Exploration and Production
Using the latest technology, Chevron continues to make major discoveries in the United States while maintaining strong production in mature fields.
Chevron is one of the largest hydrocarbon producers in the United States. In 2014, we produced an average of 664,000 barrels of net oil-equivalent per day, or 26 percent of the corporation's worldwide total.
Our company's major operations in the United States are in California, the Gulf of Mexico, Colorado, Louisiana, Michigan, New Mexico, Ohio, Oklahoma, Pennsylvania, Texas, West Virginia and Wyoming.
At the end of 2014, Chevron was the largest leaseholder in the Gulf of Mexico.
Gulf of Mexico Shelf
Chevron is the largest producer of crude oil and natural gas on the Gulf of Mexico shelf. Daily net production during 2014 averaged 51,000 barrels of crude oil, 253 million cubic feet of natural gas and 7,000 barrels of natural gas liquids (NGLs).
In 2014, we drilled 37 development and delineation wells, which help map oil and natural gas formations in the earth. Chevron continued examining the Lineham Creek well results and the Ultra Deep Gas trend, which has subsurface targets below 25,000 feet (7,620 m).
Deepwater Gulf of Mexico
Chevron is one of the leading leaseholders in the deepwater Gulf of Mexico, with a long history of technical achievement and operational safety.
Average net daily production in 2014 was 82,000 barrels of crude oil, 67 million cubic feet of natural gas and 8,000 barrels of NGLs, primarily from the Tahiti, Blind Faith and Caesar/Tonga fields and the Perdido Regional Development. We had five drillships in the deepwater Gulf of Mexico.
Marine Well Containment Company LLC, a nonprofit company sponsored by Chevron and other major energy companies, continued work on an expanded containment system designed to increase capacity, expand compatibility with a wider range of well designs, increase flow rates, and improve environmental conditions. The expansion includes two marine capture vessels that arrived in the Gulf of Mexico in 2013 and early 2014. A system integration test was successfully conducted on the vessels in July and October 2014. The expanded containment system became available in the first quarter of 2015.
The Jack and St. Malo fields in the Walker Ridge area began production in December 2014. The two fields, which are in a water depth of 7,000 feet (2,134 m), are being jointly developed with a host floating production unit between the two fields. Chevron has a 50 percent interest in the Jack Field and a 51 percent interest in the St. Malo Field and operates both. Production from the development is linked to the market by the Jack/St. Malo pipeline. The $7.5 billion project has a design capacity of 170,000 barrels of crude oil and 42 million cubic feet of natural gas per day. In the first quarter of 2015, production ramped up from three of 10 planned wells. Front-end engineering and design activities for Stage 2—the second phase of the development plan—continued in 2014, with construction expected to begin in 2016.
Also in Walker Ridge is the 60 percent-owned and operated Big Foot project. The facility is designed with a capacity of 75,000 barrels of crude oil and 25 million cubic feet of natural gas per day. At the end of 2014, the development was 93 percent complete. Production is expected to begin in late 2015.
In 2014, net daily production at the 58 percent-owned and operated Tahiti Field averaged 31,000 barrels of crude oil, 13 million cubic feet of natural gas and 4,000 barrels of NGLs. The second development phase, Tahiti 2, is designed to increase production by adding production wells, water injection wells and water injection facilities. The last injection well was completed in the first quarter of 2015. Front-end engineering and design work is expected to begin on the next development phase, the Tahiti Vertical Expansion Project, in the middle of 2015.
The nonoperated Perdido development includes a producing host facility designed to service multiple Alaminos Canyon fields, including Great White, Silvertip and Tobago. Chevron's interests in the development range from 33.3 percent to 60 percent. Net daily production in 2014 averaged 27,000 barrels of crude oil, 31 million cubic feet of natural gas and 4,000 barrels of NGLs. The addition of three new wells in 2014 has helped offset the field's rate of decline.
