Exploration and Production
Using the latest technology, Chevron continues to make major crude oil field discoveries in the United States while maintaining strong production in mature fields.
Chevron is the third-largest hydrocarbon producer in the United States. During 2008, we produced an average of 671,000 barrels of net oil-equivalent per day. This production includes 421,000 barrels of crude oil and natural-gas liquids and 1.5 billion cubic feet of natural gas.
Our company's major producing operations in the United States are in California, the Gulf of Mexico, Louisiana, Texas, New Mexico, the Rocky Mountains and Alaska.
Gulf of Mexico Shelf
Chevron is one of the largest producers of crude oil and natural gas on the U.S. Gulf of Mexico shelf, achieving an average daily net production during 2008 of 52,000 barrels of crude oil, 421 million cubic feet of natural gas and 9,000 barrels of natural gas liquids. The net oil-equivalent production in 2008 was 131,000 barrels per day. As of the end of 2008, Chevron was the largest leaseholder in the Gulf of Mexico.
The company drilled 37 development and delineation wells during 2008 and participated with partners in three deep-gas exploration wells. Our deep-gas efforts in 2008 focused on delineation of discoveries made the year before in the greater Tiger Shoal area, especially Flatrock, which is a multiple-reservoir deep-gas discovery below the Chevron-operated Tiger Shoal Field.
Gulf of Mexico Deep Water
Chevron is one of the leading producers in the deepwater Gulf of Mexico, averaging net daily production of 24,000 barrels of crude oil, 18 million cubic feet of natural gas and 1,000 barrels of natural gas liquids during 2008 (net oil-equivalent production of 28,000 barrels per day).
Two fields with larger Chevron investments are Genesis, in which we hold a 56.7 percent interest, and Petronius, in which we hold a 50 percent interest. We operate both. In 2008, Genesis averaged 8,000 barrels of crude oil per day and 10 million cubic feet of natural gas per day (5,000 barrels of net oil-equivalent). At Petronius, total daily production averaged 22,000 barrels of crude oil and 24 million cubic feet of natural gas (12,000 barrels of net oil-equivalent), including production from the nearby Perseus Field. Chevron has interests in other producing fields in the deepwater Gulf, including K2 and Mad Dog.
Chevron's investments will help develop significant reserves in the deepwater Gulf.
Chevron has a 75 percent interest in and operates the Blind Faith Field. This $1.2 billion project is designed for a daily capacity of 62,000 barrels of crude oil and 50 million cubic feet of natural gas. Production startup and first oil from four development wells occurred in the fourth quarter of 2008. Ramp-up to full capacity is expected in 2009.
The Tahiti Field was discovered at a water depth of approximately 4,100 feet (1,250 m). First oil was achieved in May 2009. Total daily production is expected to ramp up to 125,000 barrels of crude oil and 70 million cubic feet of natural gas before the end of the year. We hold a 58 percent interest in and operate Tahiti.
In deepwater Gulf of Mexico, Chevron participated in 12 exploratory deepwater wells – four wildcat and eight appraisals – in 2008. Two wildcat wells were in the process of drilling at year-end 2008. The program resulted in one announced discovery in February 2009 at the 55 percent-owned and operated Buckskin prospect.
California
The company is the largest producer of oil-equivalent in California, at 215,000 barrels per day. Daily production in 2008 averaged 196,000 barrels of crude oil, 88 million cubic feet of natural gas and 5,000 barrels of natural gas liquids.
Heavy oil makes up about 84 percent of the crude oil production in the California fields, so we continue to employ steamflooding in the recovery of these reserves.
Chevron operates primarily in the San Joaquin Valley, where its three major crude oil fields – Kern River, Midway Sunset and Cymric – had combined net oil-equivalent production of 151,000 barrels per day in 2008. We plan to increase water- and gas-handling capacity in the Kern River Field to enable production of new crude oil resources. In 2007, the Kern River Field reached the 2 billion-barrel production milestone.
Chevron has crude oil resources in diatomite reservoirs at Lost Hills, Cymric, McKittrick and Midway Sunset fields in California. Formed from the skeletons of prehistoric microorganisms called diatoms, diatomite is an unconventional reservoir rock with very high porosity and low permeability from which production can be difficult.
A recovery technique using high-pressure cyclic steam continues to improve recovery from Cymric's Antelope reservoir. This process also is used at the McKittrick Field to increase production from diatomite reservoirs. At the light-oil Lost Hills Field, the company is using waterflood technology to improve recovery of hydrocarbons.
