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For the latest figures, view the 2013 Supplement to the Annual Report (4.7 MB).

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 2012, we produced an average of 655,000 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, Pennsylvania, Ohio, Oklahoma, Texas, West Virginia and Wyoming.

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 2012 averaged 48,000 barrels of crude oil, 321 million cubic feet of natural gas and 8,000 barrels of natural gas liquids (NGLs).

In 2012, we drilled 39 development and delineation wells, which help map oil and natural gas formations in the earth. In addition, drilling at the Lineham Creek ultra-deep gas exploration well is expected to be completed in the first half of 2013. The ultra-deep drilling program evaluates the potential of subsurface targets below 25,000 feet (7,620 m). Chevron added 15 new leases to its shelf portfolio in mid-2012.

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 2012 was 105,000 barrels of crude oil, 74 million cubic feet of natural gas and 8,000 barrels of NGLs, primarily from the Tahiti and Blind Faith fields and the Perdido Regional Development. We added a fifth drill ship to the deepwater Gulf of Mexico in 2012.

Marine Well Containment Company LLC is a nonprofit company sponsored by Chevron and other major energy companies. In July 2012, it completed a successful demonstration of its interim containment system, including the physical deployment of a 100-ton capping stack designed to seal off a wellhead. The capping stack was lowered 6,900 feet (2,103 m), latched to a simulated wellhead on the seafloor and pressure tested.

The Jack and St. Malo fields are in the Walker Ridge area and are being jointly developed with a host floating production unit situated between the two fields in 7,000 feet (2,134 m) of water. Chevron has a 50 percent interest in the Jack Field, a 51 percent interest in the St. Malo Field and a 50.7 percent interest in the production host facility. The $7.5 billion project has a design capacity of 177,000 barrels of oil-equivalent per day. First oil is expected in 2014.

Also in Walker Ridge is the 60 percent owned and operated Big Foot project. The facility is designed with a capacity of 79,000 barrels of oil-equivalent per day. The $4.1 billion development is expected to begin production in 2014.

In 2012, net daily production at the 58 percent owned and operated Tahiti Field averaged 43,000 barrels of crude oil, 17 million cubic feet of natural gas and 3,000 barrels of NGLs. The second development phase, Tahiti 2, is designed to increase production to more than 100,000 barrels of crude oil per day. First production on the $2.3 billion project is expected in the third quarter of 2013.

The nonoperated Perdido development includes a producing host facility designed to service multiple Alaminos Canyon fields, including Great White, Silvertip and Tobago. Chevron's interest in the development ranges from 33.3 percent to 60 percent. Total daily production in 2012 averaged 63,000 barrels of crude oil (24,000 net), 75 million cubic feet of natural gas (29 million net) and 7,000 barrels of NGLs (3,000 net). As more wells are completed, total daily production is expected to stabilize and average about 100,000 barrels of oil-equivalent in 2013.

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 $2.3 billion development. First oil is planned for 2014. Total production is expected to reach 40,000 to 45,000 barrels of oil-equivalent per day.
  • Caesar/Tonga is in Green Canyon. Chevron has a 20.3 percent nonoperated working interest in the area. Production began in early 2012, and maximum total daily production reached 62,000 barrels of oil-equivalent by the end of the year.
  • Mad Dog Field development drilling stopped in 2008 when the platform drilling rig was lost during Hurricane Ike. A new platform rig was installed in the second quarter of 2012, and drilling is expected to resume in 2014. Chevron has a 15.6 percent nonoperated working interest in the field. Production in the field resumed in August 2012 after a 15-month platform turnaround. The Mad Dog II Project is expected to add total daily production of 120,000 to 140,000 barrels of oil-equivalent. A final investment decision is expected in 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 3,600 feet (1,097 m) with a reservoir depth of 30,000 feet (9,144 m). The project is expected to begin front-end engineering and design work by mid-2013.