Chevron also has a role in these deepwater developments:
- Tubular Bells Field is in a water depth of 4,300 feet (1,311 m) in the Mississippi Canyon area. Chevron has a 42.9 percent nonoperated working interest in the development. First oil was produced in November 2014. In 2015, total production is expected to reach 58,000 to 67,000 barrels of oil-equivalent per day.
- Mad Dog Field averaged net daily production of 4,000 barrels of liquids and 1 million cubic feet of natural gas in 2014. Chevron has a 15.6 percent nonoperated working interest in Mad Dog. The surface casing on five new wells was put in place in 2014, and the first well is expected to start production in the third quarter of 2015. The Mad Dog 2 Project is planned to develop the southern portion of the Mad Dog Field. Front-end engineering and design work began in the third quarter of 2014.
- Stampede is a joint development of the Knotty Head and Pony fields, in Green Canyon. Chevron holds a 25 percent nonoperated working interest. The fields are in a water depth of 3,500 feet (1,067 m), with a reservoir depth of 30,000 feet (9,144 m). A final investment decision was made in the third quarter of 2014. Drilling the first well is expected in the fourth quarter of 2015, and production is planned for 2018.
At the Buckskin/Moccasin Project, front-end engineering and design work began in early 2015. The 55 percent-owned Buckskin Field and the 87.5 percent-owned Moccasin Field are 12 miles (19 km) apart. Plans call for seven production wells and a subsea connection to a third-party production facility. A final investment decision on the operated project is expected in 2016.
During 2014 and early 2015, Chevron took part in 12 deepwater exploratory wells—four appraisal and eight exploration. We made significant crude oil discoveries in 2014 at the 42.5 percent-owned and operated Guadalupe prospect and the 55 percent-owned and operated Anchor prospect—both in Keathley Canyon. In late 2014, drilling began on appraisal wells of the Tiber and Gila discoveries and is expected to continue until the middle of 2015.
Chevron acquired 11 new deepwater leases in the Gulf of Mexico in 2014.
At 177,000 barrels per day in 2014, Chevron is California's largest producer in net oil-equivalent. Net daily production averaged 163,000 barrels of crude oil, 66 million cubic feet of natural gas and 3,000 barrels of NGLs.
The majority of the production is from Chevron-operated leases that are part of three major crude oil fields in the San Joaquin Valley—Kern River, Midway Sunset and Cymric. We also operate and hold interests in the San Ardo, Coalinga and Lost Hills fields.
Heavy oil makes up about 86 percent of the crude oil production in the California fields, so we continue to use steam injection—which makes the oil flow more easily—in the recovery of these reserves. In 2014, we drilled 779 new wells, and development programs include plans for drilling 520 more wells in 2015. These programs, and a recent focus on increased steam injection, have helped reverse the decline rate on company-operated properties from 7 percent in 2010 to essentially flat in 2014. Our expertise in steamflood operations has resulted in an increased crude oil recovery rate at the Kern River Field of more than 60 percent.
Chevron also holds a nonoperated working interest of approximately 23 percent in four producing zones at the Elk Hills Field. Net daily production averaged 8,000 barrels of crude oil, 43 million cubic feet of natural gas and 3,000 barrels of NGLs in 2014.
Chevron operates crude oil and natural gas fields in the midcontinent United States—primarily in Colorado, New Mexico, Oklahoma, Texas and Wyoming. In 2014, the company's net daily production in these areas averaged 110,000 barrels of crude oil, 595 million cubic feet of natural gas and 31,000 barrels of NGLs.
Chevron is the largest net acreage leaseholder and one of the largest producers in the Permian Basin of West Texas and southeastern New Mexico. Operations in the Permian date back to 1926, and total net production has surpassed 5 billion barrels of oil-equivalent.
In the Permian Basin, Chevron has increased its capital spending on exploration and development of the approximately 1.5 million net acres (6,070 sq km) of shale and tight resources in the Midland and Delaware basins.
