Profile: Chevron Corporation (CVX)

Chevron Corporation (Chevron), incorporated in 1926, manages its investments in subsidiaries and affiliates, and provides administrative, financial, management and technology support to the United States and International subsidiaries that engage in fully integrated petroleum operations, chemicals operations, mining operations of coal and other minerals, power generation and energy services. Exploration and production (upstream) operations consist of exploring for, developing and producing crude oil and natural gas, and also marketing natural gas. Refining, marketing and transportation (downstream) operations relate to refining crude oil into finished petroleum products; marketing crude oil and the many products derived from petroleum, and transporting crude oil, natural gas and petroleum products by pipeline, marine vessel, motor equipment and rail car. Chemical operations include the manufacture and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant oil additives. The upstream and downstream activities of the Company are dispersed geographically, with operations in North America, South America, Europe, Africa, the Middle East, Asia, and Australasia. In April 2009, Reliance Industries Limited bought back Chevron Corporation's 5% stake in Reliance Petroleum Limited. In June 2009, TOTAL S.A. completed its takeover of Chevron's operations in Kenya. Following the acquisition, Chevron Kenya Ltd. will change its name to Total Marketing Kenya. In June 2009, the Company's subsidiary, Chevron Africa Holdings Ltd., completed the sale of Texaco Cameroun S.A. to Corlay Global S.A.

Exploration and Production

During the year ended December 31, 2008, Chevron conducted exploration and production operations in the United States and various other countries. Worldwide oil-equivalent production, including volumes from oil sands, was approximately 2.53 million barrels per day in 2008. As of December 31, 2008, the Company owned or had under lease or similar agreements undeveloped and developed oil and gas properties located worldwide. The Company sells crude oil and natural gas from its producing operations under a range of contractual arrangements. In the United States, the Company is contractually committed to deliver to third parties and affiliates approximately 414 billion cubic feet of natural gas through 2011. Outside the United States, the Company is contractually committed to deliver to third parties a total of approximately 865 billion cubic feet of natural gas from 2009 through 2011 from Argentina, Australia, Canada, Colombia, Denmark and the Philippines.

The United States upstream activities are concentrated in California, the Gulf of Mexico, Louisiana, Texas, New Mexico, the Rocky Mountains and Alaska. Average net oil-equivalent production in the United States during 2008 was 671,000 barrels per day, composed of 421,000 barrels of crude oil and natural gas liquids and 1.5 billion cubic feet of natural gas. In 2008, the Company’s average net oil-equivalent production from the San Joaquin Valley in California was 215,000 barrels per day, composed of 196,000 barrels of crude oil, 88 million cubic feet of natural gas and 5,000 barrels of natural gas liquids. In 2008, its average net oil-equivalent production for the Company’s combined interests in the Gulf of Mexico shelf and deepwater areas, and the onshore fields in the region was 160,000 barrels per day. The daily oil-equivalent production comprised 76,000 barrels of crude oil, 439 million cubic feet of natural gas and 10,000 barrels of natural gas liquids.

During 2008, the Company’s production outside California and the Gulf of Mexico averaged 296,000 net oil-equivalent barrels per day, composed of 101,000 barrels of crude oil, 974 million cubic feet of natural gas and 33,000 barrels of natural gas liquids. In Africa, the Company is engaged in exploration and production activities in Angola, Chad, Democratic Republic of the Congo, Libya, Nigeria and Republic of the Congo. Chevron holds Company-operated working interests in offshore Blocks 0 and 14 and non-operated working interests in offshore Block 2 and the onshore Fina Sonangol Texaco (FST) area. Net production from these operations in 2008 averaged 154,000 barrels of oil-equivalent per day. The Company operates in areas A and B of the 39%-owned Block 0, which averaged 109,000 barrels per day of net liquids production in 2008. The Block 0 concession extends through 2030.

In the Company’s 31%-owned Block 14, net production in 2008 averaged 33,000 barrels of liquids per day. Activities in 2008 included development drilling at the Benguela Belize-Lobito Tomboco (BBLT) project and the ongoing evaluation of the Negage project. Development and production rights for the various fields in Block 14 expire between 2027 and 2029. Chevron operates and holds a 31% interest in the Lianzi Development Area located between Angola and Republic of the Congo. Chevron has a 32% non-operated working interest in the Nkossa, Nsoko and Moho-Bilondo exploitation permits and a 29% non-operated working interest in the Kitina exploitation permit, all of which are offshore. Net production from the Republic of the Congo fields averaged 13,000 barrels of oil-equivalent per day in 2008.

