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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 the largest liquids producer and one of the largest hydrocarbon producers in the United States. In 2013, we produced an average of 657,000 barrels of net oil-equivalent per day, or about one-fourth 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 2013, Chevron was the largest leaseholder in the Gulf of Mexico.

Gulf of Mexico Shelf

Chevron is one of the largest producers of crude oil and natural gas on the Gulf of Mexico shelf. Daily net production during 2013 averaged 52,000 barrels of crude oil, 278 million cubic feet of natural gas and 7,000 barrels of natural gas liquids (NGL).

In 2013, we drilled 46 development and delineation wells, which help map oil and natural gas formations in the earth. Chevron completed drilling at the Lineham Creek ultra-deep gas exploration well in the third quarter of 2013. The ultra-deep drilling program evaluates the potential of 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 2013 was 91,000 barrels of crude oil, 69 million cubic feet of natural gas and 8,000 barrels of NGL, primarily from the Tahiti and Blind Faith fields and the Perdido Regional Development. We had five drill ships in the deepwater Gulf of Mexico at the end of 2013.

Marine Well Containment Company LLC, a nonprofit company sponsored by Chevron and other major energy companies, continues work on an expanded containment system designed to increase capacity and compatibility with a wider range of well designs, flow rates and environmental conditions. The expansion includes two marine capture vessels. The first vessel arrived in the Gulf of Mexico in September 2013 and began final commissioning and testing. The second vessel is scheduled to arrive in early 2014.

The Jack and St. Malo fields are in the Walker Ridge area and are being jointly developed with a host floating production unit between the two fields in 7,000 feet (2,134 m) of water. Chevron has a 50 percent interest in the Jack Field and a 51 percent interest in the St. Malo Field. In 2013, the company’s interest in the production host facility was reduced to 40.6 percent. 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. First oil is expected in late 2014.

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. The $5.1 billion development is expected to begin production in 2015.

In 2013, net daily production at the 58 percent-owned and operated Tahiti Field averaged 34,000 barrels of crude oil, 14 million cubic feet of natural gas and 2,000 barrels of NGL. The second development phase, Tahiti 2, is designed to increase production by adding two production wells, three water injection wells and water injection facilities. Startup of the first well happened in the fourth quarter of 2013, and the second is expected be completed in late 2014.

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 2013 averaged 28,000 barrels of crude oil, 33 million cubic feet of natural gas and 4,000 barrels of NGL. As more wells are completed, production is expected to offset decline in existing wells.

Chevron also has a role in these deepwater developments:

  • Tubular Bells Field is in 4,300 feet (1,311 m) of water in the Mississippi Canyon area. Chevron has a 42.9 percent nonoperated working interest in the development. First oil is planned for the third quarter of 2014. Total production is expected to reach 44,000 barrels of oil-equivalent per day.
  • Mad Dog Field had a net daily production average of 5,000 barrels of liquids and 1 million cubic feet of natural gas in 2013. Chevron has a 15.6 percent nonoperated working interest in Mad Dog. The placement of surface casing on five new wells began in late 2013, and drilling of the first well began in the first quarter of 2014. The Mad Dog II Project is planned to develop the southern portion of the Mad Dog Field. Front-end engineering and design work is expected in late 2014.
  • Stampede is a joint development of the Knotty Head and Pony fields, in Green Canyon. Chevron holds a 20 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). The project started front-end engineering and design work in the second quarter of 2013. A final investment decision is expected in the fourth quarter of 2014.

At the 55 percent-owned and operated Buckskin Project, planning work continues toward front-end engineering and design, which is expected in 2015. The Moccasin discovery, 12 miles (19 km) from Buckskin, is a potential tieback opportunity into Buckskin.

During 2013, Chevron took part in six deepwater exploratory wells—three appraisal and three wildcat. In March 2013, Chevron announced a discovery at the Coronado prospect in Walker Ridge. The well is approximately 190 miles (308 km) off the Louisiana coast at a depth greater than 6,127 feet (1,868 m).

Chevron acquired 11 new deepwater leases in the Gulf of Mexico in 2013.

California

At 177,000 barrels per day in 2013, Chevron is California’s largest producer in net oil-equivalent. Net daily production in 2013 averaged 162,000 barrels of crude oil, 69 million cubic feet of natural gas and 4,000 barrels of NGL.

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.

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 2013, company-operated leases in the Kern River Field had net average daily production of 68,000 barrels of crude oil and 3 million cubic feet of natural gas. We drilled 393 wells at Kern River in 2013. And in 2014, we plan to drill more than 360 additional wells while we work on developing new steamflooding techniques.

