press release

Chevron Reports Third Quarter
Earnings of $425 Million

SAN FRANCISCO, Oct. 25, 1994 -- Chevron Corporation today announced third quarter net income of $425 million ($.65 per share), little changed from the $420 million ($.64 per share) reported for the third quarter of 1993. Excluding special items in both periods, results were $407 million ($.63 per share), down 28 percent from the very strong 1993 third quarter operating results of $565 million ($.87 per share).

Chairman and CEO Ken Derr said, "Our operating results improved significantly from this year's second quarter -- up 55 percent -- primarily due to higher U.S. refined products sales margins and the absence of refinery operating problems and incidents that plagued us last quarter. Nevertheless, margins were not as strong as in last year's third quarter, contributing to the earnings decline between years."

Third quarter 1994 earnings included a benefit from a previously announced settlement with the Internal Revenue Service for open tax years 1979 through 1987. Tax and related interest reserves established in prior years exceeded the net amount of the settlement, resulting in a $301 million benefit to income. Substantially offsetting this favorable adjustment were environmental remediation provisions, principally in the U.S. downstream segment, and other charges totaling $283 million. The net effect of these special items was a benefit of $18 million to this year's third quarter net income. In the 1993 third quarter, special items reduced net income by $145 million.

Net income for the first nine months of 1994 was $1.070 billion ($1.64 per share), up 10 percent from $971 million ($1.49 per share) earned in the 1993 nine months. The 1994 year-to-date earnings were reduced by $23 million of special charges, whereas the comparable 1993 period included $662 million of special charges, mostly related to last year's U.S. downstream restructuring provision.

"Our third quarter operations were also impacted by the decline in U.S. natural gas prices, which fell during the quarter, averaging about 20 percent less than in last year's third quarter," continued Derr. "Crude oil prices also trended down during the quarter, though were still about $1.00 per barrel higher than in last year's third quarter." Derr also noted that the company's worldwide net liquids production exceeded one million barrels a day in the third quarter as international production levels continue to increase.

"On another positive note, our chemicals operations continued to rebound, reflecting the improved U.S. economy. While the recent flooding in Southeast Texas has temporarily hindered production, our restructuring programs and continuing cost reduction efforts have positioned this business to benefit from the long-awaited industry turnaround that is finally underway," noted Derr.

"After high second quarter operating expenses, reflecting a number of refinery operating and other problems, our operating cost performance improved markedly in the third quarter," Derr said. "Per barrel costs, adjusted for special items, fell 43 cents from this year's second quarter to $6.53, about the same level as our per barrel cost for the year 1993."

Total revenues in the 1994 third quarter were $9.5 billion, up 3 percent from $9.2 billion in the year earlier quarter. Total revenues for the first nine months of 1994 were $26.6 billion, down 6 percent from $28.2 billion in the comparable 1993 period. Year-to-date revenues declined because of lower refined products and crude oil prices in the first half of the year.

Included in third quarter net income were $30 million of foreign exchange losses, compared with foreign exchange gains of $9 million in the 1993 third quarter. For the first nine months, foreign exchange losses were $51 million compared with $42 million of foreign exchange gains in the 1993 period.

Exploration and Production

U.S. exploration and production third quarter earnings of $63 million included special charges totaling $61 million for environmental remediation and litigation provisions. This compares with third quarter 1993 earnings of $125 million, which included special charges of $32 million for prior-year tax adjustments.

Excluding special items, earnings declined as lower natural gas prices and decreased liquids production more than offset the benefit of higher crude oil prices. Compared with the third quarter of 1993, average crude oil realizations increased $1.03 per barrel to $15.03, but average natural gas prices declined 44 cents per thousand cubic feet to $1.62. Net liquids production declined 6 percent to 371,000 barrels per day; net natural gas production volumes were flat at 2.0 billion cubic feet per day.

International exploration and production earnings for the third quarter were $131 million, compared with $113 million earned in last year's third quarter, which included charges of $62 million for prior-year tax adjustments. Excluding the special charges in last year's results, the earnings decline was largely due to a $33 million swing in foreign currency effects.

International net liquids production increased 13 percent to 640,000 barrels per day. New production came on stream in early 1994 in the North Sea and Nigeria and production was also up in Indonesia and Kazakhstan. Natural gas production increased 22 percent to 573 million cubic feet per day, due to higher volumes in Canada, Kazakhstan and Australia.

