• Financial Highlights
• Management's Discussion and Analysis
  • Key Financial Results
  • Income by Major Operating Area
  • Business Environment and Outlook
  • Operating Developments
  • Results of Operations
  • Consolidated Statement of Income
  • Selected Operating Data
  • Liquidity and Capital Resources
  • Financial Ratios
  • Guarantees, Off-Balance-Sheet Arrangements and Contractual Obligations, and Other Contingencies
  • Financial and Derivative Instruments
  • Transactions with Related Parties
  • Litigation and Other Contingencies
  • Environmental Matters
  • Critical Accounting Estimates and Assumptions
  • New Accounting Standards
• Consolidated Financial Statements
• Notes to the Consolidated Financial Statements
• Five-Year Operating Summary
• Five-Year Financial Summary
• Supplemental Information on Oil and Gas Producing Activities

Operating Developments

Key operating developments and other events during 2007 and early 2008 included the following:

Upstream

Angola

Discovered crude oil at the 31 percent-owned and operated Malange-1 well in offshore Block 14. Additional drilling and geologic and engineering studies are planned to appraise the discovery. The company and partners also made the final investment decision to construct a liquefied natural gas (LNG) plant that will be owned 36 percent by Chevron. The plant will be designed with a capacity to process 1 billion cubic feet of natural gas per day and produce 5.2 million metric tons a year of LNG and related gas liquids products.

Australia

Received federal and state environmental approvals for development of the 50 percent-owned and operated Gorgon LNG project located off the northwest coast. The approvals represented a significant milestone toward the development of the company's natural gas resources offshore Australia.

Bangladesh

Began production at the 98 percent-owned Bibiyana natural gas field. The field's total production is expected to increase to a maximum of 500 million cubic feet per day by 2010.

China

Signed a 30-year production-sharing contract with China National Petroleum Corporation to assume operatorship and hold a 49 percent interest in the development of the Chuandongbei natural gas area in central China. Design input capacity of the proposed gas plants is expected to be 740 million cubic feet of natural gas per day.

Indonesia

Began commercial operation of the 110-megawatt Darajat III geothermal power plant in Garut, West Java. The plant increased Darajat's total capacity to 259 megawatts.

Kazakhstan

Initiated production from the first phase of the Sour Gas Injection and Second Generation Plant expansion projects at the 50 percent-owned Tengiz Field. This phase increased production capacity by 90,000 barrels of crude oil per day to approximately 400,000. Full facility expansion is expected to occur during the second-half 2008, increasing production capacity to 540,000 barrels per day.

Republic of the Congo

Confirmed two crude oil discoveries in the offshore Moho-Bilondo permit. Evaluation and development studies were undertaken to appraise the discoveries, in which Chevron holds a 32 percent nonoperated working interest.

Thailand

Signed an agreement to increase sales of natural gas from company-operated Blocks 10, 11, 12 and 13 in the Gulf of Thailand to PTT Public Company Limited. Chevron has ownership interests ranging from 60 percent to 80 percent in the blocks, which received 10-year production-period extensions to 2022. The company was also granted the concession rights for a six-year period to four prospective offshore petroleum blocks, three of which it will operate.

Trinidad and Tobago

Signed an agreement to sell natural gas to the National Gas Company of Trinidad and Tobago for 11 years with an option for a four-year extension. The gas is expected to be sourced from Chevron's 50 percent-owned East Coast Marine Area.

United States

Announced that first production from the Tahiti project in the deepwater Gulf of Mexico is expected by the third quarter 2009. The startup is approximately one year later than originally planned due to metallurgical problems with the mooring shackles for the floating production facility.

Downstream

Benelux Countries

Sold the company's 31 percent interest in the Nerefco Refinery and related assets in the Netherlands, and the company's fuels marketing businesses in Belgium, Luxembourg and the Netherlands, resulting in gains totaling $960 million.

South Korea

Completed construction and commissioned new facilities associated with a $1.5 billion upgrade at the 50 percent-owned GS Caltex Yeosu Refinery, enabling the refinery to process heavier and higher-sulfur crude oils and increase the production of gasoline, diesel and other light products.

United States

Approved plans at the company’s refinery in Pascagoula, Mississippi, for the construction of a Continuous Catalyst Regeneration unit, which is expected to increase gasoline production by 10 percent, or 600,000 gallons per day, by mid-2010. At the refinery in El Segundo, California, modifications were completed to enable the processing of heavier crude oils into light transportation fuels and other refined products.

Other

Common Stock Dividends

Increased the company's quarterly common stock dividend by 11.5 percent in April to $0.58 per share, marking the 20th consecutive year the company has increased its annual dividend payment.

Common Stock Repurchase Program

Approved a program in September to acquire up to $15 billion of the company's common stock over a period of up to three years, which followed three stock repurchase programs of $5 billion each that were completed in 2005, 2006 and September 2007.

Dynegy

Sold the company's common stock investment in Dynegy Inc., resulting in a gain of $680 million.