Newspaper article THE JOURNAL RECORD

Chevron Plans Increase in 1990 Capital Spending

Newspaper article THE JOURNAL RECORD

Chevron Plans Increase in 1990 Capital Spending

Article excerpt

SAN FRANCISCO - A $4.3 billion worldwide capital and exploratory expenditure program for 1990 was announced Friday by San Francisco-based Chevron Corp.

Chevron said that the capital and exploratory expenditure program would be up slightly from 1989.

The capital and exploratory program includes Chevron's share of spending by international affiliates. It designates about $2.2 billion for petroleum exploration and development, unchanged from last year, and about $1.2 billion for refining and marketing, up about $250 million.

Chemical spending will be about $380 million, unchanged from last year after excluding the 1989 acquisition of Plexco, a major manufacturer of polyethylene pipe and products. Spending on shipping, information technology, land development, coal, minerals and other areas brings the total to $4.3 billion.

Chevron's capital and exploratory strategy remains focused on funding those businesses critical to long-term success, said Chairman Kenneth T. Derr. As Chevron invests to strengthen these businesses, it will continue efforts to improve near-term profitability.

Among the measures it will take, Derr said, are the sale or restructuring of non-strategic assets, including selected service stations, its Alaska refining and marketing facilities, marginal oil and gas fields, the Mount Taylor, N.M., uranium mine, Chevron Chemical Co.'s agricultural chemicals business and a Bahamas oil terminal.

"Our principal objective is unchanged," said Derr, who begins his second year as the company's chief executive. "We must improve Chevron's performance and make sure our shareholders benefit. The 1990 spending plans reflect Chevron's commitment to this objective, which is supported by our decision during 1989 to strive for a 15 percent per year average total return to shareholders for the period 1989 through 1993."

Exploration and production spending is split almost evenly between U.S. and international. However, international exploratory spending, projected at about $400 million, will be nearly twice the projected U.S. level. In refining and marketing, about $800 million of the $1.2 billion is earmarked for U.S. projects.

In international exploration and production, Chevron said, work will remain strong in the North Sea, West Africa and Indonesia. Startup of the Anoa Field in Indonesian waters this year will mark Chevron's first offshore Indonesia production.

Chevron Canada Resources Ltd., following up on recent strategic acquisitions in the Beaufort Sea, is evaluating 1990 drilling in that high-potential Arctic area. Meanwhile, exploratory drilling is proceeding onshore in Canada's Mackenzie River Basin, Northwest Territories, under a project started in 1987. Development of the Hibernia Field offshore Newfoundland is expected to begin late this year, Chevron said. …

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