Chevron cuts downstream budget

SAN RAMON, Calif., Dec. 11 (UPI) -- Despite describing its financial position as strong, American supermajor Chevron announced plans to cut its overall budget and downstream spending for 2010.

Chevron announced it was cutting capital and exploratory spending 5 percent from 2009 to $21.6 billion for next year.

Dave O'Reilly, chief executive officer and chairman at Chevron, said 80 percent of the budget for 2010 was set aside for upstream oil and gas projects.

"Much of our 2010 spending continues to be on large, multiyear projects consistent with our upstream growth strategies and on improving operating efficiency and reliability," he said.

Chevron said for 2010 it is targeting opportunities in the U.S. Gulf of Mexico and Latin America. Work in liquefied natural gas is slated for the Gorgon and Wheatstone projects in Australia and additional facilities in Angola.

Energy analysts said slumping demand, due in part to the global economic recession, contributed to the decision to cut downstream activity. O'Reilly said despite the strains, his company is on solid economic ground.

"Our company is in a strong financial position," he said.