Chevron Corp. is earmarking almost $40 billion for capital and exploratory investments in 2014, with nearly all of the budget directed at upstream projects, the oil major said late Wednesday.

An investment of $35.8 billion, 90% of the budget, is planned for exploration and production activities that include money for the deepwater Gulf of Mexico (GOM), where Chevron is a big player. Close to $8 billion will be for U.S. projects alone.

“We expect 2013 will be a relative peak year for investments, as we completed several attractive resource acquisitions,” said CEO John Watson.

The budget is about $2 billion less than the operator is spending for 2013, but unforeseen cost overruns raised the spending this year, particularly for the Big Foot project in the GOM, as well as at the Gorgon liquefied natural gas (LNG) export facility in Australia.

Chevron also spent around $4 billion for some acquisitions over the past few months that weren’t included in the 2013 budget.

“We also anticipate 2014 will represent the peak year for spending on our Australian LNG projects as we move them closer to first production,” said Watson.

Close to $5 billion will be handed to affiliates, with most (75%) for investments by Chevron Phillips Chemical Co. LLC in the United States and in Kazakhstan.

“Planned capital spending is also directed toward improving crude oil and natural gas recovery and reducing natural field declines from existing producing assets throughout the world,” management said. About 30% of the upstream capital would be allocated to “profitable” development wells and other projects associated with current producing assets.

“The 2014 base program includes an increase in activity across several producing regions of North America as well as in Thailand and Indonesia,” the San Ramon operator noted.

Chevron’s focus, said Kirkland, “is on developing resource projects that grow shareholder value,” said Vice Chairman George Kirkland. “For instance, we are steadily increasing activity levels to develop shale and other tight resources in Canada’s Duvernay, the Vaca Muerta in Argentina and the Permian Basin of the United States.”

Besides Big Foot, projects under development in the GOM include Jack/St. Malo and Tubular Bells. The Jack/St. Malo hull has been moored at the offshore location and is on schedule for a 2014 startup. The Big Foot project is forecasting a 3Q2014 tow to location and a 2Q2015 start-up.

Gorgon, which has been under construction for four years, is nearly 75% complete. The current cost estimate for the foundation project is $54 billion, with plant startup and first gas planned for the middle of 2015. Gorgon, like other Australian energy endeavors, including Chevron’s Wheatstone LNG project, has been plagued by huge labor and infrastructure costs. Still, Chevron executives believe it will be profitable once it ramps up to carry gas to Asia Pacific markets.

“Gorgon project economics are attractive,” said Kirkland. “We continue to make steady progress against key project milestones and are applying lessons learned to our Wheatstone development, which is almost 25% complete.

“Approximately 75% of our combined LNG offtake from the two projects is committed under firm, long-term sales and purchase agreements. These LNG developments are two of our most important future legacy assets, representing approximately 400,000 boe/d of net production at full capacity. They will be substantial contributors to our cash flow for decades to come.”

Chevron is also half-owner with Apache Corp. in the proposed gas export project for British Columbia, Kitimat LNG, which would be funded in 2014. A final investment decision has not been made, and Chevron provided no clues as to when there would be one. Also in Canada it plans to fund the Hebron offshore development.

Global exploration funding is expected to be $3.2 billion in 2014, including initial appraisal of new acreage acquired over the past two years, and to continue exploration and appraisal activity in the GOM, western Australia, West Africa, and in several shale gas regions around the world.

Tudor, Pickering, Holt & Co. analysts view the budget plans as a “slight positive;” it’s 1% below prior guidance “but still 5%-plus year/year organically.” Big Foot, they noted, is delayed from late 2014 to spring 2015 on construction delays. They also noted slippage in Gorgon, with the cost estimate $2 billion higher and a start-up delay of a few months.

In related news, Jon M. Huntsman Jr., former vice chairman of Huntsman Corp., was elected to the board effective Jan. 15; he would serve on the nominating and governance committee, as well as the public policy committee. Huntsman, 53, ran for the Republican nomination for president in 2011. He previously served as U.S. ambassador to China and was governor of Utah from 2005 to 2009. He remains on Huntsman’s board.