Chevron 2006 Annual Report Download - page 39

CHEVRON CORPORATION 2006 ANNUAL REPORT 37
responding periods. The 2005 amount excludes the $17.3 bil-
lion acquisition of Unocal Corporation.
Of the $16.6 billion in expenditures for 2006, about
three-fourths, or $12.8 billion, related to upstream activi-
ties. Approximately the same percentage was also expended
for upstream operations in 2005 and 2004. International
upstream accounted for about 70 percent of the worldwide
upstream investment in each of the three years, refl ecting the
company’s continuing focus on opportunities that are avail-
able outside the United States.
In 2007, the company estimates capital and exploratory
expenditures will be 18 percent higher at $19.6 billion,
including $2.4 billion of spending by affi liates. About
three-fourths of the total, or $14.6 billion, is budgeted for
exploration and production
activities, with $10.6 billion
of this amount outside the
United States. Spending in
2007 is primarily targeted
for exploratory prospects in
the deepwater Gulf of Mex-
ico and western Africa and
major development projects
in Angola, Australia, Brazil,
Kazakhstan, Nigeria, the
deepwater Gulf of Mexico
and an oil sands project
in Canada.
Worldwide downstream
spending in 2007 is esti-
mated at $3.8 billion, with
about $1.6 billion for proj-
ects in the United States.
Capital projects include
upgrades to refi neries in the
United States and South
Korea and construction of
liquefi ed natural gas tankers
and gas-to-liquids facilities in
support of associated upstream projects.
Investments in chemicals, technology and other cor-
porate businesses in 2007 are budgeted at $1.2 billion.
Technology investments include projects related to molecular
transformation, unconventional hydrocarbons, oil and gas
reservoir management and development of second-generation
biofuel production.
The company has outstanding public bonds issued by
Chevron Corporation Profi t Sharing/Savings Plan Trust
Fund, Chevron Canada Funding Company (formerly
Chevron Texaco Capital Company), Texaco Capital Inc. and
Union Oil Company of California. All of these securities are
guaranteed by Chevron Corporation and are rated AA by
Standard and Poor’s Corporation and Aa2 by Moody’s Inves-
tors Service. The company’s U.S. commercial paper is rated
A-1+ by Standard and Poor’s and P-1 by Moody’s, and the
company’s Canadian commercial paper is rated R-1 (middle)
by Dominion Bond Rating Service. All of these ratings
denote high-quality, investment-grade securities.
The company’s future debt level is dependent primarily on
results of operations, the capital-spending program and cash
that may be generated from asset dispositions. The company
believes that it has substantial borrowing capacity to meet
unanticipated cash requirements and that during periods of
low prices for crude oil and natural gas and narrow margins
for refi ned products and commodity chemicals, it has the fl ex-
ibility to increase borrowings and/or modify capital-spending
plans to continue paying the common stock dividend and
maintain the company’s high-quality debt ratings.
Common stock repurchase program A $5 billion stock
repurchase program initiated in December 2005 was com-
pleted in November 2006. During 2006, about 78.5 million
common shares were repurchased under this program at a
total cost of $4.9 billion.
In December 2006, the company authorized the acquisi-
tion of up to an additional $5 billion of its common shares
from time to time at prevailing prices, as permitted by securi-
ties laws and other legal requirements and subject to market
conditions and other factors. The program is for a period
of up to three years and may be discontinued at any time.
Under this program, the company acquired approximately
1.3 million shares in the open market for $100 million
during December 2006 and through mid-February 2007
increased the total shares acquired to 8.2 million at a cost
of $592 million.
Capital and exploratory expenditures Tot al repor ted
expenditures for 2006 were $16.6 billion, including $1.9
billion for the company’s share of affi liates’ expenditures,
which did not require cash outlays by the company. In 2005
and 2004, expenditures were $11.1 billion and $8.3 bil-
lion, respectively, including the company’s share of affi liates’
expenditures of $1.7 billion and $1.6 billion in the cor-
Capital and Exploratory Expenditures
2006 2005 2004
Millions of dollars U.S. Int’l. Total U.S. Int’l. Total U.S. Int’l. Total
Upstream – Exploration and Production $ 4,123 $ 8,696 $ 12,819 $ 2,450 $ 5,939 $ 8,389 $ 1,820 $ 4,501 $ 6,321
Downstream – Refi ning, Marketing and
Transportation 1,176 1,999 3,175 818 1,332 2,150 497 832 1,329
Chemicals 146 54 200 108 43 151 123 27 150
All Other 403 14 417 329 44 373 512 3 515
Total $ 5,848 $ 10,763 $ 16,611 $ 3,705 $ 7,358 $ 11,063 $ 2,952 $ 5,363 $ 8,315
Total, Excluding Equity in Affi liates $ 5,642 $ 9,050 $ 14,692 $ 3,522 $ 5,860 $ 9,382 $ 2,729 $ 4,024 $ 6,753
'%'
(,%'
-%'
0%'
()%'
*%'
<OGCFI8K@FEGIF;L:K@FEÇ
:8G@K8C<OGCFI8KFIP
<OG<E;@KLI<J!
9`cc`fejf][fccXij
Le`k\[JkXk\j
@ek\ieXk`feXc
<ogcfiXk`feXe[gif[lZk`fe
\og\e[`kli\j`eZi\Xj\[dfi\
k_Xe+Y`cc`fe`e)''-%DXep
j`^e`]`ZXekgifa\Zkjn\i\`ek_\`i
ZXg`kXc$`ek\ej`m\g_Xj\2flkcXpj
Xcjf`eZcl[\[k_\]lcc$p\Xi\]]\Zk
f]jg\e[`e^fe]fid\iLefZXc
gifg\ik`\j%
!@eZcl[\j\hl`kp`eX]Ôc`Xk\j
'*') '+ ', '-
()%/