The company has approximately 500,000 net acres (2,023 sq km) in the Midland Basin. We continued to ramp up development work in 2014, drilling 176 company-operated wells. A total of eight rigs on company-operated wells were active at year-end. The company also participated in 206 nonoperated wells during 2014, with 11 rigs active at year-end. Vertical and horizontal pad drilling and multistage fracture stimulation were used in these operations.
Chevron is the largest acreage holder in the Delaware Basin, with approximately 1 million net acres (4,047 sq km). Development activity continued to ramp up in 2014, with 29 company-operated wells drilled during the year. A total of three rigs were active at year-end on company-operated wells. We also took part in 139 nonoperated wells in 2014, with eight rigs active at year-end. The company has two joint development agreements in the Delaware Basin. As a result of development work, significant potentially recoverable oil-equivalent resources have been added, and additional exploration opportunities have been identified.
Appalachian Basin and Michigan
The company is a significant leaseholder in the Marcellus Shale and the Utica Shale, primarily located in southwestern Pennsylvania, eastern Ohio and the West Virginia panhandle and in the Antrim Shale and Collingwood/Utica Shale in Michigan. In 2014, the company's net daily production in these areas averaged 269 million cubic feet of natural gas. Capital spending during 2014 was focused on the Marcellus Shale.
Chevron has 718,000 net acres (2,906 sq km) in the Marcellus Shale. During 2014, 85 development wells were drilled. The company had four drilling rigs in operation at year-end. Development is proceeding at a measured pace, focused on improving execution capability and knowledge about reservoirs.
In the Utica Shale, Chevron has approximately 364,000 net acres (1,473 sq km). Six exploratory wells were drilled in 2014 to acquire data necessary for potential future development.
In Michigan, the company holds approximately 458,000 net acres (1,853 sq km) in the Antrim Shale and Collingwood/Utica Shale formations. Production comes from approximately 2,800 wells in the Antrim.
Our subsidiary Chevron Pipe Line Company transports crude oil, refined petroleum products, liquefied petroleum gas, natural gas and chemicals within the United States. At the end of 2014, the company had a network of 4,634 miles (7,457 km) of crude, natural gas and products pipelines.
In the U.S. Gulf of Mexico, Chevron completed and commissioned a 136-mile (219-km), 24-inch (61-cm) crude oil pipeline from the Jack/St. Malo deepwater production facility to a platform in Green Canyon Block 19 on the U.S. Gulf of Mexico shelf, where there is a connection to pipelines that deliver crude oil into Texas and Louisiana. Pipeline operations began with startup of the production facility in late 2014.
Chevron Shipping Company LLC is based in San Ramon, California.
Our fleet uses a combination of single-voyage charters, short- and medium-term charters, and company-owned and bareboat-chartered vessels. Our fleet includes both U.S.- and foreign-flagged vessels. The U.S.-flagged vessels transport refined products, primarily in the coastal waters of the United States. The foreign-flagged vessels primarily transport crude oil and refined products and feedstocks to and from various locations worldwide. In 2014, the company took delivery of three bareboat charter VLCCs (very large crude carriers) and two Pacific Area Lightering vessels.
Chevron also owns a one-sixth interest in each of seven liquefied natural gas (LNG) carriers that transport cargoes for the North West Shelf Venture in Australia. In 2014, the company took delivery of two new LNG carriers to support its growing LNG portfolio.
Chevron has more than 25 years of experience developing and operating commercial power projects around the world.
Our subsidiary Chevron Power and Energy Management Company manages Chevron's interest in our gas-fired and renewable power generation assets and provides comprehensive commercial, engineering and operational support services to improve the power reliability and energy efficiency of Chevron operations worldwide. The gas-fired cogeneration facilities produce electricity and steam and use recovered waste heat to support enhanced oil recovery operations. The renewable operations consist of wind, geothermal and solar assets.
