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Overview of Upstream and Gas

George L. Kirkland

By George L. Kirkland, Executive Vice President for Upstream and Gas
Chevron Corporation

Overview of Upstream and Gas

San Ramon, California, May 28, 2008

I'm pleased to be here again to review with you Chevron's upstream and gas businesses.

As we highlighted in the video, we had an excellent 2007 — operationally and financially — and I will spend some time today discussing last year's accomplishments and also cover our plans for 2008 and beyond.

Slide: Positioned With a Strong Worldwide Portfolio

Let's look at Chevron's upstream business portfolio, the very foundation of our future growth plans. We have a strong position in nearly all of the world's key basins. The diversity and breadth of this portfolio gives us a competitive advantage.

Altogether we have a net daily production capacity of 2.7 million barrels of oil-equivalent and 11 billion barrels of proved oil and gas reserves.

Let me spend some time highlighting some of our key regions of the world.

First, let's look at Asia-Pacific.

Slide: Regional E&P Companies: Asia-Pacific

Chevron is the No. 1 producer in Thailand and Indonesia. In Australia, we are the largest holder of natural gas resources.

Slide: Regional E&P Companies: Europe, Eurasia & ME

We are one of the largest producers in the Caspian Region and we have strong assets in Europe and in the Partitioned Neutral Zone between Saudi Arabia and Kuwait.

Slide: Regional E&P Companies: Africa & Latin America

In western Africa, we are among the largest deepwater leaseholders in Nigeria, and we are a top-tier producer in both Angola and Nigeria.

In Latin America we have solid positions in Argentina, Brazil, Colombia, Venezuela, and Trinidad and Tobago.

Slide: Regional E&P Companies: North America

In North America, Chevron is the largest producer in the Gulf of Mexico Shelf and the San Joaquin Valley, and we are the largest leaseholder in the Gulf of Mexico Shelf and deep water combined. We have strong positions in the U.S. Mid-Continent, East Coast of Canada and the oil sands in Alberta.

Slide: Consistent Exploration Success

Production and reserves growth begins with exploration success. Over the past six years, our exploration program achieved a success rate of 45 percent.

In 2007, we have continued our recent success in exploration, last year adding approximately 1 billion barrels of new oil and gas resources to our portfolio. We had discoveries in western Africa, Asia and North America, and added significant resources in Canada and Bangladesh.

Let's look at some of the major projects we're pursuing that will be contributing to our growth plans.

Slide: World-Class Portfolio of Major Capital Projects

This map shows the location of 40 major capital projects in our queue, each representing greater than $1 billion in Chevron share investments.

Note the geographic diversity of these projects. These developments are key to bringing on new production to help meet the world's energy demand.

This is an exciting time. Let me spend a moment to highlight a few of our significant future projects.

Slide: Major Capital Projects: Asia-Pacific

In Asia-Pacific, let's start with the Gorgon natural gas project. We continue to achieve a number of project milestones. Last October, we received environmental approvals from the Australian federal government on our Gorgon development plans.

Also in offshore Australia, this past March we announced our plans for a new LNG project for the 100 percent-owned Wheatstone gas resource.

Earlier this year, we announced our decision to invest in the Platong II project. This new facility in the Gulf of Thailand will increase gas production by approximately 330 million cubic feet per day. First gas is expected in 2011.

And as referenced in the video, we announced a new partnership for the development of the Chuandongbei natural gas area in central China that will enable us to expand our presence in this important nation.

Slide: Major Capital Projects: Africa (Angola/Republic of the Congo)

In Angola's deep water, fabrication is under way on facilities for the Tombua-Landana project. We are scheduled for start up in 2009 with peak production of 100,000 barrels of oil per day by 2011.

And, as part of our global gas strategy, we announced the decision to invest in the Angola LNG project. Natural gas resources will be commercialized by collecting and transporting gas located offshore Angola to an onshore liquefaction plant.

In the Republic of the Congo, the Moho-Bilondo project came onstream last month. Maximum total daily production of 90,000 barrels of crude oil is planned in 2010.

Slide: Major Capital Projects: Africa (Nigeria)

In Nigeria, the deepwater Agbami project is nearing completion with first oil expected later this year. Peak production of 250,000 barrels of oil per day is forecasted one year after startup.

We are proceeding with the Usan deepwater project, which is scheduled for first oil in 2011.

Slide: Major Capital Projects: Latin America

In Brazil, we are moving ahead with our $2.8 billion deepwater Frade development. Construction is well under way on the processing facilities, and first oil is expected in 2009 with peak production of 90,000 barrels of oil-equivalent per day slated to occur in 2011.

Also in Brazil, the Papa-Terra project is progressing toward an investment decision in late 2008.

Slide: Major Capital Projects: Eurasia & Middle East

In Kazakhstan, the $7 billion Tengiz expansion is nearing completion. Once fully online later this year, we expect to increase production to 540,000 barrels of oil per day.

In Azerbaijan, Phase III of the ACG [Azeri-Chirag-Guneshli] project started up last month, eventually adding over 300,000 barrels of oil per day of new production.

Slide: Major Capital Projects: North America

As described in the highlight video, our deepwater Blind Faith project is nearing completion. First oil is expected later this year, quickly ramping up to a peak rate of 70,000 barrels of oil-equivalent per day.

Construction and installation activities continue at our deepwater Tahiti project, with first oil forecasted for third quarter 2009.

Fabrication is under way on the Perdido deepwater project in the Gulf of Mexico, which should begin producing in 2010.

In Colorado, we are pursuing the Piceance Basin natural gas play where we have a great lease position in this highly prospective area.

And in Canada, the Athabasca Oil Sands Expansion 1 project is in the construction phase and is scheduled to start up in 2010.

In closing, 2007 was another record-setting year for our upstream and gas businesses. We have every confidence in our ability to grow profitably driven by success in our base business as well as completing the projects shown on this slide.

Slide: Our Continued Commitment to Earnings and Returns

Now I would like to introduce Mike Wirth, who will discuss our downstream businesses.

Read the Overview of Downstream by Mike Wirth

Cautionary Statement

Updated: May 2008