Chevron Corp. said Thursday it has set a $26 billion capital and exploratory spending program for 2011, which is about $4 billion more than it budgeted for this year.

Included in next year's spending program is $2 billion of expenditures by affiliates, which do not require cash outlays by Chevron. The $4.3 billion in acquisition costs associated with last month's purchase of onshore gas producer Atlas Energy Inc. are not included (see Daily GPI, Nov. 10).

"We have an unparalleled set of opportunities," said CEO John Watson. "Our previous investments have performed well, giving us the cash and financial strength to fund numerous attractive projects in rapid succession. We're building legacy asset positions, which will reward shareholders for decades to come."

Most of the 2011 budget, $22.6 billion or 85%, will be directed to upstream projects worldwide. Nearly $17.2 billion is budgeted for overseas development. In the United States Chevron plans to spend $5.4 billion for upstream activity.

On the agenda are several major natural gas developments, including liquefied natural gas (LNG) projects in Western Australia. In the U.S. Gulf of Mexico Chevron plans to work on deepwater exploration and developing prospects that include Jack/St. Malo, Tahiti-2, Big Foot, Perdido and Buckskin. Projects in Canada include Athabasca Oil Sands expansion and Hebron development.

Funding is to focus on exploration and appraisal programs in core hydrocarbon basins, and spending also will be directed toward existing assets to improve oil and gas recovery, and reduce natural field decline.

"We are moving into a period of higher capital spending as we fund new legacy projects, including sizeable investment in our LNG mega projects," said Vice Chairman George Kirkland.

About 10% ($2.9 billion) of next year's budget is allocated to downstream businesses, including $1.7 billion slated to be spent in the United States. Outlays in 2011 include projects at refineries in Mississippi and California to "enhance the company's ability to manufacture transportation fuels and base oils from a variety of feedstocks..."

In addition, Chevron said it would spend about $5 million next year for technology and power generation projects.

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