Exploration and Production
Chevron has interests in four operated and four nonoperated production-sharing contracts in China. In 2012, net average daily production was 20,000 barrels of crude oil and condensate and 9 million cubic feet of natural gas.
Major Development at Chuandongbei
Chevron operates the 487,000-acre (1,969 sq km) Chuandongbei natural gas area in the onshore Sichuan Basin. We have a 49 percent interest in the project. At an estimated cost of $6.4 billion, Chuandongbei is one of the larger capital projects Chevron is developing in 2013. Plans call for two sour-gas processing plants with a combined capacity of 740 million cubic feet per day connected to five natural gas fields. Sour gas is natural gas containing hydrogen sulfide. It typically is processed into gas that meets customer specifications, natural gas liquids and elemental sulfur. Elemental sulfur can be used in fertilizer and other products.
The first natural gas processing plant—designed for a maximum total production of 258 million cubic feet per day—is expected to be mechanically complete at the end of 2013. In 2012, site preparation began on the second plant, which is designed for a maximum total daily natural gas production of 558 million cubic feet.
We plan on starting an exploration well at Chuandongbei in the third quarter of 2013.
Working in the South China Sea
Chevron has a 59.2 percent-owned and operated interest in deepwater Block 42/05 in the South China Sea, which covers an exploration area of approximately 1.3 million acres (5,271 sq km).
In 2012, Chevron acquired and agreed to operate the shallow-water Blocks 15/10 and 15/28, which cover approximately 1.4 million acres (5,782 sq km). Government approval is expected in the first half of 2013. We plan to begin a 3-D seismic survey in these blocks in mid-2013.
Chevron also has a 32.7 percent nonoperated working interest in offshore Blocks 16/08 and 16/19 in the Pearl River Mouth Basin of the South China Sea.
Chevron works in the Pearl River Mouth Basin area of the South China Sea with China National Offshore Oil Corp. (CNOOC) and Eni, in the CNOOC/Agip/Chevron/Texaco (CACT) Operators Group (a consortium of CNOOC, Agip and Chevron).
Strong Partnerships in Bohai Bay
In Bohai Bay, the company holds a 16.2 percent interest in Block 11/19, which is operated by CNOOC. Replacement of a floating production, storage and offloading vessel is expected to be completed in the third quarter of 2013.
Also in Bohai Bay, Chevron has a 24.5 percent working interest in the QHD 32-6 oil field, which was the first CNOOC-operated development involving foreign participation. First production is expected in late 2013 from a project that includes four platforms and new facilities to further develop field resources. Maximum total daily production is expected to be 36,000 barrels of crude oil.
Natural Gas from Shale
In 2011, Chevron signed a joint study agreement to explore for natural gas from shale in the Qiannan Basin. We drilled an exploratory well in 2012. Results of that effort are being studied in early 2013 and more drilling is planned.
Marketing and Retail
There are about 70 Caltex® service stations in China, including in the Hong Kong and Macau Special Administrative regions. We have expanded our network of retail outlets, mainly in Guangdong Province. The stations, operated by Caltex South China Investment Ltd., are equipped with retail convenience stores.
Our Caltex lubricants business has sales, marketing, manufacturing and distribution operations throughout the country, including in Beijing, Shanghai, Guangzhou, Chengdu, Tianjin and Hong Kong. We also sell and distribute our products in central China through a joint venture in Shanghai.
Caltex Havoline® and Delo® engine oils and coolants are among the best-selling lubricants and specialty products in their class and are widely used by automotive and original equipment manufacturers.
Chevron Global Aviation is one of the major jet fuel suppliers at Hong Kong International Airport. We also sell jet fuel to airlines that use Macau International Airport.
Chevron Phillips Chemical Company LLC (CPChem) is 50 percent owned by Chevron. Through its affiliates, CPChem operates a polystyrene plant in Zhangjiagang that is capable of producing 100,000 metric tons per year of polystyrene, used for plastic consumer products.
CPChem also has a 40 percent interest in Shanghai Golden Phillips Petrochemical Company Ltd., a high-density polyethylene (HDPE) plant in Jinshanwei, near Shanghai. HDPE is used in food and beverage containers, plastic pipe, merchandise bags, and milk jugs, among other things.
In addition, CPChem sells styrene monomer, 1-hexene, specialty chemicals, Ryton and K-Resin. Styrene monomer is a raw material used to make packaging, automotive parts, electronics, carpeting and other products. The organic compound 1-hexene is used to make HDPE and other chemicals. Ryton is a synthetic fiber used in well-drilling cables. K-Resin is a plastic made into packaging, toys, medical components and other products.
Through our subsidiary, Chevron Oronite (Beijing) International Trading Co., Ltd., Chevron Oronite maintains an office in Beijing to handle the sale of lubricants and fuel additives to national and international oil companies as well as to local lubricants blenders. The company provides products for marine, automotive, industrial and specialty uses.
Updated: April 2013