press release

Chevron Press Release - Chevron Announces $5.2 Billion Capital Spending Program For 2000

SAN FRANCISCO, Jan. 11, 2000 -- Chevron Corp. today announced a $5.2 billion capital and exploratory spending program for 2000.

"Our spending program reflects continued confidence in our company's prospects for growth," said Chevron Chairman and CEO Dave O'Reilly. "We'll devote the majority of our capital dollars to developing the high potential of our extensive worldwide upstream portfolio, including recent property acquisitions in Thailand and Argentina."

In 1999, the company purchased Rutherford Moran Oil Corp. and took over operatorship of block B8/32, a high potential gas and oil area in the Gulf of Thailand. Also, Chevron acquired Petrolera Argentina San Jorge S.A., an exploration and producing company which accounts for 8 percent of the oil production in Argentina.

"These acquisitions will benefit Chevron's bottom line for many years," said O'Reilly, "and they are great examples of how we continue to remain agile and disciplined in managing growth. In 1999, we increased spending to take advantage of favorable market conditions and acquired companies with excellent exploration and production prospects."

The 2000 plan is 16.5 percent less than estimated actual 1999 spending because of the two acquisitions. The company plans to invest $3.6 billion, or 69 percent of total 2000 spending, in worldwide exploration and production. Spending in the United States will be $1.3 billion. The worldwide program includes funding for growth projects in:

  • Kazakhstan, where production at the Tengiz Field has risen to an average of 215,000 barrels per day (bpd) and is scheduled to reach 260,000 bpd this summer when additional production capacity is completed.
  • Africa, where Chevron-operated production has increased steadily in Angola and Nigeria. Angolan production recently reached a record 519,000 bpd, boosted by December start-up of the deep-water Kuito field, which is already producing 50,000 bpd.
  • Thailand, where gross production from block B8/32 recently reached 150 million cubic feet per day of gas and 24,000 bpd of liquids. Chevron will continue with growth plans through development work on the Maliwan area and appraisal of the recently announced discovery in the Jarmjuree area.
  • The United States, where deep-water gross production reached 98,000 bpd of oil and equivalent gas from the Gemini and Genesis fields at year-end 1999. The development of a third project, Typhoon, has been authorized, with first oil production expected by mid-2001. In addition, six deep-water exploratory wildcat wells will be drilled this year. Chevron will also increase its participation in the U.S. power sector through increased investment in Dynegy Inc.
  • Canada, where the company will participate in the Athabasca Oil Sands Project (20 percent interest). The project is targeted to produce 155,000 bpd of bitumen for upgrading to high-quality synthetic crude oil. First production is scheduled for late 2002.

In the area of transportation, Chevron plans to invest about $420 million. Most of this will be in Russia, where the Caspian Pipeline Consortium (CPC) is laying pipe to connect Tengiz Field to the Russian Black Sea port of Novorossiysk. The Caspian Pipeline will allow maximum development of Tengiz. Completion is expected in mid-2001. Also, Chevron will continue to accelerate gas development in Nigeria via the West African Pipeline project.

"With the on-time and under-budget start-up of Kuito, the first deep-water field in Angola, and commencement of construction on CPC, we surpassed major milestones for continued growth of our international oil and gas production," said Vice Chairman Dick Matzke, who oversees Chevron's worldwide exploration and production businesses. "Our strategy is to profitably grow our upstream business. Disciplined spending of the budgeted funds will allow us to do so. We have a track record of continuous improvement in lowering the cost and cycle time of our capital projects. Going forward we have intensified focus on building superior capability in project selection and execution."

In worldwide refining and marketing, Chevron plans to invest about $830 million, of which $530 million will be spent in the United States. Most of the remainder will be invested by Chevron's 50 percent-owned affiliate, Caltex Petroleum Corp., which operates in about 60 countries in Asia, Africa and the Middle East.

Chevron plans to invest just over $200 million in the worldwide chemicals business in 2000 -- roughly half the rate in 1999 following completion of several major projects.

Updated: January 2000