Exploration and Production
Through our subsidiary Saudi Arabian Chevron Inc., the company has an agreement 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. The agreement was extended and amended in 2009; it now expires in 2039.
Total onshore PZ oil production reached 3 billion barrels in late 2004, with production from four fields.
During 2012, more than 80 wells were drilled in the onshore PZ. Development drilling, well maintenance and numerous facility-enhancement programs that began in 2012 are scheduled to continue in 2013 and are expected to partially offset declines in overall production from the Humma, South Fuwaris, South Umm Gudair and Wafra fields.
In 2009, steam injection began at the Large-Scale Pilot Steamflood Project for the carbonate First Eocene reservoir at the Wafra Field. Steamflooding involves injecting steam into heavy oil reservoirs to heat the crude oil underground, which reduces its viscosity and allows 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 Eocene reservoirs of 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 facilities for water treatment, steam generation and distribution.
In 2012, work on the Large Scale Pilot Project for the Second Eocene carbonate reservoir continued. The project is expected to enter front-end engineering and design by late 2013. This site has been prepared and test wells have been drilled.
Development planning also continued on a full-field steamflood application in the Wafra Field. Design work for the first area of the Wafra Steamflood Project is expected to begin front-end engineering and design work in 2014. This area is expected to reach maximum total daily production of 80,000 barrels of crude oil. 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 favorable properties that offer a promising opportunity for steamflooding.
Front-end engineering and design continued on the Central Gas Utilization Project in 2012. The project is intended to make the use of natural gas more efficient and eliminate natural gas flaring at the onshore PZ fields. A final investment decision is expected in 2014.
Chemicals
The Saudi Chevron Phillips Company petrochemical plant in Al-Jubail is designed to produce 845,000 metric tons of benzene and 360,000 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 began in October 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, 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 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. The agreement allows Chevron and Saudi Aramco to explore research and develop projects of mutual interest. The agreement also facilitates 12- to 18-month professional development assignments for Saudi technical workers at Chevron's wholly owned facilities.
Chevron Lummus Global LLC, a joint venture, has licensed ISOCRACKING® technology to Saudi Aramco's Yanbu and Jazan refineries. Chevron Lummus Global has licensed its ISOCRACKING® and ISODEWAXING® technologies for manufacturing lube base oils to Luberef's refinery in Yanbu.
Updated: April 2013
Cautionary Statement