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Chevron expects 4 pct output growth this year

Chevron expects 4 pct output growth this year

Chevron Corp., the second-largest U.S. oil company, said Tuesday it expects to increase production by 4 percent this year as it continues to develop new oil and gas projects while putting off investments in some costlier, more mature fields.
However, despite the expected growth in 2009, the San Ramon, California-based company has backed off a long-term forecast of 3 percent increases in production, on average, between 2005 and 2010.
Asked during an analysts meeting in New York for a new long-range prediction, Chevron chief executive Dave O'Reilly declined, citing "a kind of uncertain point in the global economy" linked to the economic downturn.
"That's why we have been very careful not to try to put out a number because there are just so many moving parts," O'Reilly said.
Coming off a year in which its daily global production fell 3.4 percent, Chevron reiterated its plans to invest $22.8 billion in capital and exploratory projects in 2009, in line with 2008 levels.
Of that amount, the company plans to spend $17.5 billion at its exploration and production, or upstream, arm, and $4.3 billion on its refining and marketing, or downstream, operations.
Downstream spending this year will be focused on refinery upgrades.
The bulk of upstream spending will go toward new capital projects in places like Brazil and the Gulf of Mexico, with production expected to offset lower output from some existing fields, Chevron officials said.
George Kirkland, Chevron's executive vice president for upstream and gas, said the company is deferring investment in some existing projects because costs are too high and prices too low.
"Of course, the barrels associated with the base business do not go away," Kirkland said. "They will still be there when conditions improve."
Like everyone in the industry, Chevron has had to adjust its operations in the wake of oil's steep decline in the second half of 2008. After peaking near $150 in July, crude prices fell more than 70 percent to end the year at $44.60 a barrel. Light, sweet crude for April delivery fell 3 percent Tuesday to a barrel on the New York Mercantile Exchange Tuesday.
During Tuesday's meeting, Chevron Chief Financial Officer Pat Yarrington said even if oil remains in the $40-to-$50-a-barrel range for the coming months, "we're in a good balance-sheet position through the rest of the year."
"It's a very fluid environment as you know _ revenue coming down but costs coming down quite rapidly as well," Yarrington said.
Chevron ended 2008 with about $9.3 billion in cash and total debt of about $9 billion.
Kirkland said the company plans to drill more than 50 exploratory wells this year, spending about $2 billion _ in line with similar outlays in the past two years.
He spent much of his presentation to analysts touting the company's lineup of projects around the world and their output potential.
Long-term production growth, Kirkland said, is expected to be driven by 40 major capital projects. Chevron's stake in each exceeds $1 billion.
Over the next couple of years, he said, Chevron expects production from major project startups and ramp-ups to grow from 153,000 barrels of oil equivalent a day to 650,000 barrels a day.
Chevron shares rose $2.36, or 4 percent, to $60.64 Tuesday. They've traded in a range of $55.50 to $104.63 in the past year.


Updated : 2021-08-05 20:24 GMT+08:00