Our efforts to build local supplier capacity and use local content are among the important contributions Chevron makes in the countries where we operate. Investing in our suppliers and contractors helps foster local economic development and helps meet our business needs around the world. In 2007, we purchased approximately $35 billion in goods and services from suppliers and contractors ranging from large multinational corporations to locally based businesses.

Building a Diverse U.S. Supplier Network

A diverse supplier network promotes an inclusive business environment. By supporting small, local, minority-and women- owned businesses, we develop new and cost-effective solutions that fuel our mutual growth. In 2007, we spent $2.9 billion on goods and services provided by small businesses in the United States, an overall increase that is slightly below our goal of 28 percent of total U.S. expenditures. We spent $464 million with women-owned businesses and $434 million with minority-owned businesses.

To continue building our network, we introduced a supplier diversity training program for Chevron's supply chain/procurement personnel in the last quarter of 2007. This program will help us identify new opportunities for small and diverse suppliers to work with us.

In many U.S. locations where we operate, we provide potential suppliers with seminars and training programs as well as assistance in obtaining the appropriate small business, women-owned or minority-supplier certifications. In addition, we work with our larger suppliers to help them develop their diversity programs for subcontractors.

Chevron works directly with its suppliers to develop their business practices. Our relationship with MetroplexCore — a Houston-based, minority-owned, environmental and industrial services company — demonstrates how collaboration can achieve our business needs and build the capacity of our partners.

In 2007, Chevron Environmental Management Co. helped MetroplexCore align its health, environment and safety practices with Chevron's, provided safety training to MetroplexCore employees, and established a mentoring program on operational excellence.

Building a Strong Local Supplier Network Worldwide

Outside the United States, Chevron's investments in local businesses contribute to the overall development and prosperity of the communities where we work, expand our supplier network, and demonstrate our commitment to diversity.

In 2007, we held mentoring and supplier training forums in Angola, Kazakhstan, Kuwait and Thailand. These forums enable local suppliers to understand our business needs and our health, environment and safety requirements. This makes them more successful in tendering for our business and providing the goods and services we need.

In Thailand, Chevron funded safety training workshops for, CUEL Ltd., a partner firm. CUEL, one-third owned by Chevron, was created in 2000 to perform engineering, construction and installation services for Unocal Thailand, which was acquired by Chevron in 2005. Since 2000, CUEL has grown into Thailand's largest full-service oil and gas contractor, with 2,200 employees, of whom 95 percent are Thai nationals. Through 2007, CUEL employees worked more than 13 million hours in its fabrication yard without a lost-time incident.

Building Capacity Through Local Content

Our partnership in Kazakhstan with ESS Support Services is an example of how we build local capacity. Chevron has a supplier agreement with ESS to provide catering and facilities management services to Tengizchevroil, in which Chevron owns a 50 percent interest. In 2007, after a competitive process, we renewed our contract with ESS, in part because of ESS's demonstrated commitment to developing local capacity. Between 2005 and 2007, ESS increased local supplier content from 48 percent to 78 percent. More than 97 percent of its 3,400 employees are Kazakh citizens. In 2007, working with Tengizchevroil, ESS provided training to local suppliers on such issues as food risk and health assessment to help them meet ESS's and Tengizchevroil's standards for health, safety, reliability and quality.

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Corporate Responsibility Report 2007

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Supplier Diversity

Chevron promotes an inclusive business environment.

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