul
  • China – development of the Chuandongbei natural gas project
  • Brazil – development of the Papa-Terra deepwater field
  • Canada – Hebron offshore development
  • United Kingdom – development of the offshore Clair Ridge project
  • Kazakhstan/Russia – Caspian Pipeline expansion

Global exploration funding is expected to be $3 billion in 2012. This planned spending includes initial appraisal of new acreage captured over the past two years, including Liberia, China and various international shale gas plays. The program also supports continued exploration and appraisal activity in Chevron's focus areas of Western Australia, the Gulf of Mexico and western Africa.

About 30 percent of the Upstream capital program is targeted to support currently-producing assets and mitigate natural field decline. This includes further development of recently-acquired acreage in the Marcellus trend in the northeast U.S., the Wolfcamp play in West Texas and the Pattaini Basin offshore Thailand.


Capital spending of $3.6 billion in 2012 is budgeted for downstream operations. Investments include refinery projects geared toward improving returns by increasing energy efficiency and feedstock flexibility, and producing cleaner fuels.  Investments also are targeted toward producing base oils at Pascagoula, Mississippi, and expanding Oronite additives production in Singapore.   

Additional investments are expected to be funded by Chevron affiliates. These include the continued upgrading of the Yeosu refining complex in South Korea associated with the company's 50 percent-owned GS Caltex affiliate, and additional chemicals projects in the United States and Saudi Arabia associated with the company's 50 percent-owned Chevron Phillips Chemical Company LLC.

All Other

Expenditures of approximately $600 million in 2012 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, Calif. More information about Chevron is available at


This press release of Chevron Corporation 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," "projects," "believes," "seeks," "schedules," "estimates," "budgets" 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 crude oil and natural gas prices; changing refining, marketing and chemicals 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 pending or future litigation; the company's future acquisition or disposition of assets; 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 32 and 34 of the company's 2010 Annual Report on Form 10-K. In addition, such statements could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed in this press release could also have material adverse effects on forward-looking statements.

Published: December 2011