Chevron News - 2007

News summaries from company press releases and from unaffiliated news agencies are provided below. The summaries are sorted by month and are further categorized as upstream news, downstream news, and business/finance news.

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January

• Upstream news: ­

- The Bush administration, accused of failing to collect billions of dollars from companies that drill for oil and gas in federal waters, announced that it would demand higher royalties on all new deepwater leases in the Gulf of Mexico. ­

- Venezuelan President Hugo Chavez recommended that the state take control of natural gas projects as part of his intensified program of nationalization. Venezuelan law allows foreign companies to own gas projects in the country, but Chavez proposed a legislative change. Taking control of the gas sector could affect companies such as Chevron Corp. and Norwegian petroleum company Statoil. ­

- Honduras will take temporary control of foreign-owned oil storage terminals as part of a government import program meant to drive down fuel prices, President Manuel Zelaya said. Mr. Zelaya ordered the move after failing to reach a deal with the big oil companies . ­

- Venezuela will end negotiations with foreign oil companies over how it will take a majority control of their operations along the Orinoco River, the country's oil minister, Rafael Ramírez, said. Mr. Ramírez said that ''there's no possible negotiation'' with the foreign companies, but he said that private companies would be allowed to own minority stakes in lucrative oil projects in the Orinoco River basin. ''Every case will be different,'' Mr. Ramírez said. ''We will have an effective majority control.'' The government negotiated last year with the companies about its plans to take majority control of oil operations in the country, but no agreements were reached. In a speech to Congress last week, President Hugo Chávez said the private companies -- BP, Exxon Mobil, Chevron, ConocoPhillips, Total and Statoil -- would be given the option to stay on as minority partners. Mr. Chávez also announced plans to nationalize companies within Venezuela's telecommunications, electricity and natural gas industries. The government has already taken majority ownership of Venezuelan oil-producing operations outside the Orinoco region through joint ventures controlled by the state oil company. ­

- National Renewable Energy Laboratory struggles to survive with limited funding that is less than it was at beginning of Bush administration; Congress pledges more money for research but nation's committment to alternative fuel sources and energy independence is more talk than action; renewable energy supplies only 6 percent of country's needs; lab continues work despite shortage of research funds. ­

- Chevron Corporation announced that its subsidiary Cabinda Gulf Oil Company Limited (CABGOC) and partners achieved a significant oil discovery in deepwater Block 14, offshore Angola. The discovery well, Lucapa-1, was drilled in October 2006 in 3,940 feet (1,201 meters) of water to a total vertical depth of 10,958 feet (3,340 meters) and encountered more than 280 net feet (85 net meters) of oil in Miocene-age sands. The well was tested in November at commercial rates from high- permeability sand in the main target area. The discovery will be followed by further drilling in addition to geologic and engineering studies to appraise the field and assess its potential reserves. The Lucapa discovery is the 10th exploration discovery made in Block 14 since 1997.

• Downstream news: ­

- Chevron Richmond Refinery emergency response personnel are responding to a fire. Chevron has contacted the appropriate local emergency response organizations, including the Refinery's own fire department which has responded to the incident. One minor injury has been reported at this time, and there have been no serious injuries. Information concerning the extent of the incident and the amount of damage will be made public as it becomes available. ­

- Chevron Richmond Refinery officials report that a fire within the crude separating unit has been contained and Contra Costa Health Services at 8:40 a.m. PST lifted their shelter-in-place for local residents. The fire occurred at approximately 5:15 a.m. PST and was responded to by Chevron's own fire department and local emergency services. The fire was contained at 7:50 a.m. PST and is now being allowed to extinguish itself. ne employee sustained minor burns and has been treated and released from the hospital. The employee has since returned to work. The cause of the incident is under investigation. ­

- Chevron issued the following statement: Chevron Richmond Refinery officials report that a fire at its crude unit was extinguished at 2:10 p.m. PST. Chevron firefighters will continue to monitor the area overnight. hevron sampled the air throughout the community during the incident, and initial indications are that there was no adverse air quality impacts associated with the fire. The cause of the incident is under investigation. ­

- A Chevron refinery fire sent flames as high as 100 feet into the air, but was quickly contained and was not expected to affect production, officials said. "It looks like the fire is contained to a small area in the crude unit," where the fire started, said Tony Semenza, executive director of Contra Costa County's emergency response, who estimated the maximum height of the flames at 100 feet. Chevron officials said the fire was extinguished Monday afternoon. He said Chevron was investigating the cause of the incident. County officials early Monday recommended that residents stay in their homes, but lifted the warning after three hours when no toxic substances were detected in the air around Richmond. A worker suffered first-degree burns to his neck and was treated at a hospital and released, company spokesman Walt Gill said. A notice that Chevron filed with the California emergency services office said the flames broke out at the refinery's No. 4 crude unit. The refinery area overlooks a scenic section of San Francisco Bay to the east of San Francisco and northwest of Berkeley and Oakland. Toll collectors at the nearby Richmond-San Rafael Bridge were briefly evacuated as a precaution and drivers were allowed a rare free trip over the bridge to Marin County, said Merlin Turner, battalion chief for the Richmond Fire Department. The Chevron Richmond refinery, which is more than 100 years old, has a production capacity of 243,000 barrels a day. ­

- Chevron Products Co. issued a preliminary investigation report of the fire that occurred on Monday, Jan. 15, 2007, in the crude unit at the Richmond Refinery. The company is coordinating with Cal/OSHA and Contra Costa County in the ongoing investigation. Preliminary findings include: • The incident began at approximately 5:18 a.m. PST. • Chevron notified Contra Costa County Emergency Services of the Level 2 incident at 5:22 a.m. PST. Chevron elevated the incident to a Level 3 at 5:30 a.m. PST, immediately activating the community alert system. • To date, analysis conducted of air sampled throughout the community provides no evidence of adverse air-quality impacts associated with the fire. • One employee was treated onsite and transported to an outside hospital for minor burns. The employee was treated and released to return to work the same day. Another employee received onsite treatment for a minor skin irritation and did return to work on the same day. ­

- President Bush is expected to call for increase in amount of ethanol that refiners mix with gasoline in his State of the Union address; details of proposal are unknown; ethanol manufacturers are forming alliances and partnerships with oil companies to take advantage of public support for ethanol and become powerful force in politics; critics say ethanol-based industry may do more harm than good. ­

- Royal Dutch Shell said that it would sell its Los Angeles refinery and related assets to the Tesoro Corporation.Separately, Tesoro said the purchase price was $1.63 billion, plus the value of oil inventory at closing. The chief executive, Bruce A. Smith, said the purchase would give Tesoro earnings growth even as it faces flatter gasoline margins. The deal includes 250 service stations in and around Los Angeles and San Diego as well as supply agreements. Tesoro expects to complete the deal in the second quarter of 2007. The agreement follows Shell’s decision to sell its three French refineries and a refinery in the Dominican Republic. The market for refineries has been strong in the last two years — after two tough decades for the industry — as refining margins improved. Other major oil companies, including BP and Chevron, are also shedding refineries, a move that analysts interpret as a sign they think the “golden age of refining” of the last two years is coming to an end.

