Category Archives: Chevron Corporation

Chevron Corporation – History

Chevron Corporation was established in 1879 in Los Angeles, California as the Pacific Coast Oil Company.

In 1900, Standard Oil Trust acquired Chevron. After the US Supreme Court dissolved Standard Oil, the Standard Oil Company of California was formed as an autonomous entity with its own oil fields, pipelines, tankers, refineries, and markets.

In the 1920s and 1930s, the company began investing in international exploration and made the first discoveries of oil in Bahrain and Saudi Arabia. In 1936, the company entered into new markets in Asia, Africa, and Europe with the formation of Caltex in partnership with Texaco.

After the 1940s, continued expansion led to discoveries in Indonesia, Australia, the UK North Sea, and the Gulf of Mexico. Subsidiaries and affiliates were later formed in Libya, Nigeria, Spain, Indonesia, and elsewhere. In 1961, the company purchased the Standard Oil Company (Kentucky).

The company doubled in size in 1984 following the merger with Gulf Oil Corp.That same year, Standard changed its name to Chevron, the brand name of many of its products. In 1993, Chevron formed a joint venture with the Republic of Kazakhstan, forming Tengizchevroil to develop the Tengiz oil field.

In 2001, Chevron and Texaco merged to form ChevronTexaco. In 2002, ChevronTexaco divested its stakes in US downstream joint ventures Equilon (to Shell) and Motiva (to Shell and Saudi Aramco). It also sold part of a Gulf of Mexico pipeline and two natural gas plants in Louisiana to Duke Energy, and its 12.5% stake in a natural gas liquid fractionator to Enterprise Products Partners.

ChevronTexaco sold its indirect, wholly-owned affiliate Chevron Niugini and all of its assets in Papua New Guinea to Oil Search, in 2003. It also gained the exploration and production rights to offshore Block 9A in the Gulf of Thailand, created by the Royal Thai Government. ChevronTexaco Global Gas was also formed that year.

Further in 2003, the company sold its upstream assets in Bangladesh and its subsidiary
Chevron International Bangladesh (CIBL) to Niko Resources. Chevron Energy Solutions, a ChevronTexaco subsidiary, acquired the non-federal business of Viron Energy Services (Viron), an energy engineering firm specializing in performance contracting in the US, also in 2003.

ChevronTexaco along with joint-venture partners ExxonMobil Canada and Imperial Oil Resources acquired the exploration rights for eight deepwater parcels, resulting in a significant acreage position in the Orphan Basin region offshore of Newfoundland, towards the end of 2003.

In 2004, ChevronTexaco agreed to sell a number of natural gas and oil fields to XTO Energy. In the same year, its wholly owned subsidiary in the Democratic Republic of Congo, Muanda International

Oil, was sold to a subsidiary of Perenco. In addition, the company also sold Singapore Syngas to Linde, in 2004.

In 2005, the company reached an agreement for the sale of approximately 118 Texaco-owned service stations in the UK to Somerfield, a grocery retailer. In the same year, Chevron Petroleum and Chevron Global Energy completed an agreement with Peruana de Combustibles to sell their fuels marketing business including company-owned Texaco service stations in Peru.

Further in 2005, ChevronTexaco changed its name to Chevron Corporation (Chevron). In the same year, the company completed its merger with Unocal Corporation and increased its equity ownership in Bridgeline Holdings to 100% by acquiring the remaining 40% stake from an affiliate of Targa Resources.

The company enhanced its reserves position by making new discoveries at Big Foot and Knotty Head in the US Gulf of Mexico and at Manatee offshore Trinidad and Tobago, also in 2005. In Angola, the company commenced the Benguela Belize-Lobito Tomboco deepwater project, in the same year. It also began construction of production facilities for the Tahiti (US) and Agbami (Nigeria) deepwater projects, as well as the Escravos gas-to-liquids plant in Nigeria.

Further in 2005, Chevron increased the processing capacity at the Sabine Pass LNG terminal to 1 billion cubic feet per day. In the third quarter of 2005, the company filed an application with the Federal Energy Regulatory Commission to own, construct, and operate a natural gas import terminal at Casotte Landing in Jackson County, Mississippi.The company reached agreements with Japanese utility companies for future sales of liquefied natural gas (LNG) from the Gorgon project in Australia into Japan, also in 2005.

In South Korea Chevron commenced a major upgrade of the Yeosu Refinery to enable heavy oil processing, also in 2005. In Canada, the company sold its production operations, and in the United Arab Emirates, the company sold its 40% interest in the Emirates Petroleum Products Company joint venture, further in 2005.

