In announcing its capital and exploratory spending program for 2003, ChevronTexaco Corp. said $2.2 billion of the allocated $8.5 billion will be spent on exploration, production, marketing and transportation infrastructure in the United States. The $8.5 billion figure includes $1.6 billion in affiliates’ expenditures.

“At the time of our merger, we promised significant capital synergies. This is the second consecutive year of delivering on that promise,” said CEO Dave O’Reilly. “Our 2003 program is 17% lower than pre-merger levels and reflects the continued rationalization of our capital program. This program fully supports our long-term strategies of pursuing high-return upstream growth projects and improving our global downstream and chemical business.”

ChevronTexaco said approximately 75% of its total capital spending, or about $6.4 billion, will be invested in worldwide exploration and production upstream. Of that, about $1.7 billion will be expended in the United States.

“Our large and diverse upstream portfolio allows us to high-grade our capital and exploratory program to focus on quality opportunities that support growth while improving overall returns,” said Peter Robertson, ChevronTexaco’s vice chairman. “We have the right people, technology, and world-class processes for selecting the best projects and executing them successfully.”

The company said its worldwide upstream program includes significant spending on longer-term growth projects in:

The upstream program also includes exploratory spending for ChevronTexaco’s exploration portfolio. The company said a majority of the exploratory spending will be in the “most promising” areas in the deepwater Gulf of Mexico, Nigeria and Angola. In addition, ChevronTexaco said it will continue to develop its existing, diversified U.S. upstream portfolio with the goals of maximizing long-term cash flow and value.

The company added that about $1.3 billion, or 15% of total spending, will be invested in global downstream — over $300 million less than in 2002. ChevronTexaco said $500 million of the downstream funds will be focused on the United States. Refining and marketing investments will total about $400 million in the United States, and $700 million internationally. Two hundred million dollars has been allotted for transportation investments, including pipelines to support expanded upstream production.

“The downstream capital program is primarily focused on improving safety, reliability and efficiency in existing facilities,” said Pat Woertz, executive vice president of worldwide downstream. “This program supports our commitment to improving the competitive returns of our businesses.”

ChevronTexaco said it will hold a conference call Friday (Jan. 31) at 8 a.m. PST to discuss its 2003 expenditure plan as well as its fourth quarter 2002 earnings and 2003 outlook. Interested parties can access the call on ChevronTexaco’s web site at www.chevrontexaco.com under the “Investor Relations” heading.

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