• Business/Finance news: ­

- Following his doctor's advice, Gov. Arnold Schwarzenegger canceled plans to attend a pair of events that are part of his two-day inaugural celebration. In taking the step, Schwarzenegger's office is acknowledging that his broken leg may interfere more with his schedule than aides previously had suggested. The governor, who has barely been out in public since he fractured his right femur while skiing Dec. 23, was supposed to appear at an inauguration kickoff on the Capitol lawn. He also had been scheduled to greet donors who have underwritten his inaugural parties at a private reception. The governor's accident may disappoint donors who hoped to see him at an exclusive "sponsor's reception." Political aides had sent out invitations offering potential donors a certain number of tickets to the closed-door reception based on the amount they contributed to defray the cost of the inaugural festivities. "Gold" sponsors, who kicked in at least $50,000 each, were offered 10 tickets. "Silver" sponsors who gave at least $15,000 were offered two tickets to the reception. Those who gave $50,000 include Chevron, the California Chamber of Commerce, and the California Real Estate Political Action Committee. ­

- The electric car, derided as impractical by automakers since General Motors Corp. pulled the plug on its revolutionary EV1, is staging a comeback amid lofty fuel prices and persistent worries about the nation's dependence on imported oil. In addition, Ford Motor Co. will unveil a hydrogen-powered electric car concept of its own and Toyota Motor Corp. is ready to announce major improvements in the batteries used in its popular Prius gasoline-electric hybrid. The enhancements could extend the five-seat sedan's all-electric range and boost overall fuel economy to as much as 90 miles per gallon. Toyota won't comment on its plans, but GM executives said last month that they believed electric power — from onboard generators, hydrogen fuel cells and even household current — would drive most vehicles of the future. Ford's concept is similar to the vehicle GM will unveil, an electric car that powers its drive system with a generator. But Ford has started with an advanced emission-free system. It produces power by converting hydrogen and oxygen into electricity in a small fuel cell mounted under the passenger compartment. GM's system, though it can be adapted to run on fuel cells, uses a gasoline-burning internal combustion engine to generate energy for the electric drive. Production of the cars for the retail market depends on advances in battery technology to increase the amount of energy they can store. And, in Ford's case, further work in fuel cells as well as the development of a nationwide hydrogen fuel distribution system would be needed. A Ford insider said its fuel cell could be replaced with a gasoline or diesel generator to get to market earlier. On Thursday GM announced a battery development deal with Johnson Controls Inc. and Chevron Corp. The companies hope to produce advanced batteries capable of storing enough energy to allow a gasoline-electric hybrid to be recharged from a residential power outlet and run at highway speeds in all-electric mode for 30 miles or more. The car's batteries initially would be recharged overnight at an owner's home, and the generator would not start operating until the storage batteries had been depleted. For a driver with a 20-mile round-trip commute, the car might use gasoline only on longer weekend and vacation trips. It would be the first of a family of electric-powered cars and trucks that would use onboard generators fueled with diesel, pure ethanol or bio-diesel produced from vegetable matter, he said. Ultimately, such a vehicle would use a fuel cell that converts hydrogen and oxygen to electricity. The cars' electric drive system is a "direct descendant" of the system developed for the EV1, said Nick Zielinski, chief engineer for the E-flex project. ­

- Chevron Corp. issued its interim update for the fourth quarter of 2006. Relative to record third quarter earnings, the company expects results in the fourth quarter to be adversely affected by lower commodity prices, lower Downstream margins and lower refinery utilization attributable to planned maintenance and construction activities worldwide. ­

- Hugo Chavez spoke, and investors smelled sulfur. Stocks fell sharply in his own country and across Latin America as markets felt the effects of the Venezuelan president's nationalization plans for three key industries. Chavez announced his intent to take control of businesses in telecommunications, electricity and oil that have sizable U.S. investments. The IBC index of the Caracas Stock Exchange plunged 18.7% on Tuesday. Trading in shares of the nation's largest telephone company, popularly known as CANTV, was suspended for two days after they fell 30% in Tuesday morning trading. EDC, the electric power company serving Caracas, the capital, fell 20%. The Caracas exchange, which soared 156% last year, had hit an all-time high before Chavez's announcement. In the U.S., companies with stakes in the affected sectors declined to comment, given the lack of specifics from Chavez, who will be sworn in for a third term and is expected to elaborate on his proposals. CANTV is 28.5% owned by Verizon Communications Inc. of New York, and EDC is 86% controlled by AES Corp. of Arlington, Va. Also in the dark are energy companies Chevron Corp. of San Ramon, Calif., and Texas giants Exxon Mobil Corp. and ConocoPhillips, which have invested billions of dollars in the so-called Orinoco belt, a massive oil field in eastern Venezuela. Venezuela accounts for about 2% of worldwide oil production for Chevron and 5% for ConocoPhillips. Analysts generally expressed caution as they too awaited more information. But Morgan Harting, a senior director at Fitch Ratings in New York, saw reason for longer-term concern, citing the pressures of Venezuela's 50% growth in public spending last year and the prospect of falling oil prices. Markets also were jolted by Chavez's announcement that he would seek to end the autonomy of Venezuela's central bank and that he would ask the congress for special powers giving presidential decrees the force of law. With 100% control of the National Assembly, whose approval he needs, there is little doubt Chavez will prevail. Chavez is a nemesis of the U.S. and of President Bush. He likened Bush to the devil in a speech at the United Nations in September, saying he had left a lingering smell of sulfur at the podium the day before. CANTV, Venezuela's largest privately held company, issued a statement Tuesday asking Chavez to offer details and saying it had received no formal notice of the government's intentions. The nationalizations would seem to quash Verizon's pending deal, signed last year, to sell its controlling stake in CANTV to AmericaMovil and Telmex, companies owned by Mexican billionaire Carlos Slim Helu. The news dragged Mexico's main stock market index down 1.9% on Tuesday. Elsewhere in Latin America, Colombia's market plunged 4.8%, the Argentine market slid 2.7% and Brazil's main index dropped 1.9%. Venezuelan bonds also fell in value, although analysts seemed to believe there was little chance that Chavez in the near term would default on the nation's $27 billion in outstanding foreign debt. They said the country was flush with an estimated $45 billion in reserves from oil sales and that Chavez had an excellent debt payment record, even during the attempted coup and general strike in 2002 and 2003, which crippled the economy. Longer term, the picture is murkier. ­

- President Nursultan A. Nazarbayev appointed another loyalist, Karim Masimov, as prime minister, to replace Daniyal Akhmetov, who resigned. Mr. Masimov, a deputy prime minister and economist who has studied in the United States, promised continuity for his former Soviet state, where world powers are competing for access to huge energy reserves. His moves will also be closely watched by Western oil giants like Chevron, Eni and Shell, which have invested billions of dollars in Kazakh energy projects. ­

- The nation's oil and gas companies, hoping to fend off an attack by Congress on their tax breaks and subsidies, angrily denounced an effort by House Democratic leaders that would repeal billions of dollars worth of incentives and plow the money into renewable energy projects. ­

- House Democrats, brushing aside objections from the Bush administration, said that they had ample votes to pass a bill that would eliminate $14 billion in subsidies and tax breaks for oil companies and channel the money to renewable-energy projects. ­

- Oil companies embraced Gov. Arnold Schwarzenegger's new executive order to fight global warming by boosting the consumption of alternative fuels and cutting carbon emissions from car and truck exhausts by 10% over the next 13 years. The order is a key component of last year's global warming law, which seeks to reduce emissions of carbon and other greenhouse gases by 25% by 2020. Environmental activists continue to strongly support the initiative. But the enthusiasm for the governor's action by the oil industry is in sharp contrast to its groans about last year's landmark legislation. Schwarzenegger unveiled his fuel standard proposal during last week's annual State of the State speech. He said then and now that California must become a leader in combating global warming to fill a void created by the inaction of the administration of President Bush. Schwarzenegger predicted that his initiative would put more than 7 million alternative or hybrid vehicles on California roads by 2020, reducing the demand for gasoline and diesel fuel by 3.2-billion gallons a year. Oil companies, which opposed last year's global warming law, now say they're happy to be on the governor's team. They say they like Schwarzenegger's market-friendly approach of allowing petroleum refiners and companies that develop clean alternative fuels to compete for the motoring public's business. They also are enthusiastic at being able to buy and sell credits that would be earned by exceeding state requirements for reducing the carbon content of fuels. Alternative fuels such as ethanol or hydrogen have a place alongside clean-burning gasoline and diesel fuels at service stations. Pete Montgomery, the chief California lobbyist for another oil giant, London-based BP, said he's "cautiously optimistic" about the governor's fuels order. "He's not mandating that specific fuels be sold; he's not picking and choosing winners and losers and he's not deciding today what the answer is for 2020," he said. BP markets gasoline in California under the Arco brand. Electricity generators, meanwhile, also said they're eager to compete in the vehicle fueling business. "Southern California Edison sees electricity as one of the alternative fuels that will help achieve this standard," said John Fielder, president of the Rosemead-based utility. Edison, a unit of Edison International, serves 13 million customers in Los Angeles and Orange counties, the Inland Empire, the Central Coast and San Joaquin Valley. Fielder predicted that up to 60% of the planned carbon reduction could come from drivers switching in the near future to so-called plug-in hybrid cars that run on electric and gasoline motors and can be recharged from household AC outlets. "We have the infrastructure in place to deliver fuel to cars, without building a new power plant," he said. ­

