NEW YORK –Chevron (IW 500/2) Tuesday said it plans $15 billion in asset sales through 2017 as it seeks to maintain a strong dividend for shareholders amid lower oil prices.
The divestment program expands by 50% a previous target to sell $10 billion in assets through 2016, according to a presentation by Chevron chief executive John Watson.
In 2014, Chevron divested $6 billion in assets, including the $1.3 billion sale of a stake in a Chad oil project to the Republic of Chad. The deal also comprised Chevron's interest in a pipeline system that transports oil from Chad to Cameroon.
We are well-positioned to manage through the recent drop in commodity prices and are taking several responsive actions, including curtailing capital spending and lowering costs." John Watson, Chevron CEO
Watson said the company was on track to increase production from 2.57 million barrels of oil equivalent per day in 2014 to 3.1 million in 2017. Major projects ramping up include Texas shale ventures and natural gas developments in Australia and Angola.
"We are well-positioned to manage through the recent drop in commodity prices and are taking several responsive actions, including curtailing capital spending and lowering costs," Watson said.
Shares in Dow member Chevron plummeted 3.1% to $48.46 in late-afternoon trade.
The move follows Chevron's January announcement of a 2015 capital budget of $35 billion, down 13% from last year. The company also halted its share buyback program, citing the big drop in oil prices.
In recent months, Chevron has also withdrawn from exploration ventures in Poland, Romania, Lithuania and Ukraine.
Other large oil companies, including ExxonMobil (IW 500/1) and Royal Dutch Shell (IW 1000/2), have also trimmed spending in response to about a 50% drop in oil prices since June. Leading oil services companies, including Halliburton and Schlumberger, have announced deep job cuts.
Copyright Agence France-Presse, 2015