In 2014, we acquired full ownership of six gas-fired cogeneration plants in California previously held under joint-venture agreements.
Our renewable power portfolio includes the Casper Wind Farm in Wyoming, Questa Solar in New Mexico and Brightfield Solar in California. We also maintain interests in geothermal and solar joint ventures in Arizona, California and Texas.
Marketing and Retail
Chevron manufactures and sells a range of high-quality refined products, including gasoline, diesel, marine and aviation fuels, premium base oil, finished lubricants, and fuel oil additives. We own five U.S. fuel refineries and have a network of Chevron® and Texaco® service stations.
Chevron has a crude refining capacity in the United States of approximately 960,000 barrels per day. Refineries are in Richmond and El Segundo, California; Kapolei, Hawaii; Salt Lake City, Utah; and Pascagoula, Mississippi.
In 2014, we continued to improve our refineries' flexibility and their ability to process lower-cost crude oil. In mid-2014, we completed a project at the Salt Lake City Refinery to improve reliability and allow us to process a broader range of crudes. To increase reliability, six coke drums at the El Segundo Refinery were replaced. At the Richmond Refinery, the company is seeking government approvals to resume construction on a modernization project to replace some of the refinery's processing equipment with more modern technology that is designed to exceed the nation’s toughest applicable environmental and safety standards.
Also in 2014, Chevron became the world leader in premium base oil production with the startup of the lubricant base-oil facility at the Pascagoula Refinery.
Chevron's fuel marketing efforts are managed by our Americas Products organization. Chevron has a network of nearly 8,000 Chevron® and Texaco® service stations in the United States.
The Chevron and Texaco brands, both of which contain our Techron® gasoline additive, are well known to consumers. Chevron's award-winning ExtraMile® convenience stores operate at more than 700 company-owned and franchised sites in California, Oregon and Washington.
We are among the leading suppliers of jet and aviation fuels to commercial airlines, as well as a key supplier to the military. Chevron markets aviation fuel to commercial airlines at more than 40 airports in the United States and supplies many additional U.S. general aviation locations as well.
Chevron sells finished lubricants to commercial, industrial and retail customers nationwide. Our U.S. line of lubricant and coolant products includes our well-known Chevron Havoline® and Chevron Delo® motor oils.
The 25,000-barrel-per-day premium base oil facility at our Pascagoula Refinery began operations in July 2014. The $1.4 billion project makes Chevron the world's largest producer of premium base oils.
Supply and Trading
Chevron's Supply and Trading organization is a critical link between Chevron's upstream and downstream operations. Headquartered in Houston, Texas, with additional trading hubs in London and Singapore and offices in San Ramon, California, it provides crude oil and refined products at the right time to the right markets at the best price. The organization manages daily commodity transactions averaging 5 million barrels of liquids and 6 billion cubic feet of gas.
The Crude Supply and Trading group manages trading for all major crude oil grades. Through the purchase and marketing of substantial crude oil production volumes, the group fulfills the requirements of the company's global refining and product networks.
The Product Supply and Trading group engages in the global supply, trading and logistics of gasoline, diesel, jet fuel, refinery feedstocks and blendstocks, heavy fuels, biofuels, coke, sulfur, ammonia, and asphalt.
The Gas Supply and Trading (GSAT) group markets natural gas to wholesale and large end-use consumers, such as utility and industrial customers and pipeline operators. GSAT also negotiates supply commitments of natural gas through short-term and mid-term LNG marketing opportunities in North America, Europe and the Asia-Pacific region.
Chevron is one of the world's top producers of commodity petrochemicals, through the 50-50 joint venture Chevron Phillips Chemical Company LLC (CPChem) and its affiliates. Based in Houston, Texas, CPChem manufactures building-block chemicals—olefins, polyolefins, aromatics, styrenics and specialty products—used to make consumer and industrial products.