- Shares in Venezuela's largest telephone company plunged after President Hugo Chavez said the government would take control of it before compensating private owners, including Verizon Communications Inc., for the hundreds of millions of dollars they have invested in the enterprise. Chavez announced this month that his government would nationalize Compania Anonima Nacional Telefonos de Venezuela, or CANTV, and Electricidad de Caracas, the Venezuelan capital's largest power provider, which is controlled by AES Corp. of Virginia. It was unclear from Chavez's statement, made during "Alo Presidente" ("Hello President"), his Sunday-afternoon television talk show, whether the takeover would happen before or after the expiration in May of the license held by its owners. The management of CANTV, which was privatized in 1991, says it has not been served with official notice of a takeover. Shares of the company fell 11% on Monday on the Caracas Stock Exchange. New York-based Verizon, which owns 28.5% of CANTV, had agreed to sell its interest in the utility to Mexican billionaire Carlos Slim Helu for $667 million in a deal announced in 2005. The status of that sale remained unclear. Chavez also announced this month that the government would assume control of four major oil projects in eastern Venezuela. ConocoPhillips, Exxon Mobil Corp. and Chevron Corp. of the United States, Total of France and Statoil of Norway have invested billions in the so-called heavy-oil projects. The president also announced Sunday that he would raise the price of gasoline, which is heavily subsidized, from 18 cents a gallon, but he did not say when or by how much. The gasoline price hike would be the first since 1997; in his successful presidential campaign in 1998, Chavez promised not to raise gasoline prices. Chavez also said he would seek to raise taxes to finance economic development projects directed by community councils. The grass-roots governing bodies, which work hand in hand with a new generation of worker-owned cooperatives, are a key element in his "socialism for the 21st century." Chavez is transferring ownership of thousands of state-owned assets — as diverse as steel factories, repossessed hotels and toll roads — to the cooperatives. His announcements came as falling crude oil prices could be cramping lavish public spending programs designed to redistribute the nation's energy wealth to benefit the poor. In addition to spending hundreds of millions of dollars for subsidized retail goods through the Mercal retail chain and capitalizing the worker-owned cooperatives, Chavez has promised to build or help build five foreign refineries, costing billions each. The tax increases would apply to wealthy individuals, banks, property owners and companies. Luxury taxes would be applied to second homes, yachts, airplanes and artwork. ­

- "Chevron applauds the President, as well as the U.S. Congress, for approaching energy security as a strategic issue for the country. We look forward to working with the Administration and Congressional leaders in both parties on these critical issues. "The President's objective of enhancing America's energy security is the right one. It recognizes the interconnection of global energy markets and the need for a comprehensive, integrated U.S. energy policy. It is also a balanced approach that recognizes the need for more renewable and alternative energy, as well as increased domestic oil and natural gas production, and enhanced energy efficiency. "Chevron believes the best path toward energy security is a diversified energy portfolio that includes the environmentally-responsible development of domestic oil and natural gas, expanded development of clean coal and nuclear, and the economic development of biofuels. Our nation will need all the clean energy we can economically develop to continue driving economic growth and providing secure, reliable and affordable energy to American consumers. "The company supports increasing the volume of renewable fuels in America's transportation fuel portfolio. Our company is already pursuing advanced research in cellulosic conversion technology necessary to enable second-generation ethanol to be produced at commercial scale, and we look forward to working with the federal government and other partners to continue that research. To achieve the President's goals for renewable fuels, we will need to move beyond the production of corn-based ethanol. It will require new technology enabling new processes. The President's plan wisely calls for 'safety valves' acknowledging these economic and technological hurdles. "Lastly, we recognize and support the goal of improving energy efficiency throughout the U.S. economy, including the transportation sector. We have a long history of working with the auto industry to create cleaner more efficient fuels and we will continue to support efforts to make the U.S. auto and light vehicle fleet more fuel efficient." ­

- Chevron Corp. announced a $10 million contribution to the U.S. Institute of Peace (USIP), an independent, nonpartisan organization specializing in the resolution of international conflict and the promotion of peace building worldwide. The $10 million contribution from Chevron will help construct the Institute's new permanent headquarters to be built at the northwest corner of the National Mall in Washington, D.C. The headquarters will serve as a national center of excellence for research, education, training policy and program development on international conflict prevention, management, and resolution. USIP will name the Great Hall in its new headquarters the George P. Shultz Great Hall, in honor of the former U.S. secretary of state. In addition, the theater planned for the Institute's Public Education Center will be named the Chevron Theater. ­

- The Board of Directors of Chevron Corporation declared a quarterly dividend of 52 cents per share. The dividend is payable March 12, 2007, to holders of common stock as shown by the transfer records of the Corporation at the close of business February 16, 2007.

February

• Upstream news: ­

- Venezuelan President Hugo Chavez set a May 1 deadline for the world's biggest oil companies to surrender control of multibillion-dollar crude oil projects, accelerating his raft of nationalizations. Oil Minister Rafael Ramirez said the state would seize the Orinico Belt fields if the deadline was missed, threatening U.S. companies such as Chevron Corp., Exxon Mobil Corp. and ConocoPhillips, British firm BP and Norway's Statoil. In Washington, the White House said it hoped that U.S. companies would be treated in accordance with international regulations. ­

- Occidental Petroleum Corp. said it wouldn't meet supply commitments to its customers after a fire that idled most output from its Elk Hills field near Bakersfield. The Westwood-based company has called a force majeure, a provision declared when an event beyond a supplier's control prevents it from meeting its contract obligations, spokeswoman Jan Sieving said Thursday. A natural-gas pipeline leak caused the fire Tuesday and led to the field's shutdown. There's no time estimate for restarting production at the field, which normally has output equivalent to 120,000 barrels of oil a day, Occidental spokeswoman Susie Geiger said. About 95% of output is shut down. The fire, which injured four contract workers, was caused by a leak in a gas-gathering pipeline, Geiger said Wednesday. About 60% of Elk Hills' output is oil. Elk Hills is the seventh-largest oil field in the continental U.S., and it was unclear Thursday what the shutdown would mean to refinery operations in the Western U.S. Occidental operates the field and owns a 78% interest. The company acquired its stake in the field in February 1998 for about $3.5 billion from the U.S. government. Chevron Corp. owns the remaining 22%, Sieving said. The shutdown of the field idled the 550-megawatt, gas-fueled Elk Hills power plant, which is jointly owned by Occidental and Sempra Energy, said Sempra spokesman Art Larson. The incident disrupted the supply of gas to the plant, which is in the middle of the Elk Hills field, he said. ­

- Chevron intends to bid for assets of Yukos, the bankrupt oil producer, Russian officials said. If Chevron succeeds, such an acquisition could help close the final chapter on the downfall of Russia's largest oil company. Chevron, based in San Ramon, Calif., declined to comment on the assertion. ­

- Chevron Corporation announced that its subsidiary Chevron Australia Pty Ltd has been awarded the exploration rights to acreage in the highly prospective Greater Gorgon Area located off the northwest coast of Australia. Chevron Australia will be the operator of the block and will hold a 50 percent interest; the Australian subsidiaries of ExxonMobil and Shell will each hold a 25 percent interest.

• Downstream news: ­

- Angola LNG Limited confirmed two significant accomplishments in its work with the Government of Angola to complete the conditions necessary to sanction development of the Angola LNG Project. Specifically, in January the Minister of the Ministry of Urbanism and Environment issued the "Licenca Ambiental de Instalacao" that approves the Environmental, Social, and Health Impact Assessment (ESHIA). The Council of Ministers also endorsed the enabling legislation and project agreements necessary to develop the Project and submitted these to the National Assembly for legislative authorization. Mr. Manuel Vicente, Chairman of Sonangol EP, expressed his appreciation to the Angola LNG sponsors for the excellent work that had been developed and for their continued support of Angola LNG. Mr. Vicente also expressed the recognition that the Project will bring strategic benefits to Angola as the largest single investment in country. Mr. Syanga Abilio, Chairman of Angola LNG, noted the Project continues to place great importance on stimulating Angola's economy and creating new employment opportunities for Angolans. Mr. Abilio, on behalf of the consortium, also expressed satisfaction for the continuous support Angola LNG had been receiving from the Angola Government. Angola LNG Limited also confirmed the award of two contracts in its continuing preliminary development program: a contract for preparation of the plant site in Soyo, Angola to the joint venture of Boskalis International BV – Jan de Nul Dredging Ltd, and a contract for advance engineering and procurement to Overseas Bechtel, Incorporated ­

- Chevron Corporation announced that it has received approval from the Federal Energy Regulatory Commission (FERC) to build the proposed Casotte Landing regasification facility in Jackson County, Miss., adjacent to the Chevron Pascagoula Refinery. The proposed Casotte Landing project would process liquefied natural gas (LNG) for distribution to industrial, commercial and residential customers in Mississippi, Florida and the Northeast. The facility would have a nominal processing capacity of 1.3 billion cubic feet per day (Bcf/d) of natural gas, enough natural gas to provide energy to 1.6 million homes daily. ­

- Contra Costa County's plan to salvage more sewer and storm drain water for use at the Chevron refinery could save an extra 5 million gallons of drinking water each day, regional water officials said. A plant to be built on Chevron's property by next year would filter about 8 million gallons of wastewater daily for landscaping use. The county now channels about 3 million gallons of treated wastewater to the Chevron facility each day, with the remainder coming from fresh drinking water sources. The 8 million gallons saved equals the amount of drinking water used each day by about 25,000 families of five. About 400,000 water customers in counties east of San Francisco Bay could face mandatory water rationing in coming months because of light rainfall and a thin snowpack in the Sierra Nevada this winter.

