Chevron Corp. announced its new US$39.8 billion capital and exploratory investment program for 2014.
Approximately 90% of the 2014 spending program is budgeted for upstream crude oil and natural gas exploration and production projects. Chevron allocated the lion's share ($35.8 billion) of its upstream budget for its international activities. $7.9 billion will be allocated for US upstream activities.
"We also anticipate 2014 will represent the peak year for spending on our Australian LNG projects as we move them closer to first production," said Chairman and CEO John Watson.
Planned capital spending is also directed toward improving crude oil and natural gas recovery and reducing natural field declines from existing producing assets throughout the world. The 2014 base program includes an increase in activity across several producing regions of North America as well as in Thailand and Indonesia.
In Australia, Chevron's Gorgon project has been under construction for four years and is almost 75% complete, the supermajor said. The current estimate for the cost of the foundation project is US$54 billion (AU$55 billion), with plant startup and first gas planned for mid-2015.
"Gorgon project economics are attractive," said Vice Chairman George Kirkland. "We continue to make steady progress against key project milestones and are applying lessons learned to our Wheatstone development which is almost 25% complete. Approximately 75% of our combined LNG offtake from the two projects is committed under firm, long-term sales and purchase agreements. These LNG developments are two of our most important future legacy assets, representing approximately 400,000 b/d of net production at full capacity. They will be substantial contributors to our cash flow for decades to come."
In the Gulf of Mexico, Chevron's projects under development include Jack/St. Malo, Big Foot, and Tubular Bells. The Jack/St. Malo hull has been moored at the offshore location and is on schedule for a 2014 startup. The Big Foot project is forecasting a third quarter 2014 tow to location and a 2Q 2015 startup.
Upstream spending in 2014 for major capital projects also includes:
Global exploration funding is expected to be $3.2 billion in 2014. This planned spending includes initial appraisal of new acreage acquired over the past two years, including Australia, the Kurdistan region of Iraq and Morocco. 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.