Chevron sets 2015 budget 13% lower than 2014 total investments

Oil and gas giant Chevron Corp. (NYSE:CVX) has set its 2015 capital and exploratory investment budget at $35.0 billion. Included in the 2015 program are $4.0 billion of planned expenditures by affiliates, which do not require cash outlays by Chevron. The 2015 budget is 13% lower than total investments for 2014.

While the $31 billion of cash capital expenditures is in line with Jefferies estimates, the analysts assumed a total capital budget of $36.5 billion, the analyst noted Friday.

“Although commodity prices have fallen recently, we believe long-term market fundamentals remain attractive," said Chairman and CEO John Watson. "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," he said.

"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 continued.

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). Roughly $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.

Roughly 75% of affiliate expenditures are associated with investments by Tengizchevroil LLP in Kazakhstan and Chevron Phillips Chemical Company LLC (CPChem) in the United States.

 

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