• Business/Finance news: ­

- Chevron Corporation reported preliminary net income of $3.77 billion ($1.74 per share - diluted) for the fourth quarter 2006, compared with $4.14 billion ($1.86 per share - diluted) in the 2005 fourth quarter. For the full year 2006, net income was $17.14 billion ($7.80 per share - diluted), an increase of 22 percent from $14.10 billion ($6.54 per share - diluted) in 2005. ­

- Chevron Corp. joined the oil industry's record-earnings club for 2006, posting annual profit of $17.1 billion, but fourth-quarter income sagged with energy prices. David O'Reilly, chief executive of the San Ramon, Calif.-based company, said that oil and natural gas production, which was little changed from 2005, would fall in 2007. Contributing to the decline is Venezuela, where Chevron's output plunged after President Hugo Chavez's government assumed bigger stakes in two major oil fields. Analysts were generally upbeat about Chevron's prospects for the year, but they said the company's next challenge was getting production out of existing discoveries. "Where do they invest? Venezuela? They don't want to invest in Nigeria, a very unsafe place to be. Iraq is almost radioactive. You are not allowed to go to Iran. You can't go to Russia. And Saudi Arabia is absolutely not open for business. So they play in the very risky deep geological situation in the Gulf of Mexico," said Fadel Gheit, senior energy analyst for Oppenheimer & Co. Gheit was referring to Chevron's discovery, announced in September, of a potentially huge source of oil in the Gulf of Mexico. Chevron also has had problems getting approval for its $8.2-billion Gorgon liquefied natural gas project in Australia. O'Reilly also said natural gas production would drop in 2007 because of a labor dispute in Kazakhstan that has delayed construction of the $5.6-billion Tengiz gas-injection project. O'Reilly said output would fall from the equivalent of about 2.7 million barrels of oil a day to about 2.6 million barrels a day. O'Reilly called 2006 "a year of record earnings, the attainment of several significant milestones, the completion of the integration of the former Unocal operations, improved operating performance and excellent shareholder returns." Chevron acquired Unocal Corp. in 2005. Chevron's third straight year of record profit came on the heels of other remarkable earnings for the industry, driven by soaring energy prices. Exxon Mobil Corp. on Thursday posted 2006 profit of $39.5 billion, the largest ever recorded by a public company. Oil-company earnings have been slammed as outrageous by consumer advocates. Chevron posted fourth-quarter net income of $3.8 billion, or $1.74 a share, down from $4.1 billion, or $1.86 a share, in the year-earlier quarter. Fourth-quarter revenue fell to $47.7 billion from $53.8 billion a year earlier. The $17.1 billion the company earned for the year was 21% above the $14.1 billion it made in 2005. Revenue hit $210.1 billion in 2006, up 6% from $198.2 billion a year earlier. Chevron shares fell 43 cents to $74.04. ­

- The Chevron Corporation's fourth-quarter profit fell by 9 percent as energy prices declined, but the company still ended up with its third consecutive year of record earnings. Chevron said Friday that it made $3.77 billion, or $1.74 a share, during the final three months of 2006. ­

- Energy stocks have been going gangbusters. Except for those that haven't. Shares of Exxon Mobil and Chevron have both risen more than 20 percent over the last 12 months, but many of the companies that sell equipment and services to the major oil producers haven't fared nearly so well. ­

- New York State moved to sue Exxon Mobil and four other companies on Thursday to force them to clean up a half-century-old spill of millions of gallons of oil lying under the Greenpoint neighborhood in Brooklyn and to repair environmental damage inflicted on nearby Newtown Creek. ­

- With dwindling oil supplies, pollution concerns and the ever-present threat of gas prices soaring again, talk of new and better ways to fuel our cars, heat and cool our homes and power our factories has never been greater. What's more, the conversation is emanating increasingly from a source that's been surprisingly quiet until recently — the oil companies themselves. When some of the industry's top executives gather in Houston this week to discuss global energy challenges, finding new and more effective ways to produce oil and gas — as well as alternatives to fossil fuels — will dominate the discussion. And, as the year progresses, expect to see industry leaders speaking in cities across America in an unprecedented campaign to educate the public on energy-related issues and discuss such topics as ethanol and renewable fuels. It's also an opportunity for the companies to polish their images. Why now? The reasons are varied, but increased public and congressional scrutiny of oil companies because of up-and-down gasoline prices and record profits certainly is a factor. The companies' own bottom lines also play a key role: The cost of finding and tapping new oil and gas reserves is on the rise while the worldwide appetite for energy is only getting bigger. At CERA's annual weeklong conference that begins today, dozens of the industry's heaviest hitters — including the chairmen of Exxon Mobil Corp. and Chevron Corp. and a top official of the Organization of the Petroleum Exporting Countries — will discuss topics such as supply and demand and initiatives to develop new sources of energy. Already, the discourse is in full swing across the country, led by some unlikely figures. John Hofmeister, head of Royal Dutch Shell's U.S. arm, and James Mulva, ConocoPhillips' chairman and CEO, are taking part in separate speaking tours with other representatives of their companies, talking and listening at town hall meetings in such places as Edwardsville, Ill., and Little Rock, Ark. Outlining his company's 35-city tour recently, Mulva acknowledged that he and others have traditionally done a poor job of conveying to the public how their businesses operate, the challenges they face and the advances they're making. Often, the public's main connection with oil companies comes from filling up cars at the gas station or, recently, reading headlines of record profits. For example, Exxon Mobil this month shattered its own record for the largest annual profit by any public company, bringing in $39.5 billion. And ConocoPhillips reported its best-ever full-year earnings, $15.5 billion for 2006. But what is generally unknown, Mulva said, is that U.S. oil companies have invested $11 billion in North America on renewable and other forms of energy in the last five years. The task of weaning Americans and the rest of the world off fossil fuels will be monumental and lengthy. Renewable energy sources such as wind and solar supply only about 6% of the U.S.' energy needs, according to the U.S. Energy Information Administration. That figure is expected to grow only to about 7% in the next 20 years, the agency forecasts, meaning fossil fuels will still carry the bulk of the load. Mulva said all types of efficient energy sources are needed, but market forces and consumer preferences, not federal mandates, should determine how they're used. He called President Bush's proposal for expanding ethanol use to reduce gas consumption "very well motivated" but said industry leaders "want a seat at the table" when government officials set standards for the use and development of alternative energy sources. Oil companies already are investing heavily in alternatives and new ways to get oil and gas out of the ground. BP, which earned $22 billion in 2006, plans to spend $8 billion over the next decade developing alternative energy using wind, hydrogen and other means. Shell is testing technology that involves drilling holes in fields and inserting electric heaters to gradually heat rock, causing the trapped organic matter — kerogen, in this case — to be released as oil and gas. Yergin said another clear indication of the rising interest in cleaner and more efficient energy is growing investment by venture capitalists. Last year, venture capital investments in industrial and energy deals more than doubled from the year before to $1.8 billion, according to data from Thomson Financial, the National Venture Capital Assn. and PricewaterhouseCoopers. About 40% of that money was earmarked for alternative energy. ­