Chevron has crude oil resources in diatomite reservoirs in the San Joaquin Valley, at Cymric, Lost Hills, McKittrick and Midway Sunset fields. Formed from the skeletons of prehistoric microorganisms called diatoms, diatomite reservoirs are highly porous, but not very permeable, which can make production difficult. In 2013, net average daily production from these diatomite reservoirs was approximately 36,000 barrels of liquids and 11 million cubic feet of natural gas.

A recovery technique using cyclic steam continues to improve recovery from Cymric, McKittrick and Midway Sunset fields. At Lost Hills, the company is using waterflood technology to improve production of the field’s light oil.

Chevron has a nonoperated interest in the Elk Hills Field. Primary and enhanced recovery techniques are used to produce crude oil and natural gas from the field. In 2013, net daily production was 9,000 barrels of crude oil, 44 million cubic feet of natural gas and 3,000 barrels of NGL.

Midcontinent

Chevron operates crude oil and natural gas fields in the midcontinent United States—primarily in Colorado, New Mexico, Oklahoma, Texas and Wyoming. Chevron is one of the largest hydrocarbon 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 2013, the company’s net daily production in these areas averaged 96,000 barrels of crude oil, 610 million cubic feet of natural gas and 28,000 barrels of NGL.

Shale and Tight Resources

Chevron pursues opportunities in unconventional oil and natural gas resources with a focus on developing tight oil, tight gas and natural gas from shale. Tight oil and gas are hydrocarbons trapped in formations that cannot be produced readily or in large volumes without using techniques such as horizontal drilling and hydraulic fracturing.

Chevron is the largest acreage holder in the Delaware Basin, with approximately 1.3 million total acres (5,261 sq km) in West Texas and southeast New Mexico. In June 2013, Chevron reached a joint development agreement covering 104,000 total acres (421 sq km) and providing access to related infrastructure. We began drilling horizontal wells in 2012 and had three rigs running at the end of 2013. Chevron continues to participate in wells drilled by others and added more than 150 wells in the last three years.

In the Midland Basin, Chevron has more than 480,000 total acres (1,943 sq km) at Wolfcamp, a tight oil development that is using vertical drilling and multistage fracture stimulation. At the end of 2013, these holdings included 107,000 total acres (433 sq km) where Chevron has an average nonoperated working interest of about 70 percent. The holdings include eight rigs and more than 1,300 wells that produce an average net daily oil-equivalent of more than 20,000 barrels. Work at the remaining acreage, which is Chevron-operated and approximately 97 percent-owned, continued to ramp up and had eight rigs operating by the end of the year.

Chevron is developing the reservoirs in the East Texas area, including the Travis Peak, Cotton Valley, Bossier and Haynesville zones. We worked to develop the Travis Peak and Cotton Valley reservoirs using multiwell horizontal drilling. Chevron has more than 83,000 total acres (336 sq km) in these zones.

In the Piceance Basin, Chevron is developing owned and operated natural gas properties consisting of approximately 72,000 total acres (291 sq km) in northwestern Colorado. We are also evaluating the Niobrara Shale as another potential resource in this basin.

Chevron is a significant leaseholder in the Marcellus Shale and the Utica Shale in Pennsylvania, Ohio and West Virginia and in the Antrim Shale in Michigan. In 2013, Chevron’s net daily production in these areas averaged approximately 220 million cubic feet of natural gas.

Chevron’s leases in the Marcellus Shale total approximately 917,000 total acres (3,712 sq km). In 2013, we drilled 70 development wells in the Marcellus and had seven drilling rigs in operation by the end of the year.

Chevron has approximately 345,000 total acres (1,397 sq km) in the Utica Shale. In 2013, we collected data and drilled seven exploratory wells.

In Michigan, Chevron has approximately 459,000 total acres (1,858 sq km) in the Antrim and Collingwood/Utica shale formations, with production in the Antrim Shale.

Pipeline

Our subsidiary Chevron Pipe Line Company transports crude oil, refined petroleum products, liquefied petroleum gas, natural gas and chemicals within the United States.

In the U.S. Gulf of Mexico, Chevron is leading the construction of a 136-mile (219-km), 24-inch (61-cm) crude oil pipeline from the planned 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. In early 2014, we finished laying the pipe and installed two subsea connections for future tie-ins. All remaining work on the pipeline is expected to be completed by startup of the production facility in late 2014.

Chevron sold its owned and operated Northwest Products System in June 2013.

Shipping

Chevron Shipping Company LLC is based in San Ramon, California.

In 2013, we managed approximately 2,100 deep-sea tanker voyages using 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.

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 2013, the company took delivery of two new vessels while work continued to modernize the fleet with new LNG carriers and other ships.

Power Generation

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, photovoltaic and solar-to-steam production assets.

We recently announced an agreement to acquire full working interest in six gas-fired cogeneration plants in California previously held under joint-venture agreements. In Casper, Wyoming, Chevron owns and operates the Casper Wind Farm. The 16.5-megawatt wind power facility is designed to optimize the efficient use of a decommissioned refinery site for delivery of clean, renewable energy to the local utility provider.