Chevron participates in a project to develop crude-oil fields in southern Chad and transport the produced volumes by pipeline to the coast of Cameroon for export. Chevron has a 25% non-operated working interest in the producing operations and a 21% interest in two affiliates that own the pipeline. Average daily net production in 2008 was 29,000 barrels of oil-equivalent. Chevron is the operator and holds a 100% interest in the onshore Block 177 exploration license. Chevron holds a 40% interest in 13 concessions predominantly in the onshore and near-offshore region of the Niger Delta. The Company operates under a joint-venture arrangement in this region with the Nigerian National Petroleum Corporation (NNPC), which owns a 60% interest. The Company also owns varying interests in deepwater offshore blocks. In 2008, the Company’s net oil-equivalent production in Nigeria averaged 154,000 barrels per day, composed of 142,000 barrels of liquids and 72 million cubic feet of natural gas.

The Company’s major producing countries in the Asia-Pacific region include Australia, Azerbaijan, Bangladesh, Kazakhstan, the Partitioned Neutral Zone located between Saudi Arabia and Kuwait, and Thailand. During 2008, the average net oil-equivalent production from Chevron’s interests in Australia was 96,000 barrels per day, composed of 34,000 barrels of liquids and 376 million cubic feet of natural gas. Chevron has a 17% non-operated working interest in the North West Shelf (NWS) Venture offshore Western Australia. Daily net production from the project during 2008 averaged 25,000 barrels of crude oil and condensate, 374 million cubic feet of natural gas, and 4,000 barrels of liquid petroleum gas (LPG). Approximately 70% of the natural gas was sold in the form of liquefied natural gas (LNG) to major utilities in Japan, South Korea and China, primarily under long-term contracts. The remaining natural gas was sold to the Western Australia domestic market.

Chevron holds a 10% non-operated working interest in the Azerbaijan International Operating Company (AIOC), which produces crude oil in the Caspian Sea from the Azeri-Chirag-Gunashli (ACG) project. Chevron also has a 9% interest in the Baku-Tbilisi-Ceyhan (BTC) affiliate, which transports AIOC production by pipeline from Baku, Azerbaijan, through Georgia to Mediterranean deepwater port facilities in Ceyhan, Turkey. In 2008, the Company’s daily net production from AIOC averaged 29,000 barrels of oil-equivalent. Chevron holds a 20% non-operated working interest in the Karachaganak project, which is being developed in phases. During 2008, Karachaganak net oil-equivalent production averaged 66,000 barrels per day, composed of 41,000 barrels of liquids and 153 million cubic feet of natural gas. Chevron operates and has 98% interests in three production sharing contracts (PSCs) in onshore Blocks 12, 13 and 14 and an 88% interest in Block 7. Net oil-equivalent production from these operations in 2008 averaged 71,000 barrels per day, composed of 414 million cubic feet of natural gas and 2,000 barrels of liquids.

The Company operates and holds a 55% interest in the 1.2 million-acre (4,709 square kilometers) Block A, located offshore in the Gulf of Thailand. Chevron has operated and non-operated working interests in several different offshore blocks in Thailand. The Company operates off the southwest coast in Vietnam and has a 42% interest in a PSC that includes Blocks B and 48/95, and a 43% interest in another PSC for Block 52/97. Chevron also has a third PSC with a 50%-owned and operated interest in Block B122 offshore eastern Vietnam. Chevron has one operated and three non-operated working interests in several areas in China. Net oil-equivalent production from the non-operated areas in 2008 averaged 22,000 barrels per day, composed of 19,000 barrels of crude oil and condensate and 22 million cubic feet of natural gas.

The Company holds a 45% non-operated working interest in the Malampaya natural-gas field located 50 miles (80 kilometers) offshore Palawan Island. Net oil-equivalent production in 2008 averaged 26,000 barrels per day, composed of 128 million cubic feet of natural gas and 5,000 barrels of condensate. Chevron’s operated interests in Indonesia are managed by several wholly owned subsidiaries, including PT. Chevron Pacific Indonesia. The other international region is composed of Latin America, Canada and Europe. Chevron holds operated interests in several concessions and one exploratory block in the Neuquen and Austral basins. Net oil-equivalent production in 2008 averaged 44,000 barrels per day, composed of 37,000 barrels of crude oil and natural gas liquids and 45 million cubic feet of natural gas. The Company also holds a 14% interest in the Oleoductos del Valle S.A. pipeline. Chevron holds working interests ranging from 30% to 52% in three deepwater blocks in the Campos Basin. Chevron also holds a 20% non-operated working interest in one block in the Santos Basin. The Company operates the offshore Chuchupa and the onshore Ballena and Riohacha natural gas fields as part of the Guajira Association contract.

