Chevron plans $36.7 billion capital, exploration spending for 2013
New York (Platts)--5Dec2012/553 pm EST/2253 GMT
The cost of the Gorgon LNG project offshore Western Australia has grown
40.5% to $52 billion, operator Chevron said Wednesday.
A cost and schedule review has been completed, with the total cost
estimate for the "foundation project" up from A$43 billion (US$37 billion) to
A$52 billion (US$52 billion), Chevron said in statement.
Chevron holds a 47.3% stake in Gorgon LNG, with partners Shell and
ExxonMobil each holding 25% and Japanese customers Osaka Gas, Tokyo Gas and
Chubu Electric Power holding 1.25%, 1% and 0.417%, respectively.
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Chevron, in its statement, unveiled a $36.7 billion capital and
exploratory spending program for 2013, of which about 90% is budgeted for
upstream oil and natural gas exploration and production projects. About 7% of
the spending is for the company's downstream efforts, it said.
Despite the higher Gorgon costs, Chevron Vice Chairman George Kirkland
said the project economics were still viable.
"Gorgon project economics are attractive," Kirkland said. "While
investment requirements have grown, oil prices, which directly impact the
overall revenue stream, have increased by approximately 80% over the same
In addition, the LNG project's nameplate capacity has jumped 4% to 15.6
million tons/year, he said.
Chevron said plant startup is planned for late 2014, leading to the
first LNG cargo in the first quarter 2015.
"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," Chairman and CEO John Watson said.
"Next year's program supports several projects currently under
construction including our Australian LNG projects and US deepwater
developments," Watson said. "As these and other projects come online, we
anticipate production will reach our 2017 goal of 3.3 million b/d."
In the Gulf of Mexico, Chevron said its Jack/St Malo project is 55%
complete, and its Big Foot development is about 65% complete. First
production from both fields is targeted for 2014.
Watson added he continues to continue the company's pattern of
"significant" stockholder distributions.
Chevron's 2013 capital program includes $3.3 billion of planned
expenditures by affiliates, which the company said do not require it to lay
--Starr Spencer, firstname.lastname@example.org
--Edited by Richard Rubin, email@example.com