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Report to Stockholders

Mike Wirth

By Mike Wirth, Executive Vice President for Downstream
Chevron Corporation

Overview of Downstream

San Ramon, California, May 28, 2008

Good morning. I'm pleased to be here today to discuss downstream's performance.

As Peter and George have noted, our focus on disciplined execution also helped downstream produce strong results in 2007.

Before I discuss last year's achievements, let me highlight key areas of our business. Downstream operations include refining, marketing of fuels and lubricants, and supply and trading.

In 2007, we refined about 1.8 million barrels of crude oil and sold about 3.5 million barrels of products per day. We market under the Chevron, Texaco and Caltex brands through more than 25,000 retail stations. Every day, we supply millions of customers around the world with high-quality products and services.

We're well positioned in key markets.

Slide: Well Positioned in Growth Regions

Asia-Pacific is becoming the dominant energy consumer in the world, growing 90 percent through 2030. And the large demand for energy in the United States will continue.

Our asset portfolio targets these important regions that will deliver strong returns and profitable growth.

We're also expanding integration with our strong upstream position in these regions to capture full value-chain margins.

Slide: What We Accomplished in 2007

In 2007 we delivered our best safety results ever.

We completed asset sales in Europe, North America and Latin America.

We made progress in improving refinery reliability.

We delivered a 16 percent return on capital employed in a tough market environment.

And we enhanced the scale and flexibility of our refining system.

Slide: Added Refining Scale and Flexibility

Our South Korea joint venture completed its major refinery upgrade on budget and well ahead of schedule. The upgrade, including the installation of one of the world's largest vacuum columns, will lower the refinery's crude costs and increase production of higher-value products.

At El Segundo, we completed the heavy crude project safely and on time. This project will lower crude costs and improve reliability and crude flexibility.

Slide: Building the 'Reliability Refinery'

I'm pleased to report that we're making good progress building out the "Reliability Refinery." We've hired reliability experts from the nuclear, chemical and refining industries. In 2007, we trained 700 personnel at our Reliability University.

Advanced designs and technologies are being incorporated into capital projects to ensure long-run reliability of existing and new assets.

Finally, the focus that transformed our safety culture into a top performer is advancing our reliability culture as well.

Slide: More Focused and Efficient Marketing

We continue to align marketing with our refining operations.

Product line and supply chain complexities are being reduced. We're shifting to higher-return distribution channels and restructuring our fuel and lubricants businesses to streamline costs.

Our fuel quality remains unsurpassed due to our unique Techron fuel additive. As reported by the Lundberg Survey, Chevron has maintained its number one status as the "King of brand value" in the United States for five years running.

We will maintain our product quality and brand strengths as the foundation of a more focused and profitable marketing business.

Slide: Capturing Integration Value

Widening spreads in crude pricing are putting a premium on strategic integration. Building increased integration value strengthens crude realizations for our upstream as well as for our partners. In 2007, we ran 10 equity crudes new to individual refineries.

With the completion of the heavy crude project, El Segundo is running heavy, sour equity crude from the Partitioned Neutral Zone.

In the United Kingdom, we're developing a second Caspian Blend project that could increase runs up to 70 percent of the slate as Tengiz production ramps up.

Slide: Increasing Refining Scale and Flexibility

Our growth investment is focused on projects with strong economic returns and a balance of improving margins and increased refining scale.

At the start of this year, we had two projects under construction — a clean diesel project at Singapore and the Continuous Catalytic Reformer to increase reliability and yield at Pascagoula.

We anticipate sanctioning four more major projects this year, all with 2010 planned startups. This includes a crude flexibility project at Richmond and yield improvement projects at El Segundo, Korea and Pascagoula.

By year-end, we expect to have six different major projects in construction at five facilities.

Slide: Our Continued Commitment

I'd like to close by summarizing our commitment to deliver world-class safety and improved returns.

Our goal is to be a top competitor at any stage of the business cycle.

Focus, discipline and execution continue to be the keys to superior competitive performance.

We're executing the right strategies, making tangible progress in the business and advancing solid opportunities for growth in volumes and margins.

Thanks for your attention. Now, I'll turn the meeting over to Dave.

Read the Summary Remarks by David J. O'Reilly

Cautionary Statement

Updated: May 2008