In 2006, Chevron purchased 122 retail stations in California, from USA Petroleum Corporation. In the same year, Chevron’s Canadian arm decided to participate in the first phase of expansion of the Athabasca Oil Sands Project. Further in 2006, Chevron collaborated with the US Department of Energy’s (DOE) National Renewable Energy Laboratory (NREL) to develop renewable transportation fuels. Chevron Energy Solutions completed the largest solar power and energy-efficiency project for the United States Postal Service (USPS) at its mail center in Northern California, also in 2006.

Texaco Nederland, an indirect wholly-owned subsidiary of Chevron signed an agreement to sell its Netherlands manufacturing business and other assets to B P, in March 2007. Chevron and Weyerhaeuser Company signed a letter of intent (LOI) to jointly assess the feasibility of commercializing the production of biofuels from cellulose-based sources, in April 2007.

The company and Texas A&M Agriculture and Engineering BioEnergy Alliance entered into a strategic research agreement to accelerate the production and conversion of crops for manufacturing ethanol and other biofuels from cellulose, in May 2007.

Further in May 2007, the company’s affiliate Chevron Trinidad and Tobago Resources and partner BG Group entered into a gas sales agreement with the National Gas Company of Trinidad and Tobago (NGC) for the supply of 220 million standard cubic feet of natural gas per day for a term of 11 years, with an option to extend for another four years. In the same month, Chevron Petroleum, an affiliate of Chevron, and Ecopetrol signed with PDVSA Gas a sales contract to start delivering natural gas from Colombia to Venezuela.

Chevron Latin America Marketing and Chevron Amazonas, both indirect, wholly- owned subsidiaries of Chevron, signed an agreement with DUCSA, a state-owned petroleum marketing and distribution company, to purchase the Chevron fuels marketing business in Uruguay, in June 2007.

The company formed a research alliance with The University of Texas at Austin to develop new technologies to increase the amount of oil recovered from mature and challenging reservoirs, in July 2007. In the same month, the company’s subsidiaries Chevron US and Chevron Credit Bank reached agreements to sell their respective proprietary credit card businesses to General Electronics Money Bank.

In August 2007, the company’s subsidiaries in Belgium, the Netherlands, and Luxembourg (Benelux) sold their fuels marketing business to Dutch company Delek Benelux, a subsidiary of Israeli company Delek Group. Chevron announced an energy research program with Massachusetts Institute of Technology (MIT), the Chevron Remote and Ultra-Deepwater Research Program, to develop remote, ultra-deepwater exploration, and production technology, in November 2007.

In the following month, Chevron Global Marketing launched its new retail web site, ChevronwithTechron.com. Chevron Thailand Exploration and Production and its co-concessionaires signed a Gas Sales Agreement (GSA) with PTT Public Company (PTT) for blocks 10-13 in the Gulf of Thailand, also in December 2007. The agreement was expected to boost natural gas supplies from these blocks by 500 million cubic feet of natural gas per day. In the same month, Chevron’s main Chinese subsidiary signed a 30-year production-sharing contract with China National Petroleum Corporation (CNPC) for the joint development of the Chuandongbei natural gas area in central China.

In February 2008, Chevron formed a 50-50 joint venture company with Weyerhaeuser Company to develop the next generation of renewable transportation fuels from nonfood sources. The joint venture, Catchlight Energy, would research and develop technology for converting cellulose-based biomass into economical, low-carbon biofuels. In the following month, Chevron Australia announced its plans to develop a new Australian liquefied natural gas (LNG) project with an initial capacity of at least one 5 million-ton-per-annum LNG production.

Chevron Corporation – Business Description

Chevron Corporation (Chevron) engages in fully integrated petroleum operations, chemicals operations, mining operations of coal and other minerals, power generation, and energy services. The company conducts business activities in the US and approximately 180 other countries.

Chevron operates through four business divisions: upstream, downstream, chemicals, and all others.
Chevron’s upstream business explores for and produces crude oil and natural gas. The company’s exploration and production operations also market natural gas. Chevron’s worldwide net oil-equivalent production was approximately 2.62 million barrels per day in 2007.

At the end of 2007, Chevron’s worldwide net proved crude oil and natural gas reserves for consolidated operations were 7.9 billion barrels of oil-equivalent and for affiliated operations were 2.9 billion barrels. Net oil-equivalent production averaged 2.62 million barrels per day, including volumes produced from oil sands in Canada. Major producing areas include Angola, Australia, Azerbaijan, Bangladesh, Denmark, Indonesia, Kazakhstan, Nigeria, the Partitioned Neutral Zone between Kuwait and Saudi Arabia, Thailand, the UK, the US, and Venezuela. Major exploration areas include western Africa, Australia, Brazil, Canada, the Gulf of Thailand, the Norwegian Barents Sea, the international waters between Trinidad and Tobago and Venezuela, the UK Atlantic Margin, and the U.S. Gulf of Mexico.

