ChevronTexaco Corp. is setting aside 75% of next year’s budget on upstream exploration, production and global gas-related projects, including $1.9 billion to be spent in the United States, the company said Wednesday. Worldwide, the oil major has allocated $8.5 billion for capital and exploratory spending in 2004.

CEO Dave O’Reilly said the spending plan is designed to support ChevronTexaco’s focus on “high-return upstream growth projects” and to “commercialize our company’s large natural gas resource base.”

The San Ramon, CA-based company’s exploration and production spending program will focus on “projects that represent the best economic opportunities,” said Peter Robertson, vice chairman. Robertson said the upstream program builds on a string of exploration successes over the last two years and includes continued investment in impact exploration opportunities in deepwater Gulf of Mexico and West Africa, as well as prospective areas outside those regions.

Major 2004 spending, designed for longer-term projects, will be designated for Nigeria and Angola, Venezuela and the Gulf of Mexico (GOM). In the GOM, the company is continuing to appraise and engineer its deepwater discoveries, including the Tahiti project, which is slated for ramp up in 2007.

Robertson said the 2004 program also includes “significant” spending to commercialize the company’s international natural gas resource base, including the construction of additional liquefied natural gas (LNG) facilities. The upstream portion of global gas-related investments in 2004 is estimated at $400 million, out of a company-wide total of $500 million.

The global gas investments will go toward ChevronTexaco’s Gorgon project in Australia as well as projects in Angola and Nigeria. In the United States and Mexico, ChevronTexaco plans to continue two proposed LNG import and regasification terminals, one recently permitted (Port Pelican in the GOM) and the other in Baja California, Mexico. Those Baja permits are “aggressively being sought,” the company said.

About $1.4 billion, or 16% of total spending, is targeted for global downstream. Refining and marketing investments are estimated at about $400 million in the United States and $600 million internationally. Another $400 million is budgeted primarily for supply and transportation projects, including pipelines to support expanded upstream production.

Investments are expected to total about $200 million in chemicals and about $150 million in power and related businesses. Another $300 million is targeted for energy technology, information technology and facilities.

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