By JOE CARROLL and JAMES PATON
Chevron plans to trim capital spending by 5.2% to $39.8
billion next year amid rising labor costs, increased drilling
outlay and currency fluctuations from Canada to Iraq.
The budget for floating platforms, oil-refinery
repairs, pipelines and
rig rentals compares with 2013 estimated outlay of $42
billion, San Ramon, California-based Chevron said in a
The cost estimate for the Gorgon natural gas export complex
in Australia rose 4% to $54 billion, the second increase in
13 months. Weather and logistical delays will postpone
startup of the project
off the northwest coast by
about three months.
Chairman and CEO John S. Watson is counting on deep-water oil
discoveries in the Gulf of Mexico and gas exports from the India
n and Pacific oceans to boost
output 20% by the end of 2017. Chevron aspires to become the
worlds third-largest producer of liquefied natural gas,
or LNG, after Qatar and Shell, by the end of the decade.
Full-year 2013 capital spending exceeded the original $36.7
billion forecast because of acquisitions that required
additional outlays, the company said.
The budget increase at Gorgon, located on Australias
Barrow Island nature reserve off the northwest coast, follows
a 21% overrun a year ago. When Chevron approved Gorgon in
2009, the company estimated it would cost $37 billion.
costs and a strong
Australian dollar have hurt developers of LNG project
s in Australia from Chevron
to BG Group. Gorgon and Chevrons Wheatstone project
are among seven LNG
ventures being built in Australia at a cost of more than $180
billion to meet rising Asian demand.
Chevron will weigh expanding Gorgon against competing
investment proposals as costs in Australia put the
nations competitiveness at risk, the company said last
Chevron is applying lessons learned at Gorgon to Wheatstone,
which is almost 25% complete, the company said. Gorgon is
almost 75% complete. Royal Dutch Shell Plc and Exxon Mobil
Corp. are Chevrons partners in Gorgon.
Chevron may sell some oil and gas fields that promise leaner
returns than the new prospects, chief financial officer Pat
Yarrington told analysts and investors during a Nov. 1
conference call. Yarrington didnt specify what the
company might be considering exiting, nor did she provide a
Exxon is the largest energy company by market value, followed
by PetroChina, according to data compiled by