Dear Colleagues,
As we move into the final month of the year I want to thank all of you for the effort you’ve put into making our company more competitive. You’ve worked hard to reduce our operating expenses by finding efficiencies and prioritizing workflows. Many of you also have spent time developing new business plans. I want to commend you for the transparency and focus on the best course for the enterprise that was evident during the Planning Committee’s recently completed review of the business plan submissions.
The operating environment continues to be very challenging as commodity prices remain depressed. So our business plans are built around the five initiatives I have set out as priorities: reducing operating expenses, improving project execution, decreasing capital spending, completing our divestment program, and operating safely and reliably.
We’ve assessed the appropriate level of spend – for capital expenditures and operating expenses – given the current market environment. We expect capital and exploratory spend in 2016 to be $25 to $28 billion, down from $35 billion this year. This will enable us to complete and ramp-up the projects under construction; fund high-return short cycle-time investments; preserve options for viable long cycle-time projects; and, finally, ensure safe, reliable operations.
As we work to accomplish these goals it’s critical that we remain focused on maintaining operational excellence. I want to share with you a presentation Don Stelling, president of the Chevron Environmental Management Company, recently gave to the Management Committee that illustrates the importance of thinking ahead – a critical practice to remain competitive.
As we close out the year let’s keep our focus on delivering energy safely and reliably to make lives better. As always, please email any questions or comments to me at ceoconnection@chevron.com.
Until next month,
John