- Amid the perennial topics of geopolitics, production challenges and supply and demand, the world's energy leaders have descended on this oil town for a weeklong conference with a surprising new focus: using less oil. Exxon Mobil Corp. Chief Executive Rex Tillerson acknowledged the dangers of global warming but sounded skeptical about alternative fuels. Chevron Corp. CEO David O'Reilly took on the subject in a keynote speech, noting that renewable fuels "have the potential to alter the energy portfolio over the long term." And lunch Tuesday included a recounting of Brazil's success with fuel ethanol. The influential annual conference, sponsored by Cambridge Energy Research Associates, this year is devoting an unprecedented share of the program to unorthodox topics such as alternative power sources, carbon dioxide policy and the future of ethanol and other biofuels. Tillerson started Tuesday's events by reiterating some of the Irving, Texas-based company's — and oil industry's — favorite themes: the need to tap more of this country's oil reserves, the importance of oil to the world economy and the damage new oil taxes could have on the industry's long-term investments to find and produce more petroleum. But he also offered a cautious view on biofuels such as ethanol and biodiesel. Such renewable fuels are being touted in many circles as the best near-term hope for reducing carbon emissions from gasoline and diesel. He said "the important thing is that the public and policymakers be realistic about the role that biofuels will play and not get ourselves into wishful thinking." O'Reilly of Chevron was a little more upbeat, noting that the San Ramon, Calif., company had invested in a biofuels plant in Texas and funded related research at several universities aimed at lowering the cost of making ethanol from plant matter other than corn. "We're a big player in alternatives … and we're doing a lot of work in the biofuels area," O'Reilly said in a Tuesday interview before his evening speech. "The dollars that are being invested in alternative energies today — that's going to generate new products, new ideas, and it's going to be the marketplace that dictates this, no matter where policy is." However, he disagreed with the notion that renewables would ultimately replace gasoline. "It's not fossil fuels or renewables that's the answer. It's fossil fuels and renewables. We're going to need both, not one or the other." Jose Sergio Gabrielli de Azevedo, chief executive of Brazil's Petrobras oil company, made a point of touting his country's dramatic shift to ethanol-based fuels made from sugar cane. "I'm trying to call attention to the role of Latin America as oil producer and also trying to call attention toward the importance of biofuels as a new source for energy," Gabrielli said. His country, where every gas station has at least one pump dispensing pure ethanol, is considered a model in the shift away from the fossil fuels that have powered cars for a century. Brazil, he said, stands ready to help the United States boost its ethanol use. But that won't happen as long as this country clings to its tariff of more than 50 cents per gallon on imported ethanol. All the talk of ethanol, biofuels and climate change represented a striking departure from the hot topics that have coursed through this energy conference over the last 25 years. But oil industry critics at the Foundation for Taxpayer and Consumer Rights weren't impressed. "Big Oil CEOs are meeting in Houston this week to develop a message on making their industry look better — greener and more committed to energy efficiency. But their underlying business strategy hasn't changed a bit," the Santa Monica-based consumer group said in a Tuesday statement. "Without strong federal regulation — including an antitrust update and requirements that oil companies put a portion of their outlandish profits into robust development of renewables — meetings like this week's in Houston are just hot air." ­

- Texaco has a rich heritage in auto racing, and the 2007 season marks its 20th year as a major sponsor in the National Association of Stock Car Auto Racing (NASCAR) NEXTEL Cup Series. This year, Texaco/Havoline and Chip Ganassi Racing will make history as Juan Pablo Montoya becomes the first Formula One driver to ever join the NEXTEL Cup ranks when he pilots the No. 42 Texaco/Havoline Dodge Charger. Montoya will be in the running for the NASCAR NEXTEL Cup Rookie of the Year title while competing in an assortment of Busch Series races as well. ­

- An article on Page 50 of The Times Magazine, about Sam Nunn, head of the Nuclear Threat Initiative and former chairman of the Senate Armed Services Committee, misstates the name of a company on whose board he serves. It is Chevron, not ChevronTexaco. The article also misspells the surname of a former secretary of state with whom Nunn and others wrote a recent op-ed article for The Wall Street Journal. He is George P. Shultz, not Schulz. And the article misspells the surname of the director general of the International Atomic Energy Agency in several references. He is Mohamed ElBaradei, not ElBaredei. ­

- Chevron Corp. announced its support for United Way of the Bay Area's (UWBA) expansion of a regional 2-1-1 service, the 24-hour community information line that links communities with services, with a $1 million contribution. In addition to providing access to hundreds of nonprofits that provide services such as food, shelter and counseling, 2-1-1 is also an integral component of disaster-response infrastructure. The toll-free, multilingual 2-1-1 service serves as a vital link for individuals seeking to volunteer, provide resources and assist during times of crisis. After Hurricane Katrina, calls to Texas' 2-1-1 system increased from 2,500 daily to more than 10,000 daily as hurricane victims sought shelter, food and other assistance. In the three weeks after Katrina, Texas 2-1-1 assisted more than 170,000 callers.

March

• Upstream news: ­

- Technology advances have made it possible to unlock more oil from old fields at time when higher oil prices make it economical for companies to go after reserves that are harder to reach; forecasts that world's reserves are drying out have given way to predictions that more oil can be found than ever before; US Geological Survey estimated in 2000 that ultimately recoverable resources of conventional oil total 3.3 trillion barrels, of which third has already been produced; more recent estimate by Cambridge Energy Research Associates finds total base of recoverable oil to be 4.8 trillion barrels, reflecting how new technology can tap into more resources; increased projections for how much oil is extractable may become political topic on many different fronts; nationally, legislators may be reluctant to consider opening Alaska and other areas to new exploration; on global level, Orgn of Petroleum Exporting Countries will see its clout reinforced in coming years. Correction: March 6, 2007, Tuesday A front-page article about technology advances that made it possible to unlock more oil from old fields misstated Saudi Arabia's total reserves, which are about a quarter of the world's proven total. It is 260 billion barrels, not million. ­

- The Kern River oil field, discovered in 1899, was revived when Chevron engineers here started injecting high-pressured steam to pump out more oil. The field, whose production had slumped to 10,000 barrels a day in the 1960s, now has a daily output of 85,000 barrels. In Indonesia, Chevron has applied the same technology to the giant Duri oil field, discovered in 1941, boosting production there to more than 200,000 barrels a day, up from 65,000 barrels in the mid-1980s. And in Texas, Exxon Mobil expects to double the amount of oil it extracts from its Means field, which dates back to the 1930s. Exxon, like Chevron, will use three-dimensional imaging of the underground field and the injection of a gas — in this case, carbon dioxide — to flush out the oil. Within the last decade, technology advances have made it possible to unlock more oil from old fields, and, at the same time, higher oil prices have made it economical for companies to go after reserves that are harder to reach. With plenty of oil still left in familiar locations, forecasts that the world’s reserves are drying out have given way to predictions that more oil can be found than ever before. In a wide-ranging study published in 2000, the U.S. Geological Survey estimated that ultimately recoverable resources of conventional oil totaled about 3.3 trillion barrels, of which a third has already been produced. More recently, Cambridge Energy Research Associates, an energy consultant, estimated that the total base of recoverable oil was 4.8 trillion barrels. That higher estimate — which Cambridge Energy says is likely to grow — reflects how new technology can tap into more resources. There is still a minority view, held largely by a small band of retired petroleum geologists and some members of Congress, that oil production has peaked, but the theory has been fading. Equally contentious for the oil companies is the growing voice of environmentalists, who do not think that pumping and consuming an ever-increasing amount of fossil fuel is in any way desirable. Increased projections for how much oil is extractable may become a political topic on many different fronts and in unpredictable ways. By reassuring the public that supplies will meet future demands, oil companies may also find legislators more reluctant to consider opening Alaska and other areas to new exploration. On a global level, the Organization of the Petroleum Exporting Countries, which has coalesced around a price of $50 a barrel for oil, will likely see its clout reinforced in coming years. The 12-country cartel, which added Angola as its newest member this year, is poised to control more than 50 percent of the oil market in coming years, up from 35 percent today, as Western oil production declines. Oil companies say they can provide enough supplies — which might eventually lead to lower oil and gasoline prices — but that they see few alternatives to fossil fuels. Inevitably, this means that global carbon emissions used in the transportation sector will continue to increase, and so will their contribution to global warming. The oil industry is well known for seeking out new sources of fossil fuel in far-flung places, from the icy plains of Siberia to the deep waters off West Africa. But now the quest for new discoveries is taking place alongside a much less exotic search that is crucial to the world’s energy supplies. Oil companies are returning to old or mature fields partly because there are few virgin places left to explore, and, of those, few are open to investors. At Bakersfield, for example, Chevron is using steam-flooding technology and computerized three-dimensional models to boost the output of the field’s heavy oil reserves. Even after a century of production, engineers say there is plenty of oil left to be pumped from Kern River. Some forecasters, studying data on how much oil is used each year and how much is still believed to be in the ground, have argued that at some point by 2010, global oil production will peak — if it has not already — and begin to fall. That drop would usher in an uncertain era of shortages, price spikes and economic decline. ­

