Chevron Funds Upstream Growth in $5.1 Billion Capital Program

Chevron Corp. announced a $5.1 billion capital and exploratory spending program for 1999 and a plan to reduce expenses in 1999 by $500 million. The planned actions will fund the company's economic long-term growth plan and address the need to improve near-term results, given poor current industry conditions. The 1999 capital budget is about eight percent less than projected spending for 1998, but significant spending will continue for promising long-term growth projects in Kazakhstan, West Africa and the Gulf of Mexico. Ken Derr, chairman, discussed the company's budget plans for 1999. Among the topics he addressed was the current merger trend in the oil industry. "As I've said before, we will consider mergers or acquisitions as one possible way to improve business results. But it is not necessary for Chevron to merge with a competitor to continue to provide top returns to our shareholders. We need to execute our business plan." Derr added, "We have the financial strength to deal with low oil prices, poor economic conditions in Asia and other financial challenges over the next few years. Our business is one of cycles. I feel confident and optimistic about our company and our industry over the long term." The company plans to invest nearly $3.7 billion, or 73 percent of the total, in worldwide exploration and production. About $2.6 billion will be outside the United States, while about $1.1 billion will be in the U.S. One major project will be the deep-water U.S. Gulf of Mexico, where the Genesis platform, in water 2,600 ft. deep, is expected to start production in January. Chevron has a 57 percent working interest.