press release

Chevron Communicates Plans for Long-Term Growth Forecasts

  • Deep Project Queue and Industry-Leading Exploration Creates Strong Growth Platform
  • Development Projects to Produce More Than 1 Million Oil-Equivalent Barrels Per Day by 2011
  • Exploration Added Over 5 Billion Oil-Equivalent Barrels to Resource Base Over Past 5 Years

NEW YORK, N.Y., March 13, 2007 -- Chevron Corporation (NYSE:CVX) told financial analysts at a meeting today in New York City that its current oil and gas development projects are among the best in the industry and are projected to produce more than 1 million oil-equivalent barrels per day by 2011. These additional volumes are expected to result in an average annual production growth of at least 3 percent through 2010.

"We are making progress on more than 30 oil and gas development projects that represent a Chevron investment of at least $1 billion each," Chairman and CEO Dave O'Reilly said. "This excellent queue of projects and our successful exploratory program are expected to contribute to an average proved-reserves replacement rate of more than 100 percent for the next five years."

O'Reilly also remarked that the company is investing to increase the capacity of its refinery network and to enhance the flexibility of its refineries to process lower-quality crude oils. "Chevron is building competitive integrated positions in the world's major growth markets," O'Reilly said. "We have the financial strength and a track record of investment discipline and operational excellence to continue adding value for our stockholders," added O'Reilly.

Upstream - Exploration and Production

Bobby Ryan, vice president of Global Exploration, and George Kirkland, executive vice president of Upstream and Gas, provided an overview of Chevron's exploration program and oil and gas development projects.

Ryan said the company drilled 42 successful exploration and appraisal wells in 2006 and had an average drilling success rate of 45 percent over the past five years. During that period, the company added over 5 billion oil-equivalent barrels to its resource base.

"This is a result that cannot be easily or quickly duplicated," Ryan said. "It takes years to build the technical competency, do the basin geology and develop the integrated technologies that give Chevron a competitive advantage, and it will not be easily eroded."

Commenting on the company's oil and gas development projects, Kirkland said, "These projects deliver significant organic growth, and given where they are in the development cycle, we are confident of achieving an average annual production growth of at least 3 percent through 2010. Not only is the outlook positive for near-term production growth, but our exploration success continues to fill our development pipeline," Kirkland said.

In remarks on rising industry costs and base-business performance, Kirkland said, "We've experienced cost increases the past few years, but we are extremely disciplined in our spending on our capital projects and daily operations. In addition, given our focus on reservoir management and subsurface delineation, we have been able to mitigate production declines from existing assets and, in some cases, actually boost production."

Downstream - Refining, Marketing and Transportation

Mike Wirth, executive vice president of Downstream, outlined Chevron's recent success and future commitment to enhance the reliability and utilization rates of the company's refinery network.

"Improving and sustaining reliability is a lot less expensive than building new capacity or acquiring new facilities," Wirth said. "Safe and reliable operations are my top priorities."

Wirth added that the company is selectively investing to add flexibility to process heavier and higher sulfur crude oils. These projects, and other investments that add scale, are targeted at improving margins. The company also is selectively divesting assets to improve returns on capital employed. This will result in a more focused footprint, where the company position is stronger but in fewer locations.

"Industry forecasts show road-transportation fuel demand growing by about 6 million barrels per day by 2015. Two-thirds of this growth will be located in North America and Asia," Wirth said. "The good news for Chevron is that 75 percent of our refining capacity is located in these regions, and we are well-positioned to capitalize on this significant growth opportunity. Not only do we have a stronger position geographically, but we also have stronger assets relative to industry in these areas."

Chevron's presentation materials for this meeting are available at www.chevron.com in the Investors section.

Chevron Corporation is one of the world's leading energy companies. With more than 55,000 employees, Chevron subsidiaries conduct business in approximately 180 countries that involve producing and transporting crude oil and natural gas, and refining, marketing and distributing fuels and other energy products. Chevron is based in San Ramon, Calif. More information on Chevron is available at www.chevron.com.

CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This press release of Chevron Corporation contains forward-looking statements relating to Chevron's operations that are based on management's current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries. Words such as "anticipates," "expects," "intends," "plans," "targets," "projects," "believes," "seeks," "schedules," "estimates," "budgets" and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are crude oil and natural gas prices; refining margins and marketing margins; chemicals prices and competitive conditions affecting supply and demand for aromatics, olefins and additives products; actions of competitors; the competitiveness of alternate energy sources or product substitutes; technological developments; the results of operations and financial condition of equity affiliates; the inability or failure of the company's joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude oil and natural gas development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of the company's net production or manufacturing facilities or delivery/transportation networks due to war, accidents, political events, civil unrest or severe weather; the potential liability for remedial actions under existing or future environmental regulations and litigation; significant investment or product changes under existing or future environmental statutes, regulations and litigation; the potential liability resulting from pending or future litigation; the company's acquisition or disposition of assets; government-mandated sales, divestitures, recapitalizations, changes in fiscal terms or restrictions on scope of company operations; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; and the factors set forth under the heading "Risk Factors" on page 31 of the company's 2006 Annual Report on Form 10-K. In addition, such statements could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed in this press release could also have material adverse effects on forward-looking statements. U.S. Securities and Exchange Commission (SEC) rules permit oil and gas companies to disclose only proved reserves in their filings with the SEC. Certain terms, such as "resources," "undeveloped gas resources," "oil in place," "recoverable reserves," and "recoverable resources," among others, may be used in this press release to describe certain oil and gas properties that are not permitted to be used in filings with the SEC. In addition, SEC regulations define oil-sands reserves as mining-related and not a part of conventional oil and gas reserves.

Updated: March 2007