At San Ardo, Chevron is in the midst of a major capital project designed to boost production using the company's latest steamflood technology, including automation tools, operations software and an elaborate water-management strategy.
Midcontinent and Alaska
Chevron's operated interests in the midcontinental United States include producing fields in Colorado, Oklahoma, New Mexico, Texas and Wyoming. Chevron remains the second-largest hydrocarbon producer in the Permian Basin of West Texas.
In Alaska, Chevron operates 10 platforms and several onshore and offshore oil- and gas-producing natural gas fields in the Cook Inlet Basin. And the company has nonoperated exploration and production working interests on the North Slope.
In 2008, the company's operations outside California and the Gulf of Mexico averaged net daily production of 296,000 oil-equivalent, composed of 974 million cubic feet of natural gas, 101,000 barrels of crude oil and 33,000 barrels of natural gas liquids.
Chevron Global Gas
Chevron Global Gas, headquartered in San Ramon, California, plays a key role in the company's strategic plans to make natural gas a more widely used form of energy.
Chevron's strategy includes liquefied natural gas (LNG) and gas-to-liquids (GTL). We want to make natural gas easier to transport globally and increase its use as a transportation fuel.
LNG Import Terminals
Chevron's gas business continues to gain natural gas market access in the United States and other key areas. The third-party Sabine Pass LNG terminal in Cameron Parish, Louisiana, was completed in second quarter 2008. Chevron has contractual rights to 1 billion cubic feet per day of regasification capacity at the terminal beginning in July 2009.
Chevron also has completed the permitting process to develop the Casotte Landing regasification facility adjacent to the company's Pascagoula Refinery, in Mississippi. Casotte Landing remains a development option for Chevron to deliver future LNG supplies to the United States.
Natural Gas Marketing
Chevron Natural Gas is one of the top marketers of natural gas in North America. We offer an array of services and have established relationships with utility and industrial customers and pipeline operators.
Pipeline
Headquartered in Houston, Texas, Chevron Pipe Line Company owns and in some cases operates an extensive system of crude oil, refined products, chemicals and natural gas pipelines and storage facilities in the United States.
We operate a U.S. pipeline network of more than 11,100 net miles (17,700 km) of regulated and unregulated pipelines for moving crude oil, natural gas and refined products. During 2008, Chevron Pipe Line:
- Completed the construction of a 30-inch (76-cm) natural-gas gathering pipeline serving the Piceance Basin in northwest Colorado.
- Participated in the successful installation of the Amberjack-Tahiti lateral pipeline on the seafloor of the U.S. Gulf of Mexico.
- Finished the expansion of the partially owned West Texas LPG (liquefied petroleum gas) Pipeline system in February 2009.
Chevron subsidiary Sabine Pipe Line Co. owns and operates the Henry Hub, North America's natural gas market center. The center allows natural gas to flow through a dozen interstate and intrastate pipeline systems. The network links markets in the Midwest, Northeast, Southeast and Gulf Coast.
Shipping
Based in San Ramon, California, Chevron Shipping Company operates a fleet of Chevron-owned and bareboat-chartered vessels transporting crude oil, refined products, liquefied petroleum gas and liquefied natural gas to customers worldwide. In 2008, Chevron managed approximately 3,000 deep-sea tanker voyages.
In 2008, Chevron took delivery of a new U.S.-flagged double-hulled product tanker with a total capacity of 300,000 barrels. Two additional U.S.-flagged product tankers are scheduled for delivery in 2010. All the vessels of Chevron's owned and bareboat-chartered fleet are now double-hulled.
Power Generation
Headquartered in San Ramon, California, Chevron Global Gas has investments in 13 power generation facilities around the world.
Facilities in the United States include seven in California, two in Nevada and one in Washington state.
Marketing and Retail
Chevron manufactures and sells a range of high-quality refined products, including gasoline, diesel, marine and aviation fuels, motor oil, and lubricant and fuel oil additives. We own five U.S. fuel refineries and a New Jersey asphalt refinery and have a network of nearly 10,000 Chevron- and Texaco-branded service stations.
Refining
Chevron has a crude-refining capacity of approximately 937,000 barrels per day. Refineries are in Richmond and El Segundo, California; Kapolei, Hawaii; Salt Lake City, Utah; and Pascagoula, Mississippi.
In addition, Chevron's asphalt-refining capacity is about 80,000 barrels per day as of the end of 2008, at the company's plant in Perth Amboy, New Jersey.
In 2008, we completed an upgrade that allows the El Segundo refinery to process heavier, higher-sulfur crude oils. This will reduce the refinery's production costs. In Pascagoula, a project was launched for a new Continuous Catalytic Reformer unit, which is expected to increase gasoline production by 10 percent – or 600,000 gallons per day – by mid-2010.
