'Chevron Corp- UBS Global Oil & Gas Conference
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Paul Siegele, Vice President of Strategic Planning at Chevron, presented at the UBS Global Oil & Gas Conference. He discussed Chevron's strategies to meet long-term energy demand growth, including expanding their upstream portfolio and major capital projects. Chevron has a leading project queue that will increase reserves and production, and their strategic advantages position them for long-term growth and returns.
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'Chevron Corp- UBS Global Oil & Gas Conference
- 1. UBS Global Oil & Gas Conference Paul Siegele Vice President – Strategic Planning © 2009 Chevron Corporation
- 2. Cautionary Statement CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 This presentation 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 the company’s 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 presentation. 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, marketing and chemical margins; actions of competitors or regulators; timing of exploration expenses; timing of crude-oil liftings; 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, severe weather or crude-oil production quotas that might be imposed by OPEC (Organization of Petroleum Exporting Countries); the potential liability for remedial actions or assessments 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; gains and losses from asset dispositions or impairments; government-mandated sales, divestitures, recapitalizations, industry-specific taxes, changes in fiscal terms or restrictions on scope of company operations; foreign currency movements compared with the U.S. dollar; 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 pages 30 and 31 of the company’s 2008 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 presentation 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 presentation 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. © 2009 Chevron Corporation 2
- 3. Key Points Industry will be challenged to meet long term energy demand We have the right strategies to profitably deliver long term growth Our exploration success is unmatched Our project queue is industry-leading We are well-positioned for growth and performance © 2009 Chevron Corporation 3
- 4. Long-Term Global Energy Demand Million Barrels of Oil Equivalent Per Day 85% increase 2030 19% increase Renewables Nuclear 2030 Coal 2005 2005 Gas Liquids OECD Non-OECD © 2009 Chevron Corporation Source: DOE EIA 2008 International Energy Outlook 4
- 5. Long-Term Oil Supply Challenge Million Barrels Per Day 120 - EIA 2008 100 - Demand 2015 2030 Range 80 - 30 – 45 70 – 100 60 - MMBD MMBD 40 - 20 - 4 – 7% Existing Capacity Production 0- Decline 2007 2015 2030 © 2009 Chevron Corporation Source: 2008 Updated NPC Global Oil and Gas Study 5
- 6. Strategic Continuity Upstream: Grow profitably in core areas Develop and build new legacy positions leading Gas: Commercialize our equity gas resource integrated base while growing a high-impact global business positions in Downstream: Improve returns and selectively grow with a focus on integrated value creation growth areas of the world Renewables: Invest in renewable energy technologies and capture profitable positions © 2009 Chevron Corporation 6
- 7. 2009 Investment Priorities Advance growth initiatives $ 22.8 Billion Maximize cost reductions for projects in evaluation and FEED 2009 C&E Budget Adjust pace of spending on upstream base business Sustain downstream reliability and improve feedstock flexibility © 2009 Chevron Corporation 7
- 8. Advantaged Downstream Pacific Rim Position North America Asia-Pacific Major % of Liquids % of Chevron Refineries 65 Demand Growth 80 Refining Capacity © 2009 Chevron Corporation Source: EIA June 2008 International Energy Outlook and Company Data 8
- 9. Downstream Investments to Reduce Cost and Increase Efficiency Safe & Reliable Operations Reduce Incident Costs Flexibility Reduce Raw Material Costs © 2009 Chevron Corporation 9
- 10. Strong Worldwide Upstream Portfolio North America Europe, Eurasia & Middle East 750 MBOED 650 MBOED Asia-Pacific 700 MBOED Africa & Latin America 600 MBOED Areas of 11.2 BBOE 2.7 MMBOED Operation Proved Reserves Net Production Capacity © 2009 Chevron Corporation 10
- 11. Superior Exploration Performance Resource* Replacement Through Exploration 2002 – 2007 Percent Replacement 120 100 106 % 80 60 40 20 0 * Wood Mackenzie resource replacement metric does not reflect the Company’s reported proved reserves. It is the Wood Mackenzie estimate of commercial plus sub-commercial reserves, as a percentage of production. © 2009 Chevron Corporation Source: Wood Mackenzie Corporate Benchmarking Tool, updated December 2008 11
- 12. Industry-Leading Upstream Project Portfolio ACG II-III Tengiz Expansion AOSP Expansion 1 Karachaganak III Rosebank AOSP Expansion 2 Tengiz Future Expansion Lochnagar Amauligak Hebron Piceance Blind Faith Petropiar Tahiti Chuandongbei Upgrader Perdido Delta Caribe Platong II Big Foot Vietnam Gas Jack/St.Malo North Duri Gendalo-Gehem Tubular Bells Frade Agbami Papa Terra Nigeria GTL Usan Moho-Bilondo Bonga SW/Aparo NWS Train 5 Tombua-Landana Nsiko Greater Gorgon Angola LNG Olokola Wheatstone All projects shown are Lucapa > $1B Chevron share Nigeria EGP3A Browse © 2009 Chevron Corporation 12
- 13. Major Capital Project Production Growth Major Capital Project Net Production MBOED 750 650 500 453 250 153 44 0 2007 2008 2009 2010 © 2009 Chevron Corporation 13
- 14. Next Project Wave To Increase Reserves and Production Tahiti – Deepwater GOM • Achieved first oil in May 2009 • Full capacity of ~135 MBOED by end of 2009 • Estimated recoverable resources: 400-500 MMBOE Frade – Deepwater Brazil • Startup expected during 2H 2009 • Peak oil production of 90 MBD in 2011 • Estimated recoverable resources: 200-300 MMBO Tombua-Landana – Deepwater Angola • Startup expected during 2H 2009 • Peak oil production of 100 MBD in 2011 • Estimated recoverable resources: 350 MMBO © 2009 Chevron Corporation 14
- 15. Future Legacy Development Australia LNG Gorgon LNG Facility Existing Pipeline Planned Pipeline Expect FID during 2009 Io/Jansz 3 Train LNG development Wheatstone Wheatstone Gorgon North West Preferred onshore location Shelf selected Barrow Island Expect FEED during 2009 Karratha 2 Train LNG development Onslow Ashburton North © 2009 Chevron Corporation 15
- 16. Final concept design Future Legacy Development figure pending Lower Tertiary Trend – Gulf of Mexico Jack/St. Malo Entering FEED Hub co-development in 7,000' water depth Jack 9 miles Facility production capacity – 120 - 150 MBOED St. Malo © 2009 Chevron Corporation 16
- 17. Chevron’s Strategic Advantages Exploration Technology Focused Leader Leader Downstream Large Top Resource Talent Base Top Project Queue © 2009 Chevron Corporation 17
- 18. Delivering Long-Term Results Five-Year Total Stockholder Return as of March 31, 2009 12.5% 12.3% 4.8% 3.2% 0 -0.8% S&P 500 -4.8% © 2009 Chevron Corporation 18
- 19. Discussion © 2009 Chevron Corporation