- All foreign companies operating huge crude projects in Venezuela's Orinoco reserve have agreed to cede operational control to the state, Venezuela's oil company said, another step in President Hugo Chavez's nationalization push. State oil company Petroleos de Venezuela said Thursday that U.S. companies Chevron Corp. and ConocoPhillips agreed to meet a May 1 deadline decreed by Chavez to hand over operations to PDVSA in two of the four targeted projects. Norway's Statoil quickly followed suit, saying the project that it operates with France's Total would pass to PDVSA too. The companies will form transition committees to oversee the handover of their multibillion-dollar projects' operations in the OPEC nation. Exxon Mobil Corp., the only other foreign company involved in the projects, agreed Monday to form such a body. Spokesmen for Chevron of San Ramon, Calif., and ConocoPhillips of Houston didn't return calls seeking comment. The Orinoco projects turn tar-like oil into synthetic crude.

­- Chevron Corporation (NYSE:CVX) told financial analysts at a meeting 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. 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. 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. 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. 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. ­

- Chevron Corporation (NYSE: CVX) announced the inauguration of the Bibiyana natural gas field, which is located onshore in Block 12 in the northeast of Bangladesh in Habiganj District. Bibiyana, one of the largest gas fields in Bangladesh, is expected to initially produce 200 million cubic feet of natural gas per day (mmcfd). The plant's full capacity of 600 mmcfd is scheduled to be available by late 2007, with the field reaching maximum total production of 500 mmcfd by 2010. Once full production is realized, Bibiyana is set to become the largest producing gas field in the country. The project includes 12 development wells, a gas plant, a natural gas pipeline and a condensate pipe¬line.The company has signed a gas purchase and sales agreement with Petrobangla, the state owned oil and gas company. Chevron holds interests in three production sharing contracts in Bangladesh, encompassing more than 10,000 square kilometres (2.47 million acres). Chevron Bangladesh has a 98 percent working interest in Bibiyana, and Jalalabad and Moulavi Bazar fields, which combined these two fields average total production of 330 mmcfd. Chevron also has a 43 percent interest in Block 7 in southern Bangladesh where the company conducted seismic survey in 2006. In early 2006, Chevron supplied 20 percent of Bangladesh's natural gas market and this is expected to increase to over 30 percent when peak production is realized at Bibiyana.

• Downstream news: ­

- Texaco Nederland B.V., an indirect wholly owned subsidiary of Chevron Corporation, announced the signing of an agreement to sell its Netherlands manufacturing business and other assets to BP. These businesses comprise interests in several joint-venture companies operating in the Rotterdam area, including a 31 percent interest in the Netherlands Refining Company's 400,000 barrel-per-day Nerefco Refinery, a 22.8 percent interest in a crude oil storage facility, various associated proprietary pipelines and a 31 percent interest in the 22.5 megawatt wind farm located onsite at the refinery. BP currently owns the remaining 69 percent interest in the Nerefco Refinery and the adjoining wind farm, but holds no interests in the other operations. The sale, which is valued at about $900 million plus working capital and hydrocarbon inventory, is expected to be completed during the first quarter of 2007, subject to regulatory approval. ­

- BP said it had agreed to buy Chevron Corp.'s Netherlands manufacturing company, Texaco Raffinaderij Pernis, for about $900 million, excluding working capital and hydrocarbon inventory. BP will acquire Chevron's 31% stake in Netherlands Refining Co., or Nerefco, Chevron's stake in the jointly owned wind farm at the refinery and a stake in the nearby crude oil terminal and storage facility and a number of associated pipelines. ­

- BP said it had agreed to buy Chevron’s manufacturing company in the Netherlands, Texaco Raffinaderij Pernis, for about $900 million, excluding working capital and hydrocarbon inventory. BP will acquire Chevron’s 31 percent minority shareholding in the Netherlands Refining Company as well as Chevron’s stake in the jointly owned wind farm located at the refinery; shareholdings in the nearby crude oil terminal and storage facility; and a number of associated pipelines. The deal, which is expected to be completed during the first half of the year, would make the refinery a 100 percent BP- owned asset.

• Business/Finance news: ­

- Chevron Corporation announced that Kevin W. Sharer has been nominated for election to Chevron's board of directors. Sharer, 59, is currently Chief Executive Officer and President of Amgen Inc., a biotechnology company. Sharer will be part of the slate of board nominees to be considered for election to Chevron's board at the company's annual stockholders meeting on April 25. If he is elected, the board will expand from 13 to 14 members. ­

- Oil companies have made super profits the last few years thanks to record high oil prices. Chevron, the second-largest American oil company, earned $17 billion in 2006. But oil is harder to find and more expensive to produce. ­

- Since the first Earth Day almost 37 years ago, U.S. companies have been eager to trumpet their environmental good deeds, even when they were more about public relations than clean air or water. But increasingly, corporate America is going green in new, serious and costly ways. After years of being prodded — and in some cases punished — by protesters, lawmakers, regulators and, now, even Wall Street, businesses are looking beyond the bottom line. And it's not happening just in California, the Northwest and other ecologically minded areas. In Texas, a group of private investors last week agreed to pay about $32 billion for the largest utility in the state. The private equity firms pledged to back U.S. legislation on global warming and to build no more than three of 11 planned coal-fired power plants. Texas Pacific Group and Kohlberg Kravis Roberts & Co. announced that they were buying Texas' TXU Corp. in a deal that included commitments to scrap most of the coal-fired power plants planned by TXU. Environmentalists, who sat at the table during part of the negotiations, also won a promise from investors to double investments in wind power and other sources of alternative energy. The agreement is the latest sign that corporations and environmentalists can do business together, said Denis Hayes, the coordinator of the first Earth Day in 1970. Chevron Corp., BP and other oil companies are spending billions of dollars to develop alternatives to petroleum-based fuels. Farmers are turning fields of corn into ethanol used to run cars and trucks. California and, increasingly, its neighbors are continuing that kind of environmental leadership. This week, governors from five Western states pledged to cooperate in enlisting government agencies and the private sector in the fight to curb global warming. The governors of Arizona, California, New Mexico, Oregon and Washington said they were taking action because of a lack of leadership from President Bush and Congress. ­

- Chevron Corporation (NYSE: CVX) will hold a security analyst meeting on Tuesday, March 13, 2007, in New York City from 9:00 a.m. to 12:00 p.m. EST. The meeting will feature presentations by Dave O'Reilly, chairman of the board and chief executive officer; George Kirkland, executive vice president, Upstream and Gas; Mike Wirth, executive vice president, Downstream; Steve Crowe, vice president and chief financial officer, and Bobby Ryan, vice president, Global Exploration. ­