Refining and Marketing

U.S. refining and marketing operations incurred a net loss of $110 million in the 1994 third quarter compared with net earnings of $164 million in the year-ago quarter. This year's results included special charges for environmental remediation totaling $218 million for various marketing and refining sites, and reflected the results of the third quarter completion of a comprehensive evaluation of future clean-up requirements at the company's service stations and product terminals. The prior-year quarter included $30 million in special charges, mostly related to environmental provisions. Adjusting for these special charges, third quarter results of $108 million were down significantly from the $194 million earned in the year-earlier quarter.

Sales margins for refined products improved from this year's second quarter, but were still well below those achieved in last year's third quarter. Ample supplies are holding down product prices. Sales volumes declined 9 percent, primarily due to the sale of the company's Philadelphia refinery in August of this year. Output from that refinery had been sold as unbranded products to third party resellers.

International refining and marketing net earnings increased to $55 million from $50 million earned in the 1993 third quarter. Product sales margins remained depressed, but total sales volumes increased 4 percent. Sales volumes in the company's marketing operations in Canada, the United Kingdom and the Caltex areas of operations averaged 12 percent higher, but this was partially offset by lower sales volumes in the company's international trading activities. Foreign exchange losses were $1 million, compared with foreign exchange gains of $4 million in the 1993 quarter.

Chemicals

Chemicals earnings increased to $68 million in the third quarter, up sharply from the $6 million earned in the third quarter of 1993. The 1994 quarter included a special charge of $4 million for environmental remediation; the 1993 quarter included a $9 million charge for prior-year tax adjustments.

Restructuring and cost reduction programs in recent years have positioned the company's chemical operations to benefit from the industry upswing. The improving U.S. economy has stimulated demand, bringing the chemical industry into better balance. Higher sales volumes and higher prices, particularly for ethylene and polyethylene, contributed to the increased earnings. Foreign exchange losses were $8 million and $4 million in the 1994 and 1993 third quarters, respectively.

Corporate and Other

Corporate and other earnings were $212 million compared with charges of $48 million in the third quarter of 1993. Results in the 1994 quarter included the reversal of $301 million of tax and related interest reserves resulting from the company's global settlement with the Internal Revenue Service for various issues relating to the years 1979 through 1987. The 1993 quarter included net special charges of $13 million.

In 1994, the company changed its method of distributing certain corporate expenses to its business segments. As a result, corporate and other charges in the 1994 third quarter included approximately $47 million that, under the previous method, would have been allocated to the business segments. This change had no net income effect, nor did it affect any segment operational trends.

Capital and Exploratory Expenditures

Capital and exploratory expenditures, including the company's share of affiliate expenditures, were $1.042 billion in the quarter, down 5 percent from $1.095 billion spent in last year's third quarter. Total expenditures for the first nine months of 1994 were $3.174 billion, up 10 percent from $2.887 billion spent in the same period in 1993.


CHEVRON CORPORATION - FINANCIAL REVIEW            -1-  

   (MILLIONS OF DOLLARS)

CONSOLIDATED STATEMENT OF INCOME 

  (unaudited) 

                         Third Quarter        Nine Months 

REVENUES:                  1994    1993      1994    1993

 Sales and Other 

  Operating Revenues (1) $9,396  $9,097   $26,203 $27,413

 Equity in Net Income

  of Affiliated Companies   102     108       286     340

 Other Income                11      28       108     416

                          9,509   9,233    26,597  28,169
                          
COSTS AND OTHER DEDUCTIONS: 

 Purchased Crude 

  Oil and Products        4,676   4,384    12,560  13,872

 Operating, Selling and Administrative Expenses           

                          1,928   1,925     5,661   6,427

 Exploration Expenses        91      92       269     235

 Depreciation, Depletion

  and Amortization          626     615     1,833   1,800

 Taxes Other Than 

  on Income (1)           1,405   1,219     4,153   3,583 

 Interest and Debt Expense   93      76       249     244

                          8,819   8,311     24,72  26,161

Income Before Income

 Tax Expense                690     922     1,872   2,008

  Income Tax Expense        265     502       802   1,037

NET INCOME                 $425    $420    $1,070    $971
PER SHARE AMOUNTS  (2)  

NET INCOME               $  .65  $  .64    $ 1.64  $ 1.49

DIVIDENDS               $ .4625 $ .4375  $ 1.3875 $1.3125
Average Common Shares Outstanding (000's)  (2)

                       651,667  651,130   651,656 650,806

EARNINGS BY MAJOR OPERATING AREA  

  (unaudited)             Third Quarter       Nine Months

                            1994   1993       1994   1993

Exploration and Production 

 United States              $ 63 $ 125       $ 339  $ 527 

 International               131   113         376    420

   Total Exploration

   and Production            194   238         715    947

Refining, Marketing and Transportation 

 United States              (110)  164         (54)  (243)

