press release

Chevron Announces $5.1 Billion Capital Program In 1995


SAN FRANCISCO, Feb. 7, 1995 -- Chevron Corp. today announced a $5.1 billion capital and exploratory spending program for 1995, up about 5 percent from last year.

"Profitably growing our company is a key element in our efforts to deliver superior stockholder returns," said Chairman Ken Derr. "This program reflects the wide range of opportunities we have, particularly in international areas, and our overall philosophy of funding growth investments with cash from operations."

Chevron plans to invest about $2.7 billion in worldwide exploration and production, unchanged from 1994. About 70 percent of these expenditures will be outside the United States, in core operations and newly opened areas of opportunity, consistent with the company's strategic intent to grow its international upstream business. U.S. exploration and production spending of just over $800 million is the same as 1994 expenditures.

"Since we began shifting our focus to international upstream in 1992, we have increased non-U.S. oil and gas production more than 20 percent and increased our combined international oil and gas reserves by 80 percent," Derr said.

In 1994 alone Chevron replaced 153 percent of its non-U.S. oil and gas production. Reserves were added in the U.K. North Sea, Congo, Angola, Nigeria, Zaire and Papua New Guinea. In the United States, Chevron replaced 112 percent of its natural gas production. Major contributors to this success were the Norphlet Trend in the Gulf of Mexico and the Laredo area in Texas. Worldwide, Chevron replaced 114 percent of its oil and gas production.

"We were pleased with our successful reserves replacement this year. Our 1995 spending program supports further production and reserves increases," Derr continued.

The worldwide exploration and production program includes major projects in:

  • Angola, with continued investment and expansion of production in Cabinda Areas B & C;
  • Congo, with development of the N'Kossa and Kitina fields and expanded exploration efforts;
  • Indonesia, with expansion of the Duri steamflood project, already the world's largest, where the field holds 3.2 billion barrels of recoverable reserves;
  • North Sea, with continued development of the Alba Field and development of the huge Britannia natural gas field due on stream in 1998;
  • Kazakhstan, with continued development of the giant Tengiz Field;

    Canada, with continued development of the large Hibernia project offshore Newfoundland, leading to production starting in early 1998;

  • U.S. Gulf of Mexico, with expanded production from the vast Norphlet Trend, where the company's share of recoverable gas reserves is estimated at about 1 trillion cubic feet.

For worldwide refining, marketing and transportation, Chevron plans to invest about $1.9 billion, up 5 percent from 1994. U.S. expenditures will decline slightly from the $900 million spent last year, the peak expenditure year for the mandated Clean Air Act. A large portion of the 1995 expenditures will be used to complete the major capital program to manufacture clean fuels at the Richmond and El Segundo refineries as mandated by the California Air Resources Board.

"These downstream investments will allow us to manufacture California reformulated gasoline as well as improve the efficiency of our West Coast refineries," Derr noted.

Outside the United States, Chevron refining, marketing and transportation investments will total approximately $1 billion, with Caltex accounting for about 90 percent. Caltex is Chevron's 50-percent-owned affiliate that operates in the Eastern Hemisphere. Caltex plans to invest about 25 percent more than in 1994. Key projects include continuing construction of a new Thailand refinery, scheduled to start operations in mid-1996, and expansion and upgrade projects at refineries in Singapore and Korea, which are to be on-line by the end of 1995. Expenditures will also increase in the marketing area, consistent with Caltex's increased focus on the retail marketing business.

Chevron also plans to invest over $200 million in the worldwide chemicals business in 1995, up more than 60 percent from 1994 spending. The program includes the recently announced expansion of Chevron Chemical's Low Density Polyethylene manufacturing facility at Chevron's Cedar Bayou Plant in Baytown, Texas.

Updated: February 1995