Exploration and Production
Chevron has a concession agreement, which expires in 2039, with Saudi Arabia to operate the kingdom's 50 percent interest in the hydrocarbon resources of the onshore area of the Partitioned Zone (PZ) between Saudi Arabia and Kuwait.
Total PZ oil production reached 3 billion barrels in late 2004, with production from four fields.
During 2011, 76 wells were drilled in the PZ. Development drilling, well maintenance and numerous facility-enhancement programs scheduled for 2012 and 2013 are expected to partially offset declines in overall field production.
In 2009, first steam injection began at the Large-Scale Pilot Steamflood Project for the First Eocene reservoir at the Wafra Field in the onshore PZ. Steamflooding involves injecting steam into heavy oil reservoirs to heat the crude oil underground, reducing its viscosity and allowing its extraction through wells. This project was preceded by steam stimulation of some wells, followed several years later by a small-scale test. The entire development project is designed to determine the technical and economic viability of thermal-recovery projects in the Wafra Field.
The Large-Scale Pilot phase of the project required drilling 16 injection wells, 25 producing wells and 16 observation wells and installing water-treatment and steam-generation and distribution facilities.
The $340 million pilot, which is the third test phase for the steamflood project, is expected to lead to full-field steamflooding of the First Eocene reservoir. This would mark the first commercial application of conventional steamflooding in a carbonate reservoir anywhere in the world.
A carbonate reservoir is an oil or gas trap formed in reefs, dolomite and certain types of limestone. Typically, carbonate reservoirs are highly fractured and not conducive to steamflooding on a large scale. However, the carbonate Eocene reservoirs at Wafra have unusually favorable properties and offer a promising opportunity for steamflooding.
The company is evaluating data gathered from the First Eocene pilot project. In 2011, the pilot project continued injecting steam into one level of the reservoir, and production had increased 600 percent over the production rate before steamflooding. The wells were closed off at their original depth in the reservoir, then reopened at a higher level to resume production in 2012.
In 2011, progress was made applying the steamflood technology into the Second Eocene carbonate reservoir. A decision to begin front-end engineering and design is expected in the second half of 2012.
Development planning also continued on the full-field steamflood application in the Wafra Field. The Wafra Steamflood Stage 1 Project is expected to begin front-end engineering and design in the second half of 2012. Stage 1 is expected to reach maximum total daily production of 80,000 to 100,000 barrels of crude oil, with startup projected for 2017.
Front-end engineering and design began on the Central Gas Utilization Project in 2011. The project is intended to make the use of natural gas more efficient and eliminate continuous natural gas flaring at the Wafra Field. A final investment decision is expected in 2013.
Chemicals
The Saudi Chevron Phillips Company petrochemical plant in Al-Jubail is designed to produce 790,000 metric tons of benzene and 360 metric tons of cyclohexane annually. Benzene is an industrial solvent and precursor in the production of medicines, plastics, synthetic rubber and dyes. Cyclohexane is used in the production of nylon, solvents, paint and varnish remover. Arabian Chevron Phillips Petrochemical Company Limited (ACP), a wholly owned subsidiary of Chevron Phillips Chemical Company LLC (CPChem) and the Saudi Industrial Investment Group are partners in Saudi Chevron Phillips Company.
The plant uses CPChem's Aromax™ catalyst to convert naphtha feedstock. Naphtha is used in making high-octane gasoline.
CPChem's 50 percent-owned Jubail Chevron Phillips Company has a styrene production facility in Al-Jubail. The plant, which began operations in 2008, is one of the world's largest. Styrene is a precursor to polystyrene, which is used to make plastic dinnerware, CD cases, insulation and foam drink cups, among other products.
A third petrochemical project, Saudi Polymers Company, shares facilities on the same site in Al-Jubail. The joint venture, of which ACP owns 35 percent, began construction in 2008; commercial operations are expected to begin in 2012. The project includes one of the world's largest olefins units. Olefins are used to produce polyethylene, polypropylene and polystyrene, which the facility will manufacture. Polyethylene is used in food packaging, bag liners, high-pressure pipe, fuel tanks and shopping bags, among other things. Polypropylene is used in the manufacture of automotive parts, carpeting and food packaging.
CPChem and Saudi Industrial Investment Group share a 50-50 ownership in a fourth project, Petrochemical Conversion Company. The project includes construction of a nylon 6,6 polymer manufacturing facility and a number of polymer conversion projects. Architects often call for nylon 6,6 for use in commercial settings that get a lot of wear and tear, like offices and airports. Plant operations are expected to begin in 2013.
Marketing and Retail
Under contract with Saudi Aramco, Chevron purchases Saudi crude oil for its own refining system and ranks among the kingdom's larger purchasers of crude.
The Chevron AlBakri Lubricants Company markets Caltex® lubricants and specialty products, such as coolant, to the consumer, commercial and industrial sectors in the kingdom. The joint venture is headquartered in Jeddah.
Saudi Aircraft Services, a Chevron joint venture, has plane-fueling operations at Jeddah and sells aviation fuels in Saudi Arabia.
Technology Transfer
In 2011, Chevron and Saudi Aramco signed a five-year collaboration agreement. Under the agreement, Saudi Aramco will have access to technical, operational and managerial consulting, professional development and petroleum engineering development projects. Chevron and Saudi Aramco also will explore joint research and development projects of mutual interest.
Updated: April 2012
Cautionary Statement