press release

CHEVRON ANNOUNCES $5.3 BILLION
CAPITAL PROGRAM FOR 1996

SAN FRANCISCO, Jan. 15, 1996 -- Chevron Corporation today announced a $5.3 billion capital and exploratory spending program for 1996, up about 5 percent from last year.

"Strategic capital investment is critical to delivering superior shareholder return over the long term. We have excellent business opportunities worldwide and are prepared to invest accordingly," said Chairman Ken Derr.

Chevron plans to invest about $3 billion, 57 percent of the total, in worldwide exploration and production, up about 10 percent from 1995. Consistent with the company's ongoing strategy to grow the international upstream business, about two thirds of these expenditures will be outside the United States. International upstream produced almost 70 percent of Chevron's 1 million barrels per day of liquids worldwide in 1995.

The company also believes that excellent opportunities exist in the United States and will invest more than $1 billion, in U.S. exploration and production, up 21 percent from 1995.

"Chevron has had its most successful year of oil discoveries in 15 years," Derr said. "We expect to have replaced more than 110 percent of our 1995 production, when the final numbers are in. Our 1996 capital and exploratory spending program supports further production and reserve increases."

The worldwide exploration and production program includes major projects in:

  • U.S. Gulf of Mexico, with a wide range of opportunities, some of which are in deep water where projected cost of development is dropping and reserve projections are rising.
  • Congo, with continued development of the N'Kossa and Kitina fields and expanded exploration efforts. N'Kossa production is expected to begin in mid-1996, with peak field production of 110,000 barrels of oil per day expected in late 1997. The company expects to conduct delineation work in 1996 on the promising Moho discovery.
  • Angola, with continued development of Areas B and C. In 1995, Chevron's share of production from Areas A and B approached 150,000 barrels of oil per day.
  • North Sea, with continued development of the huge Britannia natural gas field.
  • Canada, where development of the large Hibernia project offshore Newfoundland continues on schedule with production to start in early 1998.
  • Venezuela, with the recently signed service agreement with Maraven to operate the Boscan field.

For worldwide refining, marketing and transportation, Chevron plans to invest about $1.5 billion, down $300 million from 1995. U.S. investment will decline by over a third from 1995, which included expenditures to complete major capital programs at the El Segundo and Richmond refineries to manufacture cleaner burning fuels as mandated by the California Air Resources Board.

"Having completed this major investment program at our California refineries, our U.S. downstream investment is focused on strengthening our position as the motorist's choice for quality gasoline and quick service foods," Derr said.

Chevron refining, marketing and transportation investment outside the United States will approach $900 million. These expenditures will primarily support key projects and continued expansion into growth areas in the Pacific Rim by Caltex, Chevron's 50-percent-owned affiliate that operates in the Eastern Hemisphere. As in the United States, investments will focus on the customer as Caltex seeks to increase market share in several key areas of operation. With the completion of the Star refinery in Thailand in early 1996, Caltex refining investments will be for upgrade and expansion projects, primarily in Korea.

Chevron also plans to invest more than $500 million in the worldwide chemicals business in 1996, up significantly from 1995.

"This increase reflects our belief that there are very attractive opportunities for growth in the chemicals business, both in the U.S. and internationally," Derr said.

Expenditures in 1996 will include an expansion and modernization of the ethylene facilities at Chevron Chemical's Port Arthur facility and a paraxylene expansion at the Pascagoula refinery. The company also plans to invest in attractive opportunities internationally.

Updated: January 1996