Chevron cuts 2015 budget to $35 billion

APPARENTLY irked by the dwindling crude oil prices, Chevron Corporation has slashed its yearly budget for capital and exploratory investment programmes in 2015 to about $35.0 billion.

   Indeed, the budget, which included about $4.0 billion of planned expenditures by affiliates, which do not require cash outlays by Chevron, was 13 per cent lower than total investments for 2014.

   Chairman and Chief Executive Officer, John Watson, said: “We continue to execute against a consistent set of business strategies which are focused on creating long-term value for our shareholders. Although commodity prices have fallen recently, we believe long-term market fundamentals remain attractive.

  “Our investment priorities are ensuring safe, reliable operations and progressing our queue of projects under construction. Once on-line, these new projects are expected to measurably increase our production and cash generation.

  “We will continue to monitor and be responsive to market conditions, and to actively pursue cost reductions throughout our supply chain in order to lower overall outlays. We anticipate growing flexibility in our spend as projects under construction are completed and as supplier contracts are renewed. We are testing our short-cycle investments, particularly base business and unconventional assets, at current prices and are selecting only the most attractive opportunities to move forward,” Watson said.

 For Upstream, approximately $12 billion of planned upstream capital spending is directed at existing base producing assets, which includes shale and tight resource investments ($3.5 billion). 

   About $14 billion is related to the construction of major capital projects already underway, primarily LNG ($8.5 billion) and deepwater developments ($3.5 billion). Global exploration funding accounts for approximately $3 billion.

  Also, about 75 per cent of affiliate expenditures are associated with investments by Tengizchevroil LLP in Kazakhstan and Chevron Phillips Chemical Company LLC (CPChem) in the United States.