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Chevron said Wednesday it plans to spend $39.8 billion in 2014 on exploration and capital investment, 5.5 percent less than the $4.2 billion it spent in 2014.

The second biggest U.S. oil company also said  its total investment in the giant Gorgon LNG project in Australia will increase by $2 billion, up to $54 billion.

Gorgon LNG is about 75 percent complete and production is set to start in 2015, the company said.

Chevron plans to spend 90 percent of the budget on exploration, development and production.

The rest will go to downstream operations — primarily a hydrocracker unit in Mississippi, a company spokesperson said.

Chevron has targeted 2017 production at 3.3 million boepd, up from about 2.6 million currently.

The company, like other majors, is under pressure from shareholders to reduce capex spending and do more to lift share prices.

Industry insiders have warned that the strategy could slow production and eventually lead to higher energy costs.

“Notable major capital investments include developments in Australia, Nigeria, the U.S. deepwater Gulf of Mexico, the U.S. Permian Basin, Kazakhstan, Angola, and the Republic of the Congo,” Chevron said.