Chevron grows capital budget for 2013

Chevron announced a $36.7 billion capital budget for 2013, focused on growing its oil and natural gas production business, including in the deep-water Gulf of Mexico.

The spending plan is a $4 billion hike over the energy giant’s 2012 capital budget, but allocates fewer dollars to its downstream business, which includes refining and petrochemicals.

Chevron will infuse $33 billion, or 90 percent of the capital budget, into the exploration and production of oil and natural gas. Of that, $7.5 billion is to be spent in the United States. The global exploration program specifically will receive a $3.4 billion cash infusion in 2013, for activity in the Gulf of Mexico, West Africa, shale regions around the world and other areas.

Just $2.7 billion, or 7 percent of the capital budget, is slated for refining and other downstream operations, about half within the United States.

The capital spending plan includes $3.3 billion in expenditures by Chevron affiliates that don’t require cash payouts by the parent corporation.

“Consistent with long-stated strategies, we’re investing in a portfolio of very attractive oil and gas projects that will deliver volume growth and real value to our stockholders,” said CEO John Watson in a statement. “Next year’s program supports several projects currently under construction, including our Australian LNG projects and United States deep-water developments.”

The company is aiming for a production target of 3.3 million barrels per day by 2017.

In the Gulf of Mexico, Chevron plans to funnel money into its Jack/St. Malo and Big Foot projects, which are scheduled to begin production in 2014.

Among the other major projects for 2013 is the Gorgon LNG project in Australia, which is about 55 percent complete after three years of construction. The cost of the project, slated to begin operation in late 2014, has grown from $37 billion to $52 billion, due to weather delays, logistical problems and other issues, according to the company.

Still, Chevron leaders are touting the project as a good investment.

“While investment requirements have grown, oil prices, which directly impact the overall revenue stream, have increased by approximately 80 percent over the same time period,” said Vice Chariman George Kirkland in a written statement. “Our exploration program continues to discover additional gas resources that could support future expansions of our Australian LNG developments.”