In the second quarter of 2014, CPChem started up the world's largest 1-hexene plant at the company's Cedar Bayou facility in Baytown, Texas. The compound 1-hexene is used in the manufacture of polyethylene, a plastic resin commonly converted into film, pipe, detergent bottles, and food and beverage containers.
Construction to expand the Cedar Bayou facility's normal alpha olefin capacity is expected to be completed in 2015. Normal alpha olefins and their derivatives are used extensively as plasticizers, synthetic motor oils, lubricants and automotive additives and as building blocks in the development of new chemical products.
In December 2014, CPChem announced completion of the 90,000-metric-ton-per-year expansion of ethylene production at its Sweeny complex in Old Ocean, Texas.
In April 2014, CPChem started construction of its U.S. Gulf Coast Petrochemicals Project, which is expected to capitalize on feedstock from the development of natural gas from shale in North America. The $6 billion project includes an ethane cracker with an annual design capacity of 1.5 million metric tons of ethylene at the Cedar Bayou plant and two polyethylene units in Old Ocean, each with an annual design capacity of 500,000 metric tons. Startup is expected in 2017.
In December 2014, CPChem announced plans to build a state-of-the-art polyethylene pilot plant at its research and technology facility in Bartlesville, Oklahoma. The testing site will provide leading-edge polyethylene research, including new catalyst and polymer development as well as polymer performance enhancements. Construction is scheduled to begin in 2015.
In January 2015, CPChem announced the sale of its Ryton® polyphenylene sulfide business.
Oronite, a Chevron subsidiary headquartered in San Ramon, California, develops and manufactures fuel and lubricant additives and chemicals designed to enhance the performance of all types of transportation and industrial equipment. Facilities in the United States include:
- A technology center in Richmond, California
- A manufacturing plant in Belle Chasse, Louisiana
- Sales headquarters for the Americas region in Houston, Texas
Chevron owns the Questa molybdenum mine in New Mexico. In 2014, the mine permanently shut down operations because it was no longer economically feasible. Although mining operations have ceased, we are committed to fulfilling our regulatory obligations for remediation and reclamation of the mine under the oversight of Chevron Environmental Management Company.
Chevron has three technology companies that support the company's businesses. The work that these companies do is integrated across Chevron. The groundbreaking technologies we are developing are deployed throughout the company.
Chevron is among the leaders in the application of ocean-bottom node and cable sensing technology for deepwater fields in the U.S. Gulf of Mexico and at deepwater projects around the world. This technology improves imaging and enables tracking of fluid migration during field production.
In the deep water, Chevron continues to make advances that enable the company to drill and operate safely and efficiently, with technologies such as long-distance power, high-boost subsea pumping and advanced remote inspection monitoring using remote autonomous vehicles. In 2014, the largest single-phase seabed pump system in the industry was successfully installed to boost well production at the Jack and St. Malo fields in the Gulf of Mexico.
The company launched a unique product that enables customers to move to a high-performance heavy-duty motor oil product when encountering stop-and-go operation. This new viscosity grade provides fuel economy performance, oxidation stability and excellent deposit control, improving diesel engine reliability.
In 2014, Chevron completed upgrades to the photovoltaic demonstration project at Questa, New Mexico. The project continues to test and evaluate solar technologies and has produced 5.4 million kilowatt-hours of renewable energy from its inception in April 2011 through the end of 2014.
We finished construction of a new data center in San Antonio, Texas, in 2014 to accommodate Chevron's growth in data and in computing power needs. Driven by technology advances, this state-of-the-art facility provides increased capacity and scalability while reducing operating costs and improving reliability.
Chevron uses technology to monitor the effects of operations on the environment and the community. For example, we developed and deployed advanced airborne sensors and algorithms to measure methane in the atmosphere. We also deployed wave gliders during dredging operations at the Wheatstone Field in Australia to monitor real-time water data and impact on ocean water quality.
Updated: May 2015