Chevron announces $19.6 Billion capital and exploratory budget for 2007

Chevron Corp. announced a US $19.6 billion capital and exploratory spending program for 2007, a 20% increase from expected outlays of approximately $16 billion in 2006.

"Our 2007 capital and exploratory program is a record level of investment by our company," said Chairman and CEO Dave O'Reilly. "About 75% of next year's budget is for oil and gas exploration and production projects worldwide," O'Reilly added. "Another 20% is dedicated to the company's global refining, marketing and transportation businesses which manufacture and sell gasoline, clean diesel fuel, biofuels and other refined products in the company's marketing areas." O'Reilly said the 2007 budget includes $6.7 billion of total investment in the United States.

The majority of the planned increase is related to the company's exploration and production operations. The higher investment reflects the impact of several large, multiyear development projects being in their most capital-intensive phases and the effect of higher costs for materials and services currently experienced by the oil and gas industry worldwide. "Our long-range focus on capital discipline in executing our excellent project queue is critical in this environment," O'Reilly said.

Highlights of the 2007 Capital and Exploratory Spending Program

Chevron 2007 Planned Capital & Exploratory Expenditures $ Billions

International Upstream $10.6

International Downstream $2.2

Chemicals and Other $1.2

TOTAL (Including Chevron's Share of Expenditures by Affiliated Companies) $19.6

Expenditures by Affiliated Companies (2.4)

Cash Expenditures by Chevron Consolidated Companies $17.2

Capital and exploratory spending of $14.6 billion is budgeted for exploration, production and natural gas-related projects. A significant component of this spending relates to upstream development projects that are building on the company's successful and focused exploration results in recent years, including opportunities in the deepwater Gulf of Mexico and western Africa. Funding is also earmarked for further appraisal and evaluation of other prospective areas in the world's major hydrocarbon basins.

"Our upstream investments are aimed at finding and developing oil and gas resources to increase production and help supply the energy needs of world markets," said George Kirkland, Chevron's executive vice president of Upstream and Gas. "Our focus is both on improving the performance of existing fields and funding new projects that will provide this future production growth."

* Gulf of Mexico - deepwater exploration and development, including

* Angola - deepwater developments, including Tombua Landana, and

construction of liquefied natural gas (LNG) facilities.

* Republic of the Congo - development of the Moho-Bilondo field.

* Nigeria - continued development of the deepwater Agbami field, and

additional deepwater exploration.

* Kazakhstan - expansion of the Tengiz field.

* Australia - further development of the Greater Gorgon Area natural gas

resource offshore Western Australia.

* Canada - expansion of the Athabasca Oil Sands Project.

* Brazil - development of the Frade field.