During 2012, the company took part in three deepwater exploratory wells. Drilling of an appraisal well at the 43.8 percent-owned and operated Moccasin discovery was put on hold in early 2013 for equipment repair and is expected to resume later this year. 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 in more than 6,127 feet (1,868 m) of water. Additional work will be needed to determine the extent of the resources. Chevron also had a 20 percent nonoperated working interest in the Hummer Shallow wildcat well.

Chevron acquired 43 new deepwater leases in the Gulf of Mexico in 2012.


Chevron is California's largest producer in net oil-equivalent, at 178,000 barrels per day in 2012. Net daily production in 2012 averaged 163,000 barrels of crude oil, 70 million cubic feet of natural gas and 4,000 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. In 2012, the net daily production from these leases was 119,000 barrels of crude oil and 9 million cubic feet of natural gas.

Heavy oil makes up about 86 percent of the crude oil production in the California fields, so we continue to employ steam injection—which makes the oil flow more easily—in the recovery of these reserves. The Kern River Field had net average daily production from company-operated leases of 70,000 barrels of crude oil and 2 million cubic feet of natural gas. The company drilled 250 wells at Kern River in 2012. And in 2013, we plan to drill more than 300 more wells while we work on developing new steamflooding techniques.

Chevron has crude oil resources in diatomite reservoirs in the San Joaquin Valley, at Lost Hills, Cymric, McKittrick and Midway Sunset fields. Formed from the skeletons of prehistoric microorganisms called diatoms, diatomite reservoirs have high porosity and low permeability, which can make production difficult. In 2012, net average daily production from these diatomite reservoirs was approximately 31,000 barrels of liquids and 10 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. In 2012, 208 development wells were drilled. Some were drilled into areas that included shale. Primary and enhanced-recovery techniques are being used to increase production of crude oil and natural gas that would not be recoverable using conventional methods.


Chevron operates producing 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 in 2010, the total net production surpassed 5 billion barrels of oil-equivalent.

In 2012, the company's net daily production in these areas averaged 90,000 barrels of crude oil, 600 million cubic feet of natural gas and 29,000 barrels of NGLs.

Unconventional 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 established techniques such as horizontal drilling and hydraulic fracturing.

Chevron is one of the largest acreage holders in the Delaware Basin, with approximately 1.1 million total acres (4,451 sq km) in West Texas and southeast New Mexico. A major portion of the more than 350,000 total acres in New Mexico was acquired in October 2012. Average net daily production from the acquired acreage was 4,000 barrels of crude oil, 23 million cubic feet of natural gas and 1,000 barrels of natural gas liquids. One drilling rig operated by Chevron was added, and we plan to have three rigs running by the third quarter of 2013. We have participated in more than 100 wells in the last three years.

In the Midland Basin, development continues at the Wolfcamp tight oil play. Chevron has more than 320,000 total acres (1,295 sq km) in the trend. At the end of 2012, these holdings included 107,000 total acres (433 sq km) in properties where Chevron has an average nonoperated working interest of about 70 percent in more than 1,100 wells. Average net daily oil-equivalent production totals more than 18,000 barrels. The remaining acreage, which is company-operated and approximately 97 percent-owned, continued to ramp up. Seven rigs were operating at 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 continued to appraise Haynesville Shale in 2012 with two new wells drilled in Panola and Nacogdoches counties. 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 Utica Shale in southwestern Pennsylvania, Ohio and West Virginia and in the Antrim Shale in Michigan. In 2012, Chevron's net daily production in these areas averaged approximately 138 million cubic feet of natural gas.

Chevron's leases in the Marcellus Shale total approximately 714,000 total acres (2,890 sq km). In 2012, we drilled 100 development wells in the Marcellus and had 10 drilling rigs in operation by the end of the year. Chevron has a 49 percent interest in Laurel Mountain Midstream, LLC, an affiliate that owns more than 1,200 miles (1,931 km) of natural gas lines servicing the Marcellus.