Chevron’s interests in Trinidad and Tobago include 50% ownership in four partner-operated blocks in the East Coast Marine Area offshore Trinidad, which includes the Dolphin and Dolphin Deep producing natural-gas fields and the Starfish discovery. Chevron also holds a 50% operated interest in the Manatee area of Block 6d. The Company operates in two exploratory blocks offshore Plataforma Deltana, with working interests of 60% in Block 2 and 100% in Block 3. Chevron also holds a 100% operated interest in the Cardon III exploratory block, located north of Lake Maracaibo in the Gulf of Venezuela. The Company’s activities in Canada include non-operated working interests of 27% in the Hibernia and Hebron fields offshore eastern Canada and 20% in the Athabasca Oil Sands Project (AOSP), and operated interests of 60% in the Ells River In Situ Oil Sands Project.

Chevron has a 29% non-operated working interest in an exploration license in Block 4 offshore West Greenland in the Baffin Basin. Chevron has a 15% working interest in the partner-operated Danish Underground Consortium. It operates and holds a 40% interest in five offshore exploratory blocks. Chevron is the operator and holds interests ranging from 34% to 80% in nine blocks in the Dutch sector of the North Sea. The Company holds an 8% interest in the partner-operated Draugen Field. The Company’s average net oil-equivalent production in 2008 from 11 offshore fields was 106,000 barrels per day, composed of 71,000 barrels of crude oil and natural gas liquids and 208 million cubic feet of natural gas.

Refining, Marketing and Transportation

During 2008, the Company sold its 4% ownership interest in a refinery in Abidjan, Cote d’Ivoire, and its 8% ownership interest in a refinery in Cameroon. The Company’s fuel refineries in the United States, Europe, Canada, South Africa and Australia produce low-sulfur fuels. Chevron holds a 5% interest in Reliance Petroleum Limited, a company formed by Reliance Industries Limited to construct a refinery in Jamnagar, India. Chevron processes imported and domestic crude oil in its United States refining operations. Imported crude oil accounted for about 88% of Chevron’s United States refinery inputs in 2008. In Nigeria, Chevron and the Nigerian National Petroleum Corporation are developing a 34,000 barrel-per-day, gas-to-liquids facility at Escravos designed to process natural gas supplied from the Phase IIIA expansion of the Escravos Gas Plant (EGP). The Company markets petroleum products under the brands of Chevron, Texaco and Caltex worldwide.

In the United States, the Company markets under the Chevron and Texaco brands. The Company supplies directly or through retailers and marketers approximately 9,700 Chevron- and Texaco-branded motor vehicle retail outlets, primarily in the mid-Atlantic, southern and western states. Approximately 500 of these outlets are Company-owned or -leased stations. Outside the United States, Chevron supplies directly or through retailers and marketers approximately 15,300 branded service stations, including affiliates. In British Columbia, Canada, the Company markets under the Chevron brand. The Company markets in the United Kingdom, Ireland, Latin America and the Caribbean using the Texaco brand. In the Asia-Pacific region, southern Africa, Egypt and Pakistan, the company uses the Caltex brand.

The Company operates through affiliates under various brand names. In South Korea, the Company operates through its 50%-owned affiliate, GS Caltex, using the GS Caltex brand. The Company’s 50%-owned affiliate in Australia, Caltex Australia Limited, operates using the Caltex and Ampol brands. In 2008, the Company completed the sale of its heating-oil business in the United Kingdom. In addition, the Company sold its interest in about 350 individual service-station sites. The majority of these sites will continue to market Company-branded gasoline through new supply agreements. The Company also manages other marketing businesses globally. Chevron markets aviation fuel at more than 1,000 airports. The Company also markets a range of lubricant and coolant products under brand names that include Havoline, Delo, Ursa, Meropa and Taro.

Chevron owns and operates a range of crude oil, refined products, chemicals, natural gas liquids and natural gas pipelines in the United States. The Company also has direct or indirect interests in other United States and international pipelines. Chevron has a 15% interest in the Caspian Pipeline Consortium (CPC) affiliate. CPC operates a crude oil export pipeline from the Tengiz Field in Kazakhstan to the Russian Black Sea port of Novorossiysk. During 2008, CPC transported an average of approximately 675,000 barrels of crude oil per day, including 557,000 barrels per day from Kazakhstan and 118,000 barrels per day from Russia. The Company has a 9% interest in the Baku-Tbilisi-Ceyhan (BTC) affiliate that owns and operates a pipeline that transports primarily the crude oil produced by AIOC from Baku, Azerbaijan, through Georgia to deepwater port facilities in Ceyhan, Turkey. The BTC pipeline has a crude-oil capacity of 1.2 million barrels per day and transports the majority of the AIOC production. Another production export route for crude oil is the Western Route Export Pipeline, wholly owned by AIOC, with capacity to transport 145,000 barrels per day from Baku, Azerbaijan, to the marine terminal at Supsa, Georgia.

