ChevronTexaco Corporation

 

Chevron Corp. (Chevron), formerly ChevronTexaco Corporation, incorporated in 1926, manages its investments in subsidiaries and affiliates, and provides administrative, financial, management and technology support to the United States and foreign subsidiaries that engage 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 United States and approximately 180 other countries. 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.

 

Exploration and Production

 

During the year ended December 31, 2006, Chevron conducted exploration and production operations in the United States and approximately 35 other countries. Worldwide oil-equivalent production was approximately 2.67 million barrels per day in 2006. As of December 31, 2006, the Company owned or had under lease or similar agreements undeveloped and developed oil and gas properties located throughout the world. 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 281 billion cubic feet of natural gas through 2009 from United States reserves. Outside the United States, the Company is contractually committed to deliver to third parties a total of approximately 560 billion cubic feet of natural gas from 2007 through 2009 from Australia, Canada, Colombia and the Philippines.

 

The United States upstream activities are concentrated in the Gulf of Mexico, Louisiana, Texas, New Mexico, the Rocky Mountains and California. Average daily net production in 2006, was 462,000 barrels of crude oil and natural gas liquids and 1.8 billion cubic feet of natural gas, or 763,000 barrels per day on an oil-equivalent basis. During 2006, the Company's operations outside California and the Gulf of Mexico averaged daily net production of 141,000 barrels of crude oil and natural gas liquids and one billion cubic feet of natural gas. Chevron Corp., also has exploration and production operations in Africa (Angola, Democratic Republic of the Congo, Republic of the Congo, Angola-Republic of the Congo Joint Development Area, Chad/Cameroon, Libya, Equatorial Guinea and Nigeria); Asia-Pacific (Australia, Azerbaijan, Kazakhstan, Russia, Bangladesh, Cambodia, Myanmar, Thailand, Vietnam, China, Partitioned Neutral Zone (pans) and Philippines); Indonesia; other international areas (Argentina, Brazil, Colombia, Trinidad and Tobago, Venezuela, Canada, Denmark, Faroe Islands, Netherlands, Norway and United Kingdom Mexico), and affiliate operations (Kazakhstan, Venezuela and Russia).

 

Refining, Marketing and Transportation

 

In 2006, the Company's refining system consisted of 20 fuel refineries and an asphalt plant. The Company operated nine of these facilities, and 12 were operated by affiliated companies. Average crude oil distillation capacity utilization during 2006, was 90%. At the United States fuel refineries, crude oil distillation capacity utilization averaged 99% in 2006, and cracking and coking capacity utilization averaged 86% in 2006. Cracking and coking units, including fluid catalytic cracking units, are the primary facilities used in fuel refineries to convert heavier products to gasoline and other light products. In 2006, the Company completed an expansion of the Pascagoula, Mississippi, refinery's fluid catalytic cracking unit to increase its production of gasoline and other light products. Also in 2006, GS Caltex, the company's 50%-owned affiliate, began construction of an upgrade project at the 650,000-barrel-per-day Yeosu refining complex in South Korea. In April 2006, Chevron purchased a 5% interest in Reliance Petroleum Limited, a company formed by Reliance Industries Limited to own and operate an export refinery being constructed in Jamnagar, India. The company's United States West Coast, Gulf Coast and Salt Lake refineries produce low-sulfur fuels.

 

Chevron markets petroleum products throughout much of the world. The principal brands for identifying these products are Chevron, Texaco and Caltex. Approximately 600 of the outlets are company-owned or -leased stations. During 2006, the Company was supplying more than 2,100 Texaco retail sites, primarily in the southeast and west. Outside the United States, Chevron supplies directly or through retailers and marketers approximately 16, 200 branded service stations, including affiliates, in 75 countries. The Company also manages other marketing businesses globally. Chevron markets aviation fuel in approximately 75 countries, representing a worldwide market share of about 12%, and is a marketer of jet fuels in the United States. The Company also markets a line of lubricant and coolant products in about 175 countries under brand names that include Havoline, Delo, Ursa and Revtex.

 

Chevron owns and operates a system 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. In the United States during 2006, the Company completed the sale of three refined-product pipeline systems in Texas and New Mexico, as well as its interest in the Windy Hill natural gas storage project in northeastern Colorado. Chevron also has a 15% ownership interest in the Caspian Pipeline Consortium (CPC). CPC operates a crude oil export pipeline from the Tengiz Field in Kazakhstan to the Russian Black Sea port of Novorossiysk. During 2006, CPC had transported an average of 664,000 barrels of crude oil per day, including 519,000 barrels per day from the Caspian region and 145,000 barrels per day from Russia. In addition, the Company has a 9% equity interest in the Baku-Tbilisi-Ceyhan (BTC) pipeline, which transports Azerbaijan International Operating Company (AIOC) production from Baku, Azerbaijan, through Georgia to deepwater port facilities in Ceyhan, Turkey.

