Chevron Corp. said Thursday that it would increase spending on exploration to drive production growth in 2011, but that it would devote fewer resources to the part of its business that makes, transports and sells gasoline, diesel and other products.
Total capital spending for the San Ramon, Calif.-based company next year will be $26 billion, about 20% more than for this year, Chevron said. The increase will be going "upstream," or into exploration and production of oil and natural gas.
More than $17 billion of that amount will be spent overseas, the company said.
Chevron continues to reduce the amount of resources it devotes to its "downstream" business, which includes the still-weak refining segment that has yet to fully recover from a drop in demand because of the global recession. Downstream spending will drop 14.7% to $2.9 billion.
Chevron Chief Executive John Watson said that growth potential was significant.
"We have an unparalleled set of opportunities," Watson said. "Our previous investments have performed well, giving us the cash and financial strength to fund numerous attractive projects in rapid succession. We're building legacy asset positions which will reward shareholders for decades to come."
Chevron is the nation's second-biggest integrated oil and natural gas company. Its shares rose 51 cents to $86.65.