Report to Stockholders

By David J. O'Reilly, Chairman and CEO
Chevron Corporation

Summary Remarks

Houston, Texas, April 26, 2006

Thank you, Mike.

Our success demonstrates that we're moving in the right direction with strong momentum. We are confident that we have the right strategies to create a strong platform for sustained performance.

And at the heart of Chevron are our people. Their dedication, resourcefulness and sheer ingenuity drive our success.

And they are continuing to build value, from working in Australia to develop natural gas, to exploring for oil and gas in the deepwater Gulf of Mexico and West Africa, to expanding our downstream presence in Asia.

At last year's stockholder meeting, we announced that we were acquiring Unocal. It has been roughly eight months since the transaction closed, and integration efforts are almost complete.

The successful integration of Unocal has strengthened our oil and gas position in key regions around the world.

In addition to the announced acquisition synergies, we've also identified several opportunities for significant value creation including:

  1. building an industry leadership position in drilling, leveraging Unocal's technology and know-how with Chevron's drilling strengths and extensive portfolio;
  2. enhanced transportation options in the Caspian region through Unocal's ownership in a pipeline connecting the Caspian to the Mediterranean; and
  3. increased presence in the Asian natural gas market.

In addition, Unocal provided us with a deep source of talent, know-how and technology that we are integrating throughout our enterprise.

Technology plays a critical role in meeting the world's growing demand for energy and is critical to the success of our company.

We have a unique organization that delivers integrated technologies and services to the entire value chain of our upstream, downstream and natural gas-based businesses.

Our technology strategies focus on opportunities for growth by building competency and capability in exploration, deepwater development, natural gas and heavy oil.

In addition to being the No. 1 producer of renewable energy among our peers, we're involved in emerging technologies such as advanced batteries, hydrogen and biofuels. At Chevron, we are positioning ourselves to capture value as these technologies become viable.

Chevron seeks to create social and economic value in countries where we do business. Our success is measured by our ability to foster and maintain both close and lasting relationships. The commitment of our people to deliver world-class performance is reflected in our corporate responsibility performance.

This week we published our 2005 Corporate Responsibility Report. Our efforts have been recognized by a number of widely respected rating organizations.

We formally launched global deployment of our HIV/AIDS policy.

We have a Human Rights Statement that makes clear our intent to support human rights for our employees and the many communities in which we operate. Our statement builds off the expectations for our conduct as expressed in The Chevron Way and our Business Conduct and Ethics Code.

Our management system for operational excellence in health, safety and the environment was recognized as meeting or exceeding international standards.

Lastly, in response to the natural disasters in late 2004 and 2005, we have committed more than $20 million to support relief efforts and long-term recovery projects in South Asia, Pakistan and along the U.S. Gulf Coast.

Ladies and gentlemen, since we met last year, we have had another record year of earnings while overcoming a number of unexpected challenges. And we have strong momentum moving forward.

We continue to build on our financial strength, grow our strong asset base and develop our people. We are committed to our long-term strategic direction and to our partnerships around the world.

Our success is a reflection of the great efforts of the thousands of Chevron people. It is this "Human Energy" that will continue to drive our mission to deliver safe, clean and reliable energy to fuel economic growth and human progress.

Updated: April 2006