 International                55    50         145    179

   Total Refining, Marketing and Transportation  

                             (55)  214          91    (64)

   Total Petroleum 

    Operations               139   452         806    883

Chemicals                     68     6         143    165

Coal and Other Minerals        6    10          33     38

Corporate and Other  (3),(4) 

                             212   (48)         88   (115)

NET INCOME                  $425  $420      $1,070   $971 (1)  

Includes consumer excise taxes

                         $1,220 $1,030      $3,578 $2,970 (2)  
                         
Shares and per share amounts for 1993 have been restated
to reflect a two-for-one stock split in May 1994. (3) Corporate
and Other includes interest expense, interest income on cash 
and marketable securities, corporate center costs, and real 
estate and insurance activities. (4)  In 1994, the company 
changed its method of distributing certain corporate expenses 
to its business segments. As a result, about $47 million in the 
third quarter and $125 million in the nine months of 1994 are 
classified as Corporate and Other that would previously have 
been distributed to the various business segments.
CHEVRON CORPORATION - FINANCIAL REVIEW                    -2-

     (MILLIONS OF DOLLARS)

 SPECIAL ITEMS BY MAJOR OPERATING AREA

                          Third Quarter   Nine  Months

 (unaudited)                1994   1993   1994    1993 
 U.S. Exploration and

  Production                $(61)  $(32)  $(76)   $(44) 

 International Exploration

  and Production               -    (62)     -     (69)

 U.S. Refining, Marketing 

and Transportation          (218)    (30)  (244)  (648)

 International Refining, 

 Marketing and Transportation  

                               -       1      -     14

 Chemicals                    (4)     (9)    (4)   126

 Coal and Other Minerals       -       -      -      5

 Corporate and Other         301     (13)   301    (46)

   Total Special Items       $18   $(145)  $(23) $(662)

 SUMMARY OF SPECIAL ITEMS Third Quarter   Nine  Months

 (unaudited)                1994   1993   1994    1993 

 Asset Dispositions           $-    $(4)    $-    $149

 Asset Write-offs and 

  Revaluations                 -    (12)     -     (36)

 Environmental Remediation

  Provisions                (267)   (15)  (293)    (68)

 Prior-Year Tax Adjustments  301   (100)   301    (101)

 Restructurings & Reorganizations  -      9      -    (543)

 Other, Net                  (16)   (23)   (31)    (63)

   Total Special Items       $18  $(145)  $(23)  $(662) 
   FOREIGN EXCHANGE 

  (LOSSES) GAINS            $(30)    $9   $(51)    $42
 EARNINGS BY MAJOR OPERATING AREA 

 EXCLUDING SPECIAL ITEMS

 (unaudited)              Third Quarter   Nine  Months

                            1994   1993    1994   1993

Exploration and Production 

 United States              $124   $157    $415   $571

 International               131    175     376    489

   Total Exploration and

    Production               255    332     791  1,060

Refining, Marketing and Transportation 

 United States               108    194     190    405

 International                55     49     145    165

   Total Refining, Marketing

    and Transportation       163    243     335    570

   Total Petroleum

    Operations               418    575   1,126  1,630

Chemicals                     72     15     147     39

Coal and Other Minerals        6     10      33     33

Corporate and Other (1) (2)  (89)   (35)   (213)   (69)

 Earnings Excluding Special

  Items                      407    565   1,093  1,633
Special Items                 18   (145)    (23)  (662)

    Net Income              $425   $420  $1,070   $971

 (1)  

"Corporate and Other" includes interest expense, interest 
income on cash and marketable securities, corporate
center costs, and real estate and insurance activities. 
(2)  In 1994, the company changed its method of distributing 
certain corporate expenses to its business segments. As a 
result, about $47 million in the third quarter and $125 
million in the first nine months of 1994 are classified as 
Corporate and Other that would previously have been 
distributed to the various business segments.



 CHEVRON CORPORATION - FINANCIAL REVIEW               -3- 

  (MILLIONS OF DOLLARS)  CONSOLIDATED BALANCE SHEET         
  September 30,   Dec. 31, 

     (unaudited)                            1994       1993 

 ASSETS:

  Cash and Cash Equivalents               $1,275      $1,644

  Other Current Assets                     7,436       7,038

      Total Current Assets                 8,711       8,682

  Investments and Advances                 3,961       3,623

  Properties, Plant and Equipment-Net     21,717      21,865

  Other                                      605         566

      TOTAL ASSETS                       $34,994     $34,736 
 LIABILITIES: 

