Citing confidence in growth prospects, San Francisco-basedChevron Corp. said it plans to spend $5.2 billion this year. Still,that figure, which includes increased investment in Dynegy Inc., isless than estimated 1999 spending. “We’ll devote the majority ofour capital dollars to developing the high potential of ourextensive worldwide upstream portfolio, including recent propertyacquisitions in Thailand and Argentina,” said CEO Dave O’Reilly.

The 2000 plan is 16.5% less than estimated actual 1999 spendingbecause of two 1999 overseas acquisitions. Chevron plans to spend$3.6 billion, or 69% of total 2000 spending, in worldwideexploration and production. Spending in the United States will be$1.3 billion.

In the United States, deep-water gross production reached 98,000b/d of oil and equivalent gas from the Gemini and Genesis fields atyear-end 1999. The development of a third project, Typhoon, hasbeen authorized, with first oil production expected by mid-2001.Also six deep-water exploratory wildcat wells will be drilled thisyear. Chevron also will increase its participation in the U.S.power sector through increased investment in Dynegy.

The company said in June that it will invest between $200million and $240 million in the new Dynegy, formed by the merger ofDynegy with Illinova Corp. Chevron held a 29% in the old Dynegy andaims to retain a 24% interest in the combined company.

In Canada Chevron will participate in the Athabasca Oil SandsProject (20% interest). The project is targeted to produce 155,000b/d of bitumen for upgrading to high-quality synthetic crude oil.First production is scheduled for late 2002.

Also holding an optimistic outlook is Oklahoma City-basedKerr-McGee, which plans to boost 2000 spending 14% from 1999 levelsto $675 million. The budget for exploration and production in 2000is $540 million. Of this amount, $175 million is allocated to theNorth Sea, $190 million to the Gulf of Mexico, $70 million to U.S.onshore and $105 million to other international areas.Additionally, Kerr-McGee has set a budget of $170 million forexploration expense. The capital budget does not include the $555million acquisition of Repsol Group’s upstream United Kingdom NorthSea operations announced in December.

“We have a large acreage inventory with many drillableexploration prospects, and this budget will allow us to takeadvantage of these opportunities,” said Luke R. Corbett, Kerr-McGeeCEO.

Joe Fisher, Houston

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