Chevron’s downstream comprises refining, fuels and lubricants marketing, supply and trading, and transportation. The refining, marketing, and transportation operations transport crude oil, natural gas, and petroleum products by pipeline, marine vessel, motor equipment, and rail car. It is a global and diverse organization with interests in 19 fuel refineries and an asphalt plant.

In 2007, Chevron processed approximately 1.8 million barrels of crude oil per day and averaged approximately 3.5 million barrels per day of refined product sales worldwide. Downstream’s most significant areas of operations are sub-Saharan Africa, Southeast Asia, South Korea, the UK, the US Gulf Coast extending into Latin America, and the US West Coast.

Chevron markets petroleum products under three brands: Chevron, Texaco, and Caltex.The company also manufactures gasoline additive under the brand name Techron.

The company supplies its products directly or through retailers and marketers to almost 9,700 branded motor vehicle retail outlets, concentrated in the mid-Atlantic, southern, and western states of the US. Approximately 550 of the outlets are company-owned or leased stations. Outside the US, Chevron supplies directly or through retailers and marketers to approximately 15,400 branded service stations, including affiliates.

The company is also engaged in other global marketing businesses. Chevron markets aviation fuel at more than 1,000 airports and has a worldwide market share of about 11%. The company is a leading marketer of jet fuels in the US.The company also markets an extensive line of lubricant and coolant products under brand names that include Havoline, Delo, Ursa, Meropa, and Taro.

Chemicals operations include the manufacture and marketing of commodity petrochemicals for industrial applications, and fuel and lubricating oil additives. Chevron operates in the chemicals segment via its 50%-owned affiliate Chevron Phillips Chemical Company (CPChem) and the wholly-owned Chevron Oronite Company (Chevron Oronite).

CPChem has operations in the US, Puerto Rico, Singapore, China, South Korea, Saudi Arabia, Qatar, Mexico, and Belgium. Chevron Oronite is a fuel and lubricating-oil additives business that owns and operates facilities in the US, France, the Netherlands, Singapore, Japan, and Brazil and has equity interests in facilities in India and Mexico.

The all others segment includes Chevron’s mining operations, power generation businesses, worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities, alternative fuels, and technology companies.

Chevron’s mining operations in the US produce and market coal, molybdenum, rare earth minerals, and calcined petroleum coke in both the US and international markets. The company’s coal mining and marketing subsidiary, Chevron Mining (CMI), owns and operates two surface coal mines, McKinley, in New Mexico, and Kemmerer, in Wyoming, and one underground coal mine, North River, in Alabama. CMI controls approximately 214 million tons of proven and probable coal reserves in the US, including reserves of environmentally desirable low-sulfur coal.

Chevron’s power generation business develops and operates commercial power projects. It owns 15 power assets located in the US and Asia. The company produces over 2,334 megawatts (MW) of electricity at 11 facilities it owns through joint ventures.

Chevron Corporation – Key Facts

Head Office

Chevron Corporation

6001 Bollinger Canyon Road

San Ramon

California 94583

USA

Phone

1 925 842 1000

Fax

1 925 842 3530

Web Address

http://www.chevron.com

Revenue / turnover (USD Mn)

220,904.0

Financial Year End

December

Employees

59,162

New York Stock Exchange Ticker

CVX

Chevron Corporation – Company View

A statement by David J. O’Reilly, Chairman and Chief Executive Officer of Chevron Corporation, is given below. The statement has been taken from the company’s 2007 annual report.

To Our Stockholders
2007 was a year of significant achievement for our company. We reported record earnings, led our peer group in total stockholder return and advanced our robust queue of major capital projects, which are creating a strong foundation for long-term growth. Most important, the people of Chevron performed superbly, demonstrating the values and ingenuity that distinguish our company.

Net income of $18.7 billion represented a fourth consecutive year of record earnings. Capital and exploratory expenditures for the year were $20 billion, and return on capital employed was 23.1 percent. We increased the annual dividend for the 20th consecutive year and achieved a total stockholder return of 30.5 percent, approximately 25 percentage points higher than the return delivered by the S&P 500. We continued to return cash to our stockholders through stock buyback programs, purchasing $7 billion of our common shares during 2007. In September, we initiated a new program to acquire up to $15 billion of our common shares over a period of up to three years. We are committed to the capital discipline necessary to create sustainable, long-term value for our stockholders.

