Chevron Corp.’s plans to develop a vast gas project in British Columbia have just been dealt a blow. Apache Corp., the energy giant’s partner, said last week that it wants out. That may seem a setback to Chevron’s attempts to boost flagging production, but it’s actually a blessing in disguise.
The Kitimat venture is a costly one, requiring an estimated $15-billion (U.S.) to get it up and running. Chevron has already been splashing out cash on a variety of monster fields. That’s what pushed capital spending up to almost $20-billion in the six months to June, the company reported in its second-quarter earnings on Friday. That’s a 7-per-cent increase on the same period last year and surpassed cash generated from operations by $2.6-billion.