Chevron has a 37% interest, in the West African Gas Pipeline Company Limited affiliate, which constructed, owns and operates the 421-mile (678-kilometers) West African Gas Pipeline. In 2008, the Company’s United States flag fleet was engaged primarily in transporting refined products between the Gulf Coast and the East Coast and from California refineries to terminals on the West Coast and in Alaska and Hawaii. One United States-flagged product tanker, capable of carrying 300,000 barrels of cargo, was delivered in 2008. The foreign-flagged vessels were engaged primarily in transporting crude oil from the Middle East, Asia, the Black Sea, Mexico and West Africa to ports in the United States, Europe, Australia and Asia. Refined products were also transported by tanker worldwide. The Company owns an approximate 16% interest in each of seven LNG tankers transporting cargoes for the North West Shelf (NWS) Venture in Australia. The NWS project also has two LNG tankers under long-term time charter. In 2008, the Company sold its two LNG shipbuilding contracts with Samsung Heavy Industries, but retained the option to purchase two new LNG vessels.

Chemicals

Chevron Phillips Chemical Company LLC (CPChem) is equally owned with ConocoPhillips Corporation. At December 31, 2008, CPChem owned or had joint venture interests in 35 manufacturing facilities and five research and technical centers in Belgium, Brazil, China, Colombia, Qatar, Saudi Arabia, Singapore, South Korea and the United States. Americas Styrenics LLC, a 50%-owned joint venture between CPChem and Dow Chemical Company, began commercial operations in 2008. This joint venture combined CPChem’s United States styrene and polystyrene operations with Dow’s United States and Latin America polystyrene operations. Outside the United States, CPChem’s 50%-owned Jubail Chevron Phillips Company began commercial production at its styrene facility at Al Jubail, Saudi Arabia.

CPChem continued construction during 2008 on the 49%-owned Q-Chem II project in Mesaieed, Qatar. The project includes a 350,000-metric-ton-per-year polyethylene plant and a 345,000-metric-ton-per-year normal alpha olefins plant, each utilizing CPChem’s technology, and is located adjacent to the existing Q-Chem I complex. Q-Chem II also includes a separate joint venture to develop a 1.3 million-metric-ton-per-year ethylene cracker at Qatar’s Ras Laffan Industrial City, in which Q-Chem II owns 54% of the capacity rights.

Chevron’s Oronite brand lubricant and fuel additives business is a developer, manufacturer and marketer of performance additives for lubricating oils and fuels. The Company owns and operates facilities in Brazil, France, Japan, the Netherlands, Singapore and the United States and has equity interests in facilities in India and Mexico. Oronite provides additives for lubricating oil in most engine applications, such as passenger car, heavy-duty diesel, marine, locomotive and motorcycle engines, and additives for fuels to improve engine performance and extend engine life. Oronite completed construction and started up the hydrofluoric acid replacement alkylation units in Gonfreville, France, during 2008. Commercial production commenced in January 2009. In Addition, during 2008, the Gonfreville facility began commercial production of sulfur-free detergent components for marine engine applications and low-sulfur components for automotive engine oil applications.

Other Businesses

Chevron’s mining companies in the United States produce and market coal and molybdenum. Sales occur in both United States and international markets. The Company owns and operates two surface coal mines, McKinley, in New Mexico, and Kemmerer, in Wyoming, and one underground coal mine, North River, in Alabama. The Company also owns a 50% interest in Youngs Creek Mining Company LLC, a joint venture to develop a coal mine in northern Wyoming. The Company’s coal sales from wholly owned mines in 2008 were 11 million tons. At December 31, 2008, Chevron controlled approximately 200 million tons of proven and probable coal reserves in the United States, including reserves of low-sulfur coal. The Company is contractually committed to deliver between 8 million and 11 million tons of coal per year through the end of 2010.

Chevron, in addition to the coal operations, owns and operates the Questa molybdenum mine in New Mexico. At December 31, 2008, Chevron controlled approximately 53 million pounds of proven molybdenum reserves at Questa. In 2008, the Company sold the petroleum coke calciner assets of Chicago Carbon Company, a wholly owned subsidiary in Illinois. The Company also sold its lanthanides processing facilities and rare-earth mineral mine in Mountain Pass, California, and its 33% interest in Sumikin Molycorp.

Chevron’s power generation business develops and operates commercial power projects and has interests in 13 power assets through joint ventures in the United States and Asia. The Company manages the production of more than 2,300 megawatts of electricity at 11 facilities it owns through joint ventures. The Company operates gas-fired cogeneration facilities that use waste heat recovery to produce additional electricity or to support industrial thermal hosts. A number of the facilities produce steam for use in upstream operations to facilitate production of heavy oil. The Company has major geothermal operations in Indonesia and the Philippines.