Achieving Milestones

In the upstream, we executed our strategy of managing our base business profitably while advancing new projects for future growth and returns. Our base business, which is our daily crude oil and natural gas production activities around the world, generates the cash to fund our long-term growth. We manage these assets with a strong focus on world-class reservoir management, improved recovery rates and continual innovation. Nowhere is this more evident than in California’s San Joaquin Valley, where the Kern River Field celebrated its 2 billionth barrel of production in late 2007. Kern River began production in 1899 and through the consistent application of innovative technology continues to be a world-class asset.

Our exploration program, which is centered on high-impact prospects in key basins, had a highly successful year. We posted a 41 percent success rate, adding approximately 1 billion barrels of potentially recoverable oil and natural gas resources.

Major capital projects in the upstream reached several milestones. The Agbami floating production, storage and offloading vessel was completed and was positioned in the deep water off Nigeria in early 2008. In 2007, the Bibiyana gas field in Bangladesh began production, and we launched commercial production from the 110-megawatt Darajat III geothermal plant in Indonesia.

Chevron’s track record as a successful partner helped us achieve a 10-year extension for producing natural gas in the Gulf of Thailand, which will help realize our goal of increasing production from this area to more than 1 billion cubic feet per day. Our expertise in producing sour gas at the Tengizchevroil project in Kazakhstan was a key factor in our selection as a partner by the China National Petroleum Corporation for the development of the Chuandongbei natural gas area in central China.

Our global downstream operations continue to focus on increasing refinery flexibility, improving reliability and creating new business opportunities. We completed projects to increase the flexibility and capacity of two major refineries — in El Segundo, California, and at our 50 percent-owned Yeosu refinery complex in South Korea. The downstream business also enhanced its focus on profitable growth through the divestiture of several nonstrategic assets. Our 2007 safety performance showed significant improvement, but we will never be satisfied until we have reduced the number of safety-related incidents to zero. We are absolutely committed to achieving this goal.
Enhancing Technology and Capability

In the current business environment, companies with superior ability to source and deploy technology will build a sustainable competitive advantage.

Our technology strategies are centered on delivering superior performance in our core businesses and establishing leading positions in emerging and transformational technologies. To that end, we opened two new Global Technology Centers — in Aberdeen, Scotland, and Perth, Australia — to expand our research and development capability. In addition, we created a number of strategic alliances with universities to conduct advanced research into new energy sources and processes.

To build upon our organizational capability, in 2007 we restructured the upstream business into four operating companies — North America; Asia- Pacific; Africa and Latin America; and Eurasia, Europe and Middle East. This new structure will strengthen our focus on long-term growth, enhance business partnerships, and drive more efficiency, standardization and collaboration across the organization.

Human Energy and Ingenuity

In 2007, we launched a new global advertising campaign, “The Power of Human Energy.” It focuses on the realities of energy today — the challenge of meeting rising demand as the global economy expands, together with the imperative to manage the impact of energy consumption on the environment. These are huge challenges. But as the campaign makes clear, human ingenuity will discover solutions as it has throughout history. The people of Chevron are working every day to apply the kind of ingenuity that will create responsible, practical and sustainable solutions to these challenges.

Thank you for investing in our company. We look forward to another year of achievement as we continue to create value for our stockholders while working to meet the world’s growing demand for safe, reliable energy.

Chevron Corporation – Locations And Subsidiaries

Head Office

Chevron Corporation
6001 Bollinger Canyon Road
San Ramon
California 94583
USA
P:1 925 842 1000
F:1 925 842 3530
http://www.chevron.com

Other Locations and Subsidiaries

Chevron Australia Pty Ltd.

QV1 Building

250 St. Georges Terrace

Perth

Western Australia 6000

AUS

Chevron Belgium N.V. Technologiepark Zwijnaarde 2 B-9052 Gent BEL

Chevron Colombia

Calle 100

7A-81

Bogota

COL

Chevron India

Level 16

Eros Corporate Towers

Nehru Place

New Delhi

India 110 019

IND

Chevron Exploration and Production

Netherlands B.V.

Chevron Transportation B.V.

Appelgaarde 4

2272 TK Voorburg

NLD

Chevron Neftegaz, Inc.

Rakhmanovsky pereulok 4

Moscow

Russian Federation 127051

RUS

Chevron (S.A.) (Pty) Ltd. Chevron House 19 D F Malan Street Cape Town South Africa 8001 ZAF

Chevron Latin America

Avenida La Estancia

Centro Banaven (Cubo Negro)

Torre D Piso 7

Chuao

Caracas

VEN