SAN RAMON -- Chevron on Wednesday unveiled a 2014 capital and exploration budget of $39.8 billion -- down 5.5 percent from the roughly $4.2 billion that the energy giant expects to spend this year.

Capital spending is expected to dwindle in 2014 primarily because this year represents the peak of construction activity at Chevron's huge liquefied natural gas projects in western Australia.

San Ramon-based Chevron's Gorgon LNG project in Australia, now about 75 percent complete, is due to begin production in 2015. The Wheatstone project in the same country is now roughly 25 percent complete and should begin production around 2016, said Kurt Glaubitz, a company spokesman.

About 90 percent of the money Chevron intends to spend on capital and exploration projects in 2014 is expected to finance upstream ventures involving exploration, development and production.

The remainder will be spent on downstream operations, primarily on a hydrocracker unit in Mississippi, Glaubitz said. At present, Chevron plans no major capital expenditures for its two refineries in California, located in El Segundo and Richmond.

Chevron estimated $35.8 billion will be spent on upstream -- exploration, development and production -- operations in 2014. Of that, $27.9 billion will be spent on international upstream activities and $7.9 billion on U.S. upstream operations.


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"Notable major capital investments include developments in Australia, Nigeria, the U.S. deepwater Gulf of Mexico, the U.S. Permian Basin, Kazakhstan, Angola, and the Republic of the Congo," Chevron stated.

Contact George Avalos at 408-859-5167. twitter.com/georgeavalos