Chevron Corp. (CVX) said Wednesday it would continue to evaluate the cost of developing the Gorgon liquefied-natural-gas project over the next few months, without saying whether the current 43 billion Australian dollar (US$44.9 billion) price tag would change.
Chevron Corp. (CVX) said Wednesday it would continue to evaluate the
cost of developing the Gorgon liquefied-natural-gas project over the next few
months, without saying whether the current 43 billion Australian dollar
(US$44.9 billion) price tag would change.
Chevron's comments came after the Australian Financial Review newspaper
reported Wednesday that the project faced a cost increase of more than A$20
billion due to the strength of the local currency and construction delays.
Investors are anticipating a substantial increase after Chevron said in July it
was reviewing the cost of Gorgon, which also counts Exxon Mobil Corp. (XOM) and
Royal Dutch Shell PLC. (RDSB.LN) as large investors.
Chevron recently noted that the value of the Australian dollar had appreciated
by roughly 20% since construction began in 2009. A Chevron spokesman said in an
e-mailed statement Wednesday that the cost review for the project, located on
Barrow
Island
in
Western
Australia
state, was ongoing.
"Uncertainty and opportunity still exist in some key
assumptions--including logistics, productivity and weather--and we are
evaluating these assumptions based on actual performance and will continue to
do so over the next few months," the spokesman said.
Citing unidentified sources which it said have knowledge of Chevron's current
cost review, the Financial Review report said the
U.S.
company was poised to announce the increase--from the current budget of A$43
billion--by the end of the year.
Analysts at Deutsche Bank reiterated in client note Wednesday that they
expected the project to cost a total A$50 billion.
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