Chevron has approximately 491,000 total acres (1,987 sq km) in the Utica Shale. In 2012, we collected seismic data in eastern Ohio and we began drilling four 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. In early 2013, we began drilling an exploratory well in the Collingwood/Utica Shale.

Natural Gas and Trading

Chevron ranks among the top natural gas marketers in the United States. In 2012, natural gas sales averaged approximately 6 billion cubic feet per day. We offer an array of services and have established relationships with utility and industrial customers and pipeline operators.

Chevron's gas business continues to gain access to the natural gas market in the United States and other key areas. We have contracted liquefied natural gas (LNG) offloading, storage and regasification capacity at the Sabine Pass LNG facility and natural gas transportation capacity in a third-party pipeline system connecting the terminal to the country's natural gas pipeline grid.


Headquartered in Bellaire, Texas, 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 2012, Chevron operated more than 10,370 net miles (16,690 km) of pipeline. The network carries approximately 1.13 million barrels of liquids and 1.3 billion cubic feet of natural gas per day.

In early 2013, Chevron sold the owned and operated Northwest Products System. This system consisted of a 760-mile (1,223-km) refined products pipeline extending from Salt Lake City, Utah, to Spokane, Washington; a dedicated jet fuel pipeline serving the Salt Lake City International Airport; and three refined products terminals in Idaho and Washington. Chevron also is in the process of relinquishing its interest in the Trans Alaska Pipeline System.

In the Gulf of Mexico, Chevron heads 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 Gulf of Mexico shelf, where it will connect to pipelines delivering crude oil into Texas and Louisiana. The project is expected to be completed by 2014.


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

During 2012, 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 are engaged in transporting refined products, primarily in the coastal waters of the United States. The foreign-flagged vessels are engaged primarily in transporting crude oil and refined products and feedstocks to and from various locations worldwide.

Chevron also owns a one-sixth interest in each of seven LNG carriers that transport cargoes for the North West Shelf Venture in Australia. In 2012, Chevron ordered eight new vessels to modernize the fleet and increase LNG coverage. We also have contracts in place to build LNG carriers and vessels.

Power Generation

Chevron has investments in 11 power generation facilities around the world.

We have nine joint-venture gas-fired plants in the United States. Seven are in California, and two are in Nevada. Our owned and operated Casper Wind Farm, in Casper, Wyoming, is a 16.5-megawatt wind power facility 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.


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 2012, we continued working to improve our refineries' flexibility and their ability to process lower-cost crude oil. In July 2012, production began at a new processing unit designed to further improve the El Segundo Refinery's reliability, enhance high-value product yield and provide additional flexibility to process a broad range of crude oil. Similar projects made progress in 2012 at the Salt Lake City and Pascagoula refineries and are scheduled to be completed in late 2013.

With increased availability of crudes from the midcontinent area of North America, the company's refineries in Burnaby, Canada, and Salt Lake City are processing more of these crudes. In 2013, additional rail infrastructure is planned to enable the processing of larger quantities of midcontinent crudes.

Also in 2012, work continued on a lubricant base-oil facility at the Pascagoula Refinery. Mechanical completion is expected by the end of 2013.

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.

With our Techron® gasoline additive, our Chevron and Texaco brands remain long-standing icons for consumers. Chevron's award-winning ExtraMile® convenience stores operate at more than 600 company-owned and franchised sites in California, Oregon, Washington and Florida.

We are among the leading suppliers of jet and aviation fuels to commercial airlines and military customers. Chevron markets aviation fuel at more than 60 airports in the United States, Canada, the Caribbean and Latin America.


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. We are the top U.S. producer of premium base oil west of the Rockies, and we are still growing.

Construction progressed during 2012 on the 25,000-barrel-per-day premium base-oil facility at our Pascagoula Refinery. Mechanical completion of the $1.4 billion project is expected by the end of 2013. This addition to Chevron's base-oil production capacity is expected to position the company as the worldwide industry leader in premium base-oil production.

