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[CHICAGO] Chevron Corp will increase asset sales by 50 per cent to US$15 billion and curtail new investment for the next two years after plunging oil prices squeezed cash flow.
Chevron's divestment of oil fields and other upstream assets will continue through 2017, Chairman and Chief Executive Officer John Watson said during a presentation to analysts in New York on Tuesday. Capital spending will decline through the period as construction of mega-projects such as the Gorgon gas- export development in Australia winds down, he said.
San Ramon, California-based Chevron, the second-largest US energy producer, reduced its spending plan for 2015 by 13 per cent to US$35 billion in January. Even with the cut, Watson reaffirmed plans to raise production 20 percent to the equivalent of 3.1 million barrels of crude a day by the end of 2017.
The adjustments are necessary to address "near-term market conditions," Watson said during his presentation.
Oil lost almost half its value since late June amid weakening international demand growth and rising supplies from US shale formations.
Chevron made 35 oil and gas discoveries and added the equivalent of 1.4 billion barrels of oil to its portfolio last year, Vice Chairman George Kirkland said at Tuesday's event. Those finds included deep-water assets in the US Gulf of Mexico and off the west coast of Africa, as well as North American shale fields, he said.
Mr Kirkland called 2014 "an excellent year for our exploration program around the world."
Chevron said the start of production from the Clair Ridge offshore development in the UK and the Sonam project in Angola will be delayed by a year to 2017. The company is an investor in the BP Plc-operated Clair Ridge development and operates Sonam.