Chevron Sees Output Growth From New Projects

Chevron said on Tuesday its new oil and natural gas projects will produce about 1.1 million barrels of oil equivalent per day by 2011, and it will keep exploration spending high in the coming years.

The production from those projects will give the company average annual output growth of at least 3% through 2010, it said.

"We are making progress on more than 30 oil and gas development projects that represent a Chevron investment of at least $1 billion each," Chairman and Chief Executive Officer Dave O'Reilly said in a statement issued as part of a Chevron presentation to analysts.

Those projects would contribute to an average proved reserves replacement rate of more than 100% for the next five years.

The company had said in February its 2007 production would drop to an average of 2.6 million barrels per day from 2.67 million in 2006.

Spending on exploration would be "at a higher level than it's been in the past," Bobby Ryan, vice president for global exploration, told analysts, although the expected $2 billion in planned spending for 2007 would be less than the 2006 level.

Total capital expenditures for 2007 are still expected to be $19.6 billion, including affiliate spending, with 39% of that in North America, 25% in Africa, 19% in Asia-Pacific, 7% in the Caspian region, and 10% in the rest of the world.

In its refining operations, Chevron is seeking to add flexibility to its plants to process heavier and higher-sulphur crude oils.

The company said it plans to selectively divest assets, which will give it a more focused footprint with a strong presence in fewer locations.