Chevron sees 2010 reserve growth, still below 2006

NEW YORK (Reuters) - Chevron Corp (CVX.N) on Tuesday said it expects its oil and gas reserves to grow about 5 percent over the next three years, but the growth won't quite offset the 7 percent drop the second-largest U.S. oil company reported in 2007.

The company said it expects its proved oil and gas reserves to be around 11.3 billion barrels of oil equivalent (boe) at the end of 2010, which is just slightly higher than what the company held before its 2005 purchase of Unocal.

That figure compares with year-end reserves of 10.78 billion boe for 2007, which in turn was down sharply from 11.62 billion boe at the end of 2006.

Like most large oil firms, Chevron has struggled to replace its production in recent years, due to project delays, restricted access to new fields, and contracts that give a larger share of reserves to host countries at higher oil prices.

With the exception of 2005, which was boosted by the Unocal acquisition, Chevron's reserves have dropped every year since 2003.

But the company sees near-term growth, helped by projects in Kazakhstan, Nigeria, Australia, Brazil, China, the United States and Angola.

Chevron also said it expects to sanction four downstream projects in 2008, all expected to begin production in 2010.

Besides an already announced pre-commercial plant to test heavy oil upgrading technology, the company said it expects these projects to be a crude flexibility project at its Richmond, California, refinery and yield improvement projects in El Segundo, California, and in South Korea.

The company said it will continue its plans to shrink its marketing footprint.

(Reporting by Michael Erman; Editing by Gary Hill)