Exploration and Production
Chevron has a 30-year operating agreement, which expires in 2039, with the Kingdom of Saudi Arabia to operate the kingdom's 50 percent interest in the hydrocarbon resources of the onshore area of the onshore Partitioned Neutral Zone (PNZ). Chevron pays a royalty and other taxes on that production. Set to expire in 2009, the concession was renewed in 2008.
Total PNZ oil production reached 3 billion barrels in late 2004, with production from four fields.
During 2008, 87 wells were drilled, bringing the year-end number of active wells to 976.
Development drilling, well workovers and numerous facility-enhancement programs scheduled for 2009 through 2010 are expected to partially offset overall field decline.
In June 2009, Chevron achieved the first steam injection at its Large Scale Pilot steamflood project at the Wafra Field in the onshore PNZ. The project is designed to determine the technical and economic viability of thermal-recovery projects in the Eocene heavy-oil carbonate reservoir.
Steamflooding involves injecting steam into heavy oil reservoirs to heat the crude oil underground, reducing its viscosity and allowing its extraction through wells. This phase of the project involves 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 final test phase for the steamflood project, is expected to lead to full-field steamflooding of the First Eocene reservoir, marking the first commercial application of a conventional steamflood in a carbonate reservoir anywhere in the world.
Marketing and Retail
The Saudi Chevron Phillips petrochemical plant at Al Jubail is designed to produce 1.1 billion pounds of benzene and 525 million pounds of cyclohexane. 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.
The plant uses Chevron Phillips Chemical Co. LLC's (CPChem) proprietary Aromax® process to convert naphtha feedstock. Naphtha is used in making high-octane gasoline. In October 2008, CPChem's 50 percent-owned Jubail Chevron Phillips Company opened a new styrene production facility at Al Jubail, Saudi Arabia. The plant 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, to be operated by one of our joint ventures, is located next to the first two facilities in Al Jubail. Construction began in January 2008. The project includes one of the world's largest olefins units, plus downstream units to produce polyethylene, polypropylene and polystyrene. Completion is expected in 2011. Polyethylene is used to make shopping bags. Polypropylene is used in the manufacture of shrink wrap, containers and textiles.
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-branded lubricants and specialty products such as coolants to the consumer, commercial and industrial sectors in the kingdom. The joint venture is headquartered in Jeddah, Saudi Arabia.
Saudi Aircraft Services, a Chevron joint venture, has into-plane fueling operations at Jeddah and sells aviation fuels in Saudi Arabia.
Updated: July 2009