Operational Excellence Management System

Chevron uses a project development and execution process along with our engineering standards to consistently incorporate OEMS requirements in the design and construction of all new and modified facilities. We focus our efforts on evaluating and mitigating safety, health, environmental, asset integrity and reliability risks, as well as business and community impacts.

Chevron's process for managing work safety identifies and evaluates job hazards, specifies how to control them and establishes safe behaviors. Supervisors at every level are required to understand their responsibilities and translate those into actions visible to the workforce. We work closely with contractors to help instill safe behaviors and identify and mitigate hazards. Employees and contractors alike are authorized to stop any work that does not comply with the Tenets of Operation without negative repercussions.

Chevron has safe work practices and job safety and hazard analysis tools to set expectations, guide procedures and shape behavior. Supervisors and peers formally observe each others' safety practices in action. We frequently conduct "toolbox talks" and share "safety moments" with co-workers. And if an incident or near miss occurs, we investigate the cause and establish systematic measures to prevent it from happening again throughout our enterprise.

Chevron's change-management processes have been developed to prevent incidents during permanent or temporary changes to facilities, operations, products or the organization. The processes help identify and control hazards associated with change and maintain the accuracy of safety information. Efforts include completing appropriate risk assessments, updating documentation, communicating planned changes and training all impacted personnel.

Chevron has established reliability processes and standards to ensure the integrity and availability of wells and facilities, prevent incidents and optimize our return on investment. Our methods improve the overall performance of assets through reliable operations and regular maintenance and by resolving the root causes of incidents.

Given the world's increasing demand for energy, Chevron recognizes the need to use energy and resources efficiently across our enterprise, whether at our production operations or in the office. We made a long-term commitment to reduce the energy we use in our day-to-day operations. As a result, we have increased the energy efficiency of our global operations. Energy efficiency provides the easiest, cheapest and most reliable source of "new" energy available today. By using energy wisely, we can produce our products more cost-effectively and reduce our impact on the environment.

Chevron also is focused on optimizing our operational processes and improving profitability through efficient use of people, time and assets. We use Lean Sigma, a process-improvement methodology employed in many industries, to eliminate wasteful steps in work and reduce variation through consistent processes. For many of our business units, this process has become a standard approach to implementing continuous improvements throughout the organization.

Chevron strives to systematically improve third-party service performance through alignment with Operational Excellence. Our Contractor Health, Environment and Safety Management processes establish clear accountabilities, ensure engagement and provide consistent programs to eliminate health, environment and safety incidents and injuries among contractors.

Chevron strives to continually improve environmental performance and reduce impacts from our operations. Our environmental stewardship is aligned around four principles:

• Include the environment in decision making. From our everyday actions to major capital investments, we make better decisions when we consider the environment.
• Reduce our environmental footprint. We use our business processes to identify and manage risks to the environment and reduce potential environmental impacts throughout the life of our assets.
• Operate responsibly. We apply our Tenets of Operation, improve reliability and implement process safety to prevent accidental releases, including spills.
• Steward our sites. We work to decommission, remediate and reclaim operating and legacy sites with the aim of beneficial reuse.

Our Environmental, Social and Health Impact Assessment (ESHIA) process, deployed in 2007, requires that all new capital projects be evaluated for potential environmental, social and health impacts. ESHIA is used to anticipate and plan for the avoidance, minimization and mitigation of potentially significant negative impacts, as well as for the enhancement of potential benefits during the planning, construction, operation and decommissioning of our projects. Stakeholder engagement throughout the life of a project is a central piece of the ESHIA process. Since its inception, ESHIA has been applied to nearly 900 capital projects worldwide.