 

During 2006, the Company had approximately 70 vessels chartered on a voyage basis or for a period of less than one year. In addition, all tankers in Chevron's controlled seagoing fleet were utilized during 2006. In 2006, 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. The international flag vessels were engaged primarily in transporting crude oil from the Middle East, Asia, Black Sea, Mexico and West Africa to ports in the United States, Europe, Australia and Asia. Refined products were also transported by tanker worldwide. During 2006, the Company took delivery of two double-hulled tankers with a total capacity of 2.5 million barrels and terminated the lease on its last single-hulled vessel. In addition, the Company owns a one-sixth interest in each of seven liquefied natural gas (LNG) tankers transporting cargoes for the North West Shelf (NWS) project in Australia. The NWS project has two LNG tankers under long-term time charter.

 

Chemicals

 

Chevron Phillips Chemical Company LLC (CPChem) is equally owned with ConocoPhillips Corporation. During 2006, CPChem owns or had joint venture interests in 30 manufacturing facilities and six research and technical centers in the United States, Puerto Rico, Belgium, China, Saudi Arabia, Singapore, South Korea and Qatar. In 2006, construction progressed on CPChem's integrated, world-scale styrene facility in Al Jubail, Saudi Arabia, which is jointly owned with the Saudi Industrial Investment Group (SIIG). The styrene facility is located adjacent to CPChem and SIIG's aromatics complex in Al Jubail. In addition, construction continued on the Q-Chem II project in 2006. The Q-Chem II project includes a 350,000-metric-ton-per-year polyethylene plant and a 345,000-metric-ton-per-year normal alpha olefins plant. The Q-Chem II project 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. CPChem owns a 49% interest in Q-Chem II. Chevron's Oronite brand fuel and lubricant additives business is a developer, manufacturer and marketer of performance additives for fuels and lubricating oils. The Company owns and operates facilities in the United States, Brazil, France, the Netherlands, Singapore and Japan 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, two-cycle and railroad engines, and additives for fuels to improve engine performance and extend engine life.

 

Other Businesses

 

Chevron's mining companies in the United States produce and market coal, molybdenum, rare earth minerals and calcined petroleum coke. Sales occur in both United States and international markets. Chevron's coal mining and marketing subsidiary, The Pittsburg & Midway Coal Mining Co. (P&M), owns and operates two surface mines, McKinley, in New Mexico, and Kemmerer, in Wyoming, and one underground mine, North River, in Alabama. Final reclamation activities were completed at the York Canyon surface mine located in New Mexico, and reclamation activities continued in 2006, at the Farco surface mine in Texas. In 2006, P&M controlled approximately 225 million tons of proven and probable coal reserves in the United States, including reserves of environmentally desirable low-sulfur coal. The Company is contractually committed to deliver between 11 million and 12 million tons of coal per year through the end of 2009.

 

Molycorp Inc. is the Company's mining and marketing subsidiary for molybdenum and rare earth minerals. Molycorp Inc. owns and operates the Questa molybdenum mine in New Mexico and the Mountain Pass lanthanides mine in California. In addition, the company owns a 33% interest in Sumikin Molycorp, a manufacturer of neodymium compounds, located in Japan. In 2006, Molycorp Inc. controlled approximately 60 million pounds of proven molybdenum reserves at Questa and 240 million pounds of proven and probable lanthanide reserves at Mountain Pass. The Company also owns the Chicago Carbon Company, a producer and marketer of calcined petroleum coke, which operates a 250,000-ton-per-year petroleum coke calciner facility in Lemont, Illinois.

 

Chevron's global power generation (GPG) business is engaged in developing and operating commercial power projects and owns 15 power assets located in the United States and Asia. GPG manages the production of more than 2,334 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 geothermal operations in Indonesia and the Philippines. In September 2006, the company sold its interest in the 8-megawatt Amada Rayong power generation facility in Thailand.

Chevron Energy Solutions (CES) is a wholly owned subsidiary that has energy-saving projects installed in more than a thousand buildings nationwide. Major projects completed by CES in 2006, include energy efficiency and renewable power installations for United States Postal Service facilities, the first megawatt-class hydrogen fuel cell cogeneration plant in California, and cogeneration and biomass facilities for a municipal water pollution control plant.