- The National Institute of Environmental Health Sciences has begun a review of ties between a federal health center that evaluates the risks of chemicals to reproductive health and a consulting firm funded by companies that produce chemicals linked to reproductive disorders. The investigation follows a Times report on Sunday that Sciences International, an Alexandria, Va., firm funded by more than 50 industrial companies, helps manage the federal Center for the Evaluation of Risks to Human Reproduction. Among the firms with financial ties to Sciences International are two that produce bisphenol A, a chemical in polycarbonate plastic bottles that has been linked in animal testing to prostate and breast cancer and reduced fertility. Since 1998, Sciences International has helped manage the federal reproductive health center and prepared draft reports analyzing bisphenol A and 16 other chemicals. The company has a $5-million contract with the center. The center's scientific advisory panel was scheduled to decide whether bisphenol A endangers reproductive health in humans. But director Michael Shelby announced that the panel, after two days of reviewing the 372-page report that Sciences International prepared on bisphenol A, known as BPA, still had too many unresolved questions and was postponing its decision for six weeks. The National Institute of Environmental Health Sciences, which oversees the center, removed Sciences International from overseeing the advisory panel's bisphenol A evaluation while it reviews whether the company's connections to chemical manufacturers pose a conflict of interest. The role of Sciences International at the health center came to the attention of the Environmental Working Group, an advocacy group, when some scientists who study bisphenol A criticized the agency's report as inaccurate and biased toward industry. "This contractor has a clear financial conflict of interest. It was absolute necessity for the panel to postpone this decision," said Jane Houlihan, Environmental Working Group's vice president for research. She said the center also should prohibit Sciences International's involvement in the evaluation of any chemicals related to its industry clients and develop a conflict of interest policy for all contractors. The environmental group said its review of government and company data showed that Sciences International was involved in risk evaluations for at least eight other chemicals produced by its clients. Sciences International's clients have included BPA manufacturers Dow Chemical Co. and BASF. Others clients include Union Carbide, Chevron, DuPont, 3-M, Syngenta, Amvac Chemical, ExxonMobil, the National Assn. of Manufacturers and the American Chemistry Council. Bisphenol A mimics the sex hormone estrogen, which can damage a developing reproductive system. In newborn lab animals, studies have discovered that traces of the chemical — similar to amounts that can leach from hard plastic infant and water bottles — reduce sperm counts and cause genetic changes that are precursors of prostate cancer and breast cancer. The plastics and chemical industries say the levels that leach from polycarbonate bottles are too low to be harmful, while more than 100 government-funded studies have found effects on lab animals at low doses. Polycarbonate is an inflexible plastic used for infant bottles, multi-gallon water containers and refillable sports bottles. BPA is also used to line cans of food and in some dental sealants. ­

- Today, more than three-quarters of the world’s oil is owned and controlled by governments. It wasn’t always this way. Until about 35 years ago, the world’s oil was largely in the hands of seven corporations based in the United States and Europe. Those seven have since merged into four: ExxonMobil, Chevron, Shell and BP. They are among the world’s largest and most powerful financial empires. But ever since they lost their exclusive control of the oil to the governments, the companies have been trying to get it back. Iraq’s oil reserves — thought to be the second largest in the world — have always been high on the corporate wish list. In 1998, Kenneth Derr, then chief executive of Chevron, told a San Francisco audience, “Iraq possesses huge reserves of oil and gas — reserves I’d love Chevron to have access to.” A new oil law set to go before the Iraqi Parliament this month would, if passed, go a long way toward helping the oil companies achieve their goal. The Iraq hydrocarbon law would take the majority of Iraq’s oil out of the exclusive hands of the Iraqi government and open it to international oil companies for a generation or more. In March 2001, the National Energy Policy Development Group (better known as Vice President Dick Cheney’s energy task force), which included executives of America’s largest energy companies, recommended that the United States government support initiatives by Middle Eastern countries “to open up areas of their energy sectors to foreign investment.” One invasion and a great deal of political engineering by the Bush administration later, this is exactly what the proposed Iraq oil law would achieve. It does so to the benefit of the companies, but to the great detriment of Iraq’s economy, democracy and sovereignty. Since the invasion of Iraq, the Bush administration has been aggressive in shepherding the oil law toward passage. It is one of the president’s benchmarks for the government of Prime Minister Nuri Kamal al-Maliki, a fact that Mr. Bush, Secretary of State Condoleezza Rice, Gen. William Casey, Ambassador Zalmay Khalilzad and other administration officials are publicly emphasizing with increasing urgency. The administration has highlighted the law’s revenue sharing plan, under which the central government would distribute oil revenues throughout the nation on a per capita basis. But the benefits of this excellent proposal are radically undercut by the law’s many other provisions — these allow much (if not most) of Iraq’s oil revenues to flow out of the country and into the pockets of international oil companies. The law would transform Iraq’s oil industry from a nationalized model closed to American oil companies except for limited (although highly lucrative) marketing contracts, into a commercial industry, all-but-privatized, that is fully open to all international oil companies. The Iraq National Oil Company would have exclusive control of just 17 of Iraq’s 80 known oil fields, leaving two-thirds of known — and all of its as yet undiscovered — fields open to foreign control. The foreign companies would not have to invest their earnings in the Iraqi economy, partner with Iraqi companies, hire Iraqi workers or share new technologies. They could even ride out Iraq’s current “instability” by signing contracts now, while the Iraqi government is at its weakest, and then wait at least two years before even setting foot in the country. The vast majority of Iraq’s oil would then be left underground for at least two years rather than being used for the country’s economic development. The international oil companies could also be offered some of the most corporate-friendly contracts in the world, including what are called production sharing agreements. These agreements are the oil industry’s preferred model, but are roundly rejected by all the top oil producing countries in the Middle East because they grant long-term contracts (20 to 35 years in the case of Iraq’s draft law) and greater control, ownership and profits to the companies than other models. In fact, they are used for only approximately 12 percent of the world’s oil. Iraq’s neighbors Iran, Kuwait and Saudi Arabia maintain nationalized oil systems and have outlawed foreign control over oil development. They all hire international oil companies as contractors to provide specific services as needed, for a limited duration, and without giving the foreign company any direct interest in the oil produced. Iraqis may very well choose to use the expertise and experience of international oil companies. They are most likely to do so in a manner that best serves their own needs if they are freed from the tremendous external pressure being exercised by the Bush administration, the oil corporations — and the presence of 140,000 members of the American military. Iraq’s five trade union federations, representing hundreds of thousands of workers, released a statement opposing the law and rejecting “the handing of control over oil to foreign companies, which would undermine the sovereignty of the state and the dignity of the Iraqi people.” They ask for more time, less pressure and a chance at the democracy they have been promised. Antonia Juhasz, an analyst with Oil Change International, a watchdog group, is the author of “The Bush Agenda: Invading the World, One Economy at a Time.”

April

• Upstream news:

­­ - Chevron confirms the discovery of two new major oil accumulations in the northern part of the Republic of Congo Moho-Bilondo permit, situated some 80 kilometers offshore and in a water depth of 1,000 meters. Two wells, Moho-Nord Marine 1 & 2 drilled in late 2006 and early 2007 by operator Total E&P, Congo, encountered 140 meter and 100 meter oil columns respectively, in good quality sandstone reservoirs of Miocene age. Evaluation and development option studies have been commenced by the operator.

• Downstream news:

­ - Chevron Corporation (NYSE: CVX) and Weyerhaeuser Company (NYSE: WY) announced a letter of intent (LOI) to jointly assess the feasibility of commercializing the production of biofuels from cellulose-based sources. The companies will focus on researching and developing technology that can transform wood fiber and other nonfood sources of cellulose into economical, clean-burning biofuels for cars and trucks. Feedstock options include a wide range of materials from Weyerhaeuser's existing forest and mill system and cellulosic crops planted on Weyerhaeuser's managed forest plantations.

• Business/Finance news:

­ - Chevron Corporation (NYSE: CVX) expressed its support for the U.S.-Korea Free Trade Agreement, commending both negotiating teams for concluding an agreement that will advance the interests of both countries as well as enhance global trade, with all the attendant benefits to each country's companies, workers and consumers. Chevron is a founding member of the U.S.-Korea Free Trade Agreement Coalition and has worked closely with the U.S. negotiating team to ensure that strong investment protections were maintained. These protections encourage investments overseas that create opportunities in the United States and abroad. ­

- Chevron Corporation (NYSE:CVX) issued its interim update for the first quarter of 2007. Relative to fourth quarter earnings, the company expects results in the first quarter to benefit from a gain on the sale of the company's interest in manufacturing assets in the Netherlands, partially offset by the effects of lower refinery utilization attributable to downtime on the U.S. West Coast and lower prices for crude oil and natural gas liquids on Upstream. ­

- Chevron Corporation (NYSE: CVX), the government of Aceh, the Rehabilitation and Reconstruction Agency for Aceh and Nias, and the United States Agency for International Development (USAID) announced plans to develop a polytechnic institute in Aceh province, Indonesia. A memorandum of understanding has been signed by the four parties during a ceremony at the site of the proposed vocational training facility in the provincial capital city of Banda Aceh. The initiative follows a short-term vocational training program that enabled 350 students from Aceh and Nias to graduate from Politeknik Caltex Riau, the Chevron-supported polytechnic facility in Riau province. The proposed Aceh Polytechnic is part of the Vocational Training Alliance for Aceh, a $10 million commitment from Chevron and USAID to support vocational training needs in the province. The Alliance supports the government of Indonesia's plan to assist in restoring people's livelihoods following the tsunami of December 26, 2004. ­