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.

Refining

Chevron has a crude refining capacity in the United States of approximately 955,000 barrels per day. Refineries are in Richmond and El Segundo, California; Kapolei, Hawaii; Salt Lake City, Utah; and Pascagoula, Mississippi.

In 2013, we continued working to improve our refineries’ flexibility and their ability to process lower-cost crude oil. In early 2013, we completed a project at the Pascagoula Refinery that allowed us to process a broader range of crudes. A project to improve the flexibility at the Salt Lake City Refinery is scheduled to be completed by the middle of 2014.

Improved access to railways has enabled Chevron to process more North American light sweet crudes at our refinery in Burnaby, Canada. Chevron refineries in Pascagoula and Salt Lake City have also been able to process feedstocks from the midcontinent region of the United States.

Also in 2013, work continued on a lubricant base-oil facility at the Pascagoula Refinery. Mechanical completion is expected in the second quarter of 2014, and we expect to ramp up to full production by mid-year.

Americas Products

Chevron’s fuel marketing efforts are managed by our Americas Products organization. Chevron has a network of more than 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 600 company-owned and franchised sites in California, Oregon and Washington.

We are among the leading suppliers of jet and aviation fuels for commercial airlines and military customers. Chevron markets aviation fuel at more than 50 airports in the United States, Canada, the Caribbean and Latin America.

Lubricants

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.

Startup of the 25,000-barrel-per-day premium base-oil facility at our Pascagoula Refinery is planned for the first half of 2014. The $1.4 billion project is expected to make 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, it provides crude oil and refined products at the right time to the right markets at the best price.

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.

Chemicals

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 used to make consumer and industrial products, including olefins, polyolefins, aromatics, styrenics and specialty products.

In 2013, CPChem continued construction of a 1-hexene plant at its Cedar Bayou facility in Baytown, Texas. Startup is expected in the second quarter of 2014. The plant is expected to be the largest of its kind in the world. 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.

CPChem also announced the final investment decision on its U.S. Gulf Coast Petrochemicals Project, which is expected to capitalize on feedstock from new shale gas development 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 facility and two units in Old Ocean, Texas, each with an annual design capacity of 500,000 metric tons. Startup is expected in 2017.

Construction is under way on a 90,000-metric-ton-per-year expansion of ethylene production at CPChem’s Sweeny complex in Old Ocean, Texas. Startup is expected in the third quarter of 2014. CPChem completed its study to expand normal alpha olefin capacity at Cedar Bayou and is proceeding with development plans. A number of small projects in 2013 helped Cedar Bayou add 35,000 metric tons per year of capacity. The incremental expansion is expected to add 100,000 metric tons per year to the current capacity of 710,000 metric tons per year in a phased approach from 2014 to 2015. If approved, the project could be completed as early as 2015.

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

Mining

Through our subsidiary Chevron Mining Inc., 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.

Technology

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.

We continue to make advances in technologies that enable us to drill and operate safely and efficiently in deep water. One of these technologies is long-distance power and remote inspection using autonomous vehicles. And in collaboration with a supplier, Chevron deployed an innovative multizone completion system on the first four Jack and St. Malo wells in the Gulf of Mexico that saved two to seven weeks per well compared with conventional techniques.

Advances in digital oilfield technologies continue to deliver high-quality data that help us make better decisions. For example, proprietary waterflood surveillance and diagnostics tools provide ready access to new information and greatly improve our ability to understand reservoir performance.

Scientists from our lubricants business were recognized by the Society of Automotive Engineers for pioneering work in formulating new heavy-duty engine oil. The zero-phosphorus, ultra-low-ash engine oil reduces maintenance costs and significantly extends or eliminates diesel engine filter maintenance.

Chevron has made significant advances in leak detection by deploying modeling technology in most of the product pipelines the company operates. Sophisticated models enable us to use real-time operations data to locate pipeline leaks.

A solar-to-steam demonstration project, commissioned in 2011 to produce steam from solar thermal energy for oil production operations in Coalinga, California, completed a long-term performance test in 2013. The project produced quality steam in excess of design capacity throughout the test while exhibiting reliable and stable operations. During the year, the facility delivered 635,000 barrels of steam.

The photovoltaic projects at Questa, New Mexico, and in the San Joaquin Valley of California continue to test and evaluate solar technologies and have together produced 10 million kilowatt-hours of renewable energy from inception through 2013.

Chevron’s information technology infrastructure is essential to every aspect of the business and critical to our data-intensive work. Seismic data processing and interpretation, for example, are supported by our networked, high-performance computing infrastructure that provides new levels of processing capability.

Updated: August 2014

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