In 2008, we completed projects at El Segundo and Pascagoula that allow the refineries to process heavier, higher-sulfur crudes. This improves the high-value product yield with the benefit of lower crude acquisition costs.
Marketing
Chevron has a network of more than 8,800 Chevron-branded service stations in the United States. Consumers know and trust the Chevron brand. In 2008, the Oil Price Information Service ranked Chevron the most powerful gasoline brand in the United States for the fifth consecutive year. Also in 2008, Chevron's convenience store brand, Extra Mile®, was ranked as the top convenience store in a survey conducted by Corporate Research International for the second year in a row.
By the end of 2008, more than 5,000 Chevron retail sites were updated to enhance the customer experience.
Lubricants
Chevron sells lubricants to commercial, industrial and retail customers nationwide. Our line of lubrication and coolant products includes such well-known products as Havoline®, Delo®, Ursa® and Revtex®. Those products are sold under our family of brands – Chevron, Texaco and Caltex.
We are the top U.S. supplier of premium lubricant base stocks west of the Rockies, and we are still growing.
We have plans to build a new premium base oil plant at our Pascagoula, Mississippi, refinery. The facility is expected to have daily production of approximately 25,000 barrels of premium base oil for use in manufacturing high-performance lubricants, such as motor oils for consumer and commercial uses.
Supply & Trading
The Supply & Trading organization provides crude oil and refined products to Chevron's refining and marketing network. Headquartered in Houston, Texas, this branch of our company trades more than 300 different grades of crude oil and petroleum products as well as marine fuels and marine lubricants.
Chevron is among the leading marketers of jet fuels in the United States and is among the leading suppliers of jet fuel and aviation gasoline to commercial airlines, general aviation and military customers. Supply & Trading also markets aviation fuel at more than 1,000 airports.
Chemicals
Chevron is one of the world's top producers of commodity petrochemicals through Houston-based Chevron Phillips Chemical Company LLC (CPChem). We own half of the joint venture. CPChem manufactures building-block chemicals used to make consumer and industrial products, including olefins, polyolefins, aromatics, styrenics and specialty products. Major U.S. plants are in Texas, Louisiana, Mississippi and Ohio.
Chevron Oronite Co., a Chevron subsidiary, is a world leader in performance additives for lubricating oils and fuels. Chevron Oronite is a leading supplier of additives for marine, locomotive, heavy industry, passenger cars, buses and motorcycles. Facilities in the United States include:
- A technology center in Richmond, California
- A plant to make fuel and lubricant additives in Belle Chasse, Louisiana
- A facility in San Antonio, Texas, for testing and development
Mining
Chevron Mining Inc. operates four mines in the United States:
- McKinley, a surface coal mine in New Mexico
- Kemmerer, a surface coal mine in Wyoming
- North River, an underground coal mine in Alabama
- Questa, an underground molybdenum mine in New Mexico
In 2008, the three coal mines had a combined annual production capacity of 11.8 million tons.
The company also owns a 50 percent interest in Youngs Creek Mining Company LLC, a joint venture to develop a coal mine in northern Wyoming. Construction of the mine is scheduled to begin when sufficient coal sales contracts have been secured.
In September 2008, Chevron sold its rare-earth processing facilities and mine in Mountain Pass, California. The petroleum coke calciner assets of Chicago Carbon Company, a wholly owned subsidiary in Illinois, also were sold in 2008. Other undeveloped Alabama coal reserves were actively being marketed for sale in early 2009.
We continue to build on our record of safety. The Questa and Mountain Pass mines received safety awards in 2007. In 2008, workers at the Kemmerer Mine exceeded three years without a lost-workday injury.
Technology
Chevron has three technology companies that support the company's businesses. Planning and implementation are integrated across the company to ensure collaboration between our technology companies and the businesses.
Our accomplishments in 2008 include the following:
- Chevron developed an augmented virtual environment for real-time, remote 3-D surveillance of oil field operations in California's San Joaquin Valley.
- With Weyerhaeuser, we created Catchlight Energy LLC, a 50-50 joint venture to develop the next generation of renewable transportation fuels from nonfood plant sources.
- Chevron continued biofuels research with University of California at Davis, the Georgia Institute of Technology, Texas A&M University and the National Renewable Energy Laboratory.
- We safely operated five demonstration hydrogen fueling stations across the United States to further understand the readiness of hydrogen for transportation.
Updated: May 2009