Chevron cuts 2017 production outlook by 6pc [Oil & Gas News]
(Oil & Gas News Via Acquire Media NewsEdge) Chevron, the second-largest US oil company, cut its 2017 production forecast by 6 per cent, citing project delays and asset sales, while saying high prices have pushed its new baseline for oil to north of $100 a barrel.The company, like many of its peers, has seen mixed results from heavy spending to lift oil and natural gas production, and shareholders in the sector are pushing for more cost discipline. Chevron trimmed its 2017 production outlook to 3.1 million barrels of oil equivalent per day (boepd) from a previous forecast of 3.3 million boepd, but stuck to plans to spend $40 billion this year on capital projects, about as much as last year."Our growth strategy remains intact, though some things have changed," chief executive John Watson said at the company's analyst day in New York.Despite the more cautious production forecast, Chevron raised the oil price used in its planning models to $110 a barrel from $79. ExxonMobil, the largest US oil company, is using a similar level of $109 a barrel in its budgets, based on 2013 average prices. "There comes a point when some projects just won't be able to compete for capital" below $110 per barrel, Watson told reporters after the analyst meeting. Watson cautioned that not all price rises go to Chevron. High crude oil prices have, paradoxically, cut Chevron's cost reimbursement in some contracts and increased costs, Watson said.
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