  Short-Term Debt                         $4,432      $3,456

  Other Current Liabilities                5,631       7,150

      Total Current Liabilities           10,063      10,606

  Long-Term Debt and Capital

   Lease Obligations                       4,129       4,082 

  Deferred Income Taxes                    3,071       2,916

  Reserves For Employee Benefit Plans      1,565       1,458

  Deferred Credits and Other 

   Noncurrent Obligations                  1,849       1,677

      TOTAL LIABILITIES                   20,677      20,739

       STOCKHOLDERS' EQUITY               14,317      13,997

      TOTAL LIABILITIES AND 

       STOCKHOLDERS' EQUITY              $34,994     $34,736

 CONSOLIDATED STATEMENT OF CASH FLOWS             Nine Months 

    (unaudited)                                  1994   1993 
 OPERATING ACTIVITIES 

  Net Income                                   $1,070   $971

  Adjustments

    Depreciation, depletion and amortization    1,833  1,800

    Dry hole expense related to prior years'

     expenditures                                  43     25

    Distributions less than equity in 

     affiliates' income                           (26)  (170) 

    Net before-tax (gains)losses on asset

     retirements and sales                         (3)   249  

    Net currency transaction losses(gains)         38    (17)

     Net increase in operating working capital (1,820)  (374)

    Deferred income tax provision                 148   (139)

    Other                                         317     65

     Net cash provided by operating activities  1,600  2,410

 INVESTING ACTIVITIES 

  Capital expenditures                         (2,109)(2,227)

  Proceeds from asset sales                       324    719 

  Net (purchases)sales of marketable securities   (13)     - 

  Net cash used for investing activities       (1,798)(1,508)

 FINANCING ACTIVITIES

  Net borrowings of short-term obligations        932    483

  Proceeds from issuance of long-term debt        352    201

  Repayments of long-term debt and other financing 

obligations                                      (542)  (721)

  Cash dividends paid                            (904)  (854)

  Purchases of treasury shares                     (5)    (3)

         Net cash used for financing activities  (167)  (894) 

EFFECT OF EXCHANGE RATE ON CASH AND CASH

  EQUIVALENTS                                      (4)    16  
  NET CHANGE IN CASH AND CASH EQUIVALENTS         (369)    24 
  CASH AND CASH EQUIVALENTS AT JANUARY 1,

  1994 AND 1993                                 1,644  1,292

 CASH AND CASH EQUIVALENTS AT SEPTEMBER 30,

  1994 AND 1993                                $1,275 $1,316 

  CHEVRON CORPORATION - FINANCIAL REVIEW                  -4-
  CAPITAL AND EXPLORATORY EXPENDITURES (1)     

                           Third Quarter      Nine Months 

  (millions of dollars)      1994   1993        1994   1993 

United States

  Exploration and Production $169   $217        $510   $522 

   Refining, Marketing and 

    Transportation            191    254         589    574

   Chemicals                   27     45          60    139

   Other                       41     32         106     69

     Total United States      428    548       1,265  1,304
     International 

   Exploration and Production 412    351       1,318  1,086

   Refining, Marketing and 

    Transportation            191    185         562    460

   Chemicals                    6      8          17     29

   Other                        5      3          12      8

     Total International      614    547       1,909  1,583

     Worldwide             $1,042 $1,095      $3,174 $2,887
     OPERATING STATISTICS (1) 

NET LIQUIDS PRODUCTION (MB/D):

   United States              371    393         372    396

   International              640    564         619    548

     Worldwide              1,011    957         991    944
     NET NATURAL GAS PRODUCTION (MMCF/D):

   United States            2,038  2,033       2,124  2,051

   International              573    470         541    480

     Worldwide              2,611  2,503       2,665  2,531
     SALES OF NATURAL GAS (MMCF/D): 

   United States            2,483  2,296       2,609  2,262

   International              431    463         462    464

     Worldwide              2,914  2,759       3,071  2,726
     SALES OF NATURAL GAS LIQUIDS (MB/D):  

   United States              217    204         204    204

   International               26     35          31     33

     Worldwide                243    239         235    237
     SALES OF REFINED PRODUCTS (MB/D): 

   United States            1,349  1,481       1,334  1,423

   International              930    891         922    897

     Worldwide              2,279  2,372       2,256  2,320
     REFINERY INPUT (MB/D):

   United States            1,265  1,384       1,219  1,308

   International              603    539         622    552

     Worldwide              1,868  1,923       1,841  1,860
     CHEMICALS SALES & OTHER OPERATING 

 REVENUES (millions of dollars)  (2) 

   United States             $836   $662      $2,232 $2,095

   International              174    165         477    447

     Worldwide             $1,010   $827      $2,709 $2,542(1) 
     Includes interest in affiliates.

(2) Includes sales to other Chevron companies. 

Updated: October 1994