Strategy, Technology & Commercial Integration

Chevron's Strategy, Technology & Commercial Integration organization is a critical link between Chevron's upstream and downstream operations. 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 purchasing 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 for Chevron's marketing network and third-party customers.

Together, these groups handle more than 400 grades of crude oil and petroleum products and manage nearly 5 million barrels per day in commodity transactions.


Chevron is one of the world's top producers of commodity petrochemicals, through the Houston-based joint venture Chevron Phillips Chemical Company LLC and its affiliates (CPChem). We own 50 percent of the company. CPChem manufactures building-block chemicals used to make consumer and industrial products, including olefins, polyolefins, aromatics, styrenics and specialty products.

In 2012, CPChem began construction of a 1-hexene plant at the company's Cedar Bayou facility in Baytown, Texas. Startup is expected in 2014. The plant is expected to be the largest plant of its kind in the world. The organic compound 1-hexene is used to make high-density polyethylene, a polyolefin used in milk jugs, water pipes and plastic lumber.

CPChem also began front-end engineering and design work on several projects on the Gulf Coast that are expected to capitalize on feedstock from new shale gas development in North America. These include projects at the Cedar Bayou facility and Old Ocean, Texas.

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


Through our subsidiary Chevron Mining Inc., Chevron sold its remaining coal mining operations in 2012. Early in the year, the Kemmerer, Wyoming, surface coal mine was sold. We also sold our 50 percent interest in Youngs Creek Mining Company, LLC, which was formed to develop a coal mine in northern Wyoming. Final reclamation work continued at the surface coal mine we operate in McKinley, New Mexico.

Underground development and production at the Questa molybdenum mine continued at reduced levels in response to weak prices for molybdenum.


Chevron has three technology companies that support the company's businesses. The work that these companies do is integrated across Chevron.

Highlights in 2012 include:

  • Chevron launched a new tank technology for storing water at sites where Chevron drills for natural gas from shale. These patent-pending modular metal tanks can be quickly assembled and then taken apart and reused. This precludes the need for water storage pits and is intended to enhance safety, reduce land disturbance, reduce site pad size and significantly lower costs. The first fully operational tank was brought into service in Ohio.
  • Chevron is building on more than four decades of research and development in improved catalysts. In 2012, the next-generation ISODEWAXING® catalyst, ICR® 432, contributed to the highest base-oil yield ever recorded at the Richmond Base Oil Plant in California. Premium base oils are produced using isomerized dewaxing technology.
  • Chevron continues to evaluate advanced biofuel technologies. Catchlight Energy LLC, a 50 percent-owned joint venture, signed agreements to supply forest-based feedstock to a third-party conversion plant and to purchase biofuel blendstocks from that plant. These will be blended with finished fuels at our Pascagoula, Mississippi, refinery. The plant was mechanically complete and began commissioning in late 2012.
  • We commissioned an 800-kilowatt plant at our Cymric Field in California that takes waste heat from fluids produced from field operations and converts it to electricity. The process lowers fluid temperatures without venting heat to the atmosphere.
  • We completed a demonstration project to enhance the energy efficiency and reliability of cooling towers in the McKittrick Field in California by using variable-speed direct-drive motors. The project is designed to reduce energy and maintenance costs while improving reliability.
  • At the photovoltaic projects at Questa, New Mexico, and Brightfield, San Joaquin Valley, California, we are testing and evaluating solar technologies that, from inception through the end of 2012, have together produced 6.8 million kilowatt-hours of renewable energy.

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.

For collaborative work, Chevron and the Los Alamos National Laboratory received the 2012 Excellence in Technology Transfer award presented by the Federal Laboratory Consortium. The award was received for wireless sensing technology used to collect real-time temperature and pressure information from oil and gas wells.

Updated: April 2013

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