Chevron says it continues to monitor, respond to market conditions, and actively pursues cost reduction
Chevron announced a $35 billion budget for its capital and exploratory investment program for 2015, which is 13% lower than its total investments last year.
According to the company, its program for year included the $4 billion planned expenditures of its affiliates, which do not require Chevron’s cash outlays.
Chevron allocated approximately $12 billion for its planned upstream capital spending particularly on its existing base producing assets including its tight and resource investments (~$3.5 billion).
The company said $14 billion will be spend for the construction of major capital projects, which are already underway primarily LNG (~$8.5 billion) and deep water developments (~$3.5 billion).
Chevron allocated $3 billion for its global exploration funding accounts. According to the company approximately 75% of affiliate expenditures are related to investments by Tengizchevroil LLP in Kazakhstan and Chevron Phillips Chemical Company LLC (CPChem) in the United States.
Chevron market fundamentals remain attractive
In a statement, Chevron Chairman and CEO John Watson emphasized that the leadership of the company continues to execute against a consistent set of business strategies, and they are focused on creating long-term value for shareholders.
He emphasized that the company’s long-term market fundamentals are still attractive despite the recent decline of commodity prices.
“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,” said Watson.
Chevron actively pursues cost reduction
He added that the company continues to monitor, respond to market conditions, and actively pursues cost reduction throughout its supply chains to lower its overall outlays.
Earlier this month, Chevron informed Pennsylvania Department of Labor and Industry regarding its workforce reduction starting April 12. The company plans to eliminate as much as 162 jobs at its two locations at Beaver County.
The total number or rigs in the United States dropped by 90 to 1,543 rigs this week. Over the past eights weeks, the rig counts declined by 20%. Market observers suggested that Chevron responded to the situation by cutting jobs.
In a letter to the agency, Trip Oliver, manager of policy, government and public affairs of Chevron stated, “We regret the layoffs, but remain committed to the region and will continue to make significant investments in support of this long-term growth opportunity.”