Chevron has extensive oil and gas exploration and production operations around the world. In 2007, we produced 2.6 million barrels per day of oil-equivalent.
Chevron has an exceptionally strong portfolio, with key operations in the world's most important oil and gas regions. We are the largest producer of oil and gas in Kazakhstan and Thailand, and we are the top crude producer in Indonesia. In Australia, Chevron is the largest holder of undeveloped natural gas resources. We are among the largest holders of deepwater acreage in Nigeria and hold the most leases in the combined Shelf and Deepwater Gulf of Mexico.
We are working aggressively to capitalize on recent discoveries. These projects are strategically located in regions with some of the greatest growth potential in the world.
Chevron Partners for Growth in the Caspian
In the Caspian region, the cornerstones of Chevron's growth plans are the Tengiz Sour Gas Injection and Second Generation Plant. At a cost of about $7 billion, these projects are expected to increase gross production capacity from 300,000 barrels of oil equivalent per day to 540,000 barrels per day by the second half of 2008. Chevron holds a 50 percent interest.
Chevron has 10.3 percent interest in the Azerbaijan International Operating Company, which produces and develops offshore crude oil reserves in the Caspian Sea from the Azeri-Chirag-Gunashli project. In 2007, the company had a total average daily production of 664,000 barrels. An expansion project is expected to increase daily production to more than 1 million barrels in 2009. Chevron is also a partner in the Baku-Tbilisi-Ceyhan pipeline, which transports oil from Baku, Azerbaijan, through Georgia to deepwater port facilities at Ceyhan, Turkey, on the Mediterranean Sea.
Asia-Pacific Is Rich With Opportunities
Faced with the challenge of meeting Asia's growing energy needs, Chevron is well positioned in the region. We have a 40-year history of successfully operating Australia's largest onshore crude oil field. We are leading the development of the Gorgon Project – a liquefied natural gas venture based in the Greater Gorgon gas fields off the coast of Northwest Australia.
Gorgon is one of the largest and most complex projects we have ever undertaken. Chevron is the operator and holds a 50 percent ownership interest. In 2007, the company received environmental regulatory approvals for development of the project on Barrow Island from the Western Australian Minister for Environment and the Australian federal government. A three-train, 15 million-metric-ton-per-year initial liquefied natural gas development is planned for the island. Chevron is also a partner in the North West Shelf Venture in Australia, where a fifth liquefied natural gas train is being added in 2008.
Other projects in the Asia Pacific region include the Gulf of Thailand, where Chevron signed an agreement in 2007 to extend the production period of four offshore blocks by 10 years. Construction of a second natural gas processing plant in the Platong area is also planned for Thailand.
In Indonesia, we are expanding the North Duri development, already one of the largest steamflood projects in the world, and we are pursuing large deepwater gas developments. We also are involved in new offshore activities in Vietnam, China's onshore Sichuan Basin, the Bibiyana Field in Bangladesh and two large deepwater gas developments in Indonesia.
Chevron Grows Along With Africa and Latin America
Production from Chevron projects in West Africa and southern Africa continues to ramp up. We expect production to grow significantly by 2013 as our deepwater and liquefied natural gas projects in Angola and Nigeria deliver results. The Benguela Belize–Lobito Tomboco (BBLT) project in Angola began operations in 2006. It is expected to have an average daily production of approximately 200,000 barrels of oil per day by late 2008 or early 2009. At 1,680 feet (512 m), the BBLT drilling and production platform is among the world's tallest man-made structures.
In Nigeria, the Agbami project has completed a number of key construction milestones, including the delivery of one of the world's largest floating production, storage and offloading vessels, which was built in South Korea. First production from Agbami is expected in the second half of 2008, with peak production of approximately 250,000 barrels per day anticipated about a year later.
In Latin America, Chevron has an interest in production projects in western Venezuela as well as in the country's important Orinoco Belt. Chevron also has interest in three offshore exploratory blocks located in the Plataforma Deltana region and western Venezuela.
In Brazil, construction continues on the deepwater Frade project, Chevron's first offshore development in that country. First oil is expected in 2009. Estimated maximum total production of 85,000 barrels of crude oil and 30 million cubic feet of natural gas per day is anticipated in 2011.
Maximizing Mature Resources and Creating New Opportunities
In North America, Chevron continues to arrest the declines from mature reservoirs while moving ahead on developing both our deepwater Gulf of Mexico and onshore mid-continent holdings. These strategies made us the third-largest producer of hydrocarbons in the United States in 2007and a major producer and innovator in Canada.
Chevron's U.S. assets are anchored by mature fields concentrated in the Gulf of Mexico, California, Louisiana, Texas, New Mexico, the Rocky Mountains and Alaska. In the deepwater Gulf of Mexico, we expect to begin production of crude oil and natural gas from the Blind Faith development in 2008. Development of the Tahiti and Perdido projects continues and is expected to meet scheduled first oil dates in 2009 and 2010, respectively. On the North Slope of Alaska, we mobilized resources in 2007 to begin an exploratory drilling program at the White Hills prospect.
In Canada, most of our crude oil production comes from the Hibernia field offshore Newfoundland. Chevron also continues to pursue other opportunities in the seas offshore eastern Canada and in Canada's western Arctic.
Chevron is a partner in the Athabasca Oil Sands expansion project. By 2010,* the project is expected to increase bitumen capacity to more than 255,000 barrels per day.
Attending to the Base Business
Chevron could not reach its production levels without focusing resources on maximizing the potential of mature reservoirs. For example, using new seismic imaging techniques at our McAllen Ranch Field in southern Texas, Chevron geologists were able to better understand complex sedimentary structures. This allowed us to find a significant amount of untapped natural gas. Through additional drilling, we more than doubled production from the field and added significant new reserves.
In another example, through improved waterflood optimization at the Wafra Field in Saudi Arabia's Partitioned Neutral Zone, we were able to reduce a historical decline rate of 15 percent per year to 1 percent.
Chevron plans to continue major initiatives to improve operating efficiencies, reduce base production decline and lower costs.
Updated: March 2008
* The Securities and Exchange Commission's definition of oil and gas reserves does not include reserves extracted through the bitumen-mining process. U.S. investors should refer to disclosures in Chevron's Annual Report on Form 10-K for the year ended December 31, 2007.