NEWS Chevron steps up spending 5% for 1996

Chevron Corp. last week disclosed plans for a $5.3 billion capital and exploration spending program in 1996, up about 5% from last year.

Chevron plans to spend about $3 billion, or 57% of the total, on worldwide exploration and production, up about 10% from 1995. About two thirds will be spent outside the U.S. International operations accounted for almost 70% of Chevron's 1 million b/d of liquids production worldwide in 1995.

The company also will spend more than $1 billion on exploration and production in the U.S., up 21% from 1995.

"We have excellent business opportunities worldwide and are prepared to invest accordingly," said Chairman Ken Derr.

1995 was Chevron's most successful year for oil discoveries in 15 years, Derr said. "We expect to have replaced more than 110% of our 1995 production when the final numbers are in."

Chevron's 1995 worldwide exploration and production program includes major projects in:

U.S. Gulf of Mexico, with a wide range of opportunities, some of which are in deep water where projected cost of development is dropping and reserve projections are rising.
Congo, with continued development of Nkossa and Kitina fields and expanded exploration efforts. Nkossa production is expected to begin in mid-1996, with peak field flow of 110,000 b/d expected in late 1997. The company also expects to delineate the promising Moho discovery.
Angola, with continued development of Areas B and C. In 1995, Chevron's share of oil production from Areas A and B approached 150,000 b/d.
North Sea, with continued development of big Britannia gas field.
Canada, where development of Hibernia oil field off Newfoundland continues on schedule. Production is to start in early 1998.
Venezuela, where Chevron recently signed a service agreement with Maraven to operate Boscan field.

Downstream spending

Chevron plans to spend about $1.5 billion on worldwide refining, marketing, and transportation this year, down $300 million from 1995.

U.S. outlays will decline by more than one third from 1995 spending, which included expenditures to complete major capital programs at the El Segundo and Richmond, Calif., refineries to produce cleaner burning fuels as ordered by the California Air Resources Board.

"Having completed this major investment program at our California refineries, our U.S. downstream investment is focused on strengthening our position as the motorist's choice for quality gasoline and quick service foods," Derr said.

Chevron refining, marketing, and transportation spending outside the U.S. will approach $900 million.

These outlays mainly will support key projects and continued expansion into growth areas of the Pacific Rim by Caltex, Chevron's 50-50 venture with Texaco Inc. that operates in the Eastern Hemisphere. As in the U.S., spending will focus on the customer as Caltex seeks to increase market share in several key areas of operation.

With completion of the Star refinery in Thailand in early 1996, Caltex refining investments will go into upgrade and expansion projects, mainly in Korea.

Chevron also plans to invest more than $500 million in the worldwide chemicals business in 1996, up significantly from 1995. "This increase reflects our belief that there are very attractive opportunities for growth in the chemicals business, both in the U.S. and internationally," Derr said.

Spending in 1996 will include an expansion and modernization of ethylene facilities at Chevron Chemical's Port Arthur, Tex., site and a paraxylene expansion at the Pascagoula, Miss., refinery.

Chevron said it also plans to invest in "attractive opportunities" internationally.