Chevron sets 2013 capital budget of $36.7 billion

SAN RAMON, Calif. (AP) -- Chevron Corp. plans to spend $36.7 billion in 2013 on energy exploration and investments, including $3.3 billion of planned expenditures by affiliates, the oil giant said Wednesday.

That's up about 12 percent from this year's budget. About 90 percent of the 2013 budget is earmarked for upstream crude oil and natural gas exploration and production projects, while another 7 percent is for Chevron's downstream business that makes, transport and sell gasoline, diesel fuel and other refined products, fuel and lubricant additives, and petrochemicals.

The San Ramon, Calif., company said the spending will support projects like its Australian liquefied natural gas and U.S. deep-water developments. Chevron announced last year it was greenlighting a multi-billion-dollar LNG project called Gorgon in Western Australia that is one of the world's largest natural gas projects.

Chevron, the nation's second-largest oil company, said Wednesday its cost estimate for the Gorgon foundation project is now $52 billion, up from $37 billion, due in part to higher labor costs, logistics challenges, weather delays and the stronger Australian dollar.

Still, the company touted the benefits of Gorgon and added it expects startup in late 2014 and the first LNG cargo in the first quarter of 2015.

"While investment requirements have grown, oil prices, which directly impact the overall revenue stream, have increased by approximately 80 percent over the same time period," said Vice Chairman George Kirkland. "In addition, the LNG nameplate capacity has increased by 4 percent to 15.6 million tons per year."

Overall global exploration funding is expected to be $3.4 billion, including initial appraisal of new acreage acquired over the past two years in Suriname, the Kurdistan region of Iraq and Sierra Leone.