- Chevron Corporation posted better-than-targeted results for greenhouse gas (GHG) emissions, added development of renewable energy technologies to its corporate strategies and invested more than $90 million in communities around the world, according to the company's 2006 Corporate Responsibility Report. ­

- Chevron Corporation (CVX:NYSE) announced the Chevron 5,000,000 Mile Rideshare Challenge has achieved its target in just twelve months, with commuters in the Greater Washington, D.C., area saving 2,300 metric tons of Greenhouse Gas (GHG) emissions in the process. The web-based rideshare program matched 5,874 riders and drivers in Virginia, Maryland and D.C., to help alleviate traffic congestion and conserve fuel. As a result, 237,000 gallons of gasoline was saved, 5,216,500 fewer miles were driven and 200,000 cars journeys were saved. ­

- Chevron Corporation had a record-setting year in 2006, and the company is delivering on its commitments to supply safe, clean and reliable energy to fuel economic growth, Chevron Chairman and CEO Dave O'Reilly said at the company's 2007 Annual Stockholders' Meeting. ­

- The Board of Directors of Chevron Corporation (NYSE: CVX) declared a quarterly dividend of 58 cents per share, payable June 11, 2007, to stockholders of record as of May 18, 2007. The amount represents an 11.5 percent increase in the company's quarterly dividend and marks the 20th consecutive year Chevron has increased its annual dividend payment. ­

- Chevron Corporation (NYSE: CVX) announced Patricia E. Yarrington has been named corporate vice president and treasurer, replacing David M. Krattebol, who is retiring from the position after 36 years with the company. In addition, the company announced a series of senior level appointments, which will be effective May 16, 2007. ­

- Chevron Corporation (NYSE: CVX) reported net income of $4.7 billion ($2.18 per share – diluted) for the first quarter 2007, compared with $4 billion ($1.80 per share – diluted) in the 2006 first quarter. Earnings in the 2007 period included a $700 million gain ($0.32 per share) on the sale of the company's 31 percent interest in the Nerefco Refinery and related assets in the Netherlands. ­

- The Chevron Corporation reported an 18 percent increase in first quarter profit as it cashed out of a Netherlands venture and cashed in on lucrative refining margins. Chevron said it earned $4.7 billion, or $2.18 a share, in the quarter, compared with $4 billion, or $1.80 a share, a year earlier. The company, based in San Ramon, Calif., turned a higher profit despite a 12 percent decline in revenue, to $48.2 billion. The profit included a $700 million gain from Chevron's sale of a minority stake in a Netherlands refinery. Without that one-time lift, Chevron said it would have earned $1.86 a share, which exceeded the average estimate of analysts surveyed by Thomson Financial. Profit was helped by higher gasoline prices. Excluding the Netherlands sale, Chevron's profit rose 59 percent to $923 million in its operations that refine oil and sell gasoline. That helped the company overcome lower prices for crude oil and natural gas that contributed to a 16 percent decline in income from exploration and production operations.

May

• Upstream news:

­

­- Still clawing its way out of the ruins of its brutal past, Cambodia has come face to face with an extraordinary new future: It seems to have struck oil. Exploratory drilling began two years ago, and the oil giant Chevron says it has found potentially huge deposits. ­

- The Chevron Corporation said it had restored normal production levels at its Pennington oil fields in Nigeria after a militant attack forced the company to cut output earlier this month. Chevron shut off 15,000 barrels a day on May 1 from its offshore Funiwa oil field, which is connected to the Pennington export terminal, after the kidnapping of foreign oil workers by militants.

• Downstream news:

­ - Chevron Energy Solutions, a Chevron (NYSE: CVX) subsidiary, announced that it has begun engineering and construction of an innovative system at the City of Rialto's wastewater treatment facility that will transform wastewater sludge and kitchen grease from local restaurants into clean, renewable power. The environmentally friendly system will increase municipal revenues, reduce landfill wastes and lower greenhouse emissions by nearly 5.5 million tons annually, while decreasing the city's energy costs by about $800,000 a year. The system includes a 900-kilowatt fuel cell power plant, manufactured by FuelCell Energy (NasdaqNM: FCEL), that will generate electricity without combustion using methane, a biogas produced naturally on site by the organic materials contained in wastewater. ­

- Chevron Petroleum Company, an affiliate of Chevron Corporation, and Ecopetrol, S.A. signed with PDVSA Gas, S.A. a sales contract to start delivering natural gas from Colombia to Venezuela by January 1, 2008, within the frame of the agreement recently signed by the governments of Colombia and Venezuela to export/import natural gas. The agreement among the government companies and Chevron includes the construction by PDVSA of a new 225 kilometer pipeline between the two countries to be completed by late 2007 and additional processing facilities that Chevron is building in Colombia to deliver up to 150 MMSCFD of gas. The new agreement also contemplates a separate agreement between PDVSA and Ecopetrol for future delivery of natural gas from Venezuela to Colombia. ­

- Chevron Corporation announced the signing of an agreement by its subsidiaries in Belgium, the Netherlands and Luxembourg (Benelux) to sell their fuels marketing business to Dutch company Delek Benelux B.V., a subsidiary of Israeli company Delek Petroleum. This sale, which is subject to regulatory approval, is expected to be completed during the third quarter 2007. The sale price is USD $460 million (approximately €342 million), exclusive of working capital adjustment estimated to be in the range of USD $30-95 million (approximately €20-70 million). ­

- BioSelect Fuels LLC, a division of Standard Renewable Energy LLC, and Chevron Technology Ventures, a division of Chevron USA, unveiled their biodiesel plant in Galveston, Texas. The plant is one of the first large-scale biodiesel production facilities in North America and is now producing clean-burning biodiesel from renewable resources. Galveston Bay Biodiesel, LP (GBB) is the initial project of BioSelect Fuels, a Houston-based developer and operator of biodiesel facilities. The facility will initially produce 20 million gallons of biodiesel per year and has the capability to expand operations to produce 110 million gallons per year. ­

- Chevron Corporation (NYSE: CVX) announced that its affiliate Chevron Trinidad and Tobago Resources SRL and partner BG Group have entered into a gas sales agreement with the National Gas Company of Trinidad and Tobago Limited (NGC) for the supply of 220 million standard cubic feet of natural gas per day for a term of 11 years, with an option to extend for another four years. Deliveries are expected to begin in 2009. The natural gas is expected to be sourced from the Dolphin Field, located approximately 52 miles off the east coast of Trinidad in the East Coast Marine Area (ECMA). First commercial production from Dolphin began in 1996. Four new development wells are planned to provide the additional gas to be delivered to NGC for use in the Trinidad and Tobago domestic market. Chevron and operator British Gas each have a 50 percent working interest in the ECMA. ­

- Chevron Corporation (NYSE: CVX) and the Texas A&M Agriculture and Engineering BioEnergy Alliance (Texas A&M BioEnergy Alliance) announced that they have entered into a strategic research agreement to accelerate the production and conversion of crops for manufacturing ethanol and other biofuels from cellulose. Chevron Technology Ventures, a division of Chevron USA, Inc., will support research initiatives over a four-year period through the Texas A&M BioEnergy Alliance, a formal partnership combining the collective strengths of The Texas A&M University System's two premier research agencies in agriculture and engineering – the Texas Agricultural Experiment Station (TAES) and the Texas Engineering Experiment Station (TEES).

• Business/Finance news:

­ - Admission From Chevron In Oil-for-Food Program. In a settlement it is negotiating with federal prosecutors, Chevron is preparing to acknowledge that it should have known that kickbacks to Saddam Hussein were being paid on oil it bought from Iraq as part of the United Nations oil-for-food program, according to investigators. ­

- Chevron is expected to admit that it should have known about kickbacks being paid to Saddam Hussein on oil bought from Iraq as part of defunct United Nations program; admission will be part of settlement with United States and will likely include fines totaling $25 million to $30 million; would be largest settlement so far in connection with investigations of companies involved in oil-for-food scandal. ­

- Heavily armed gunmen stormed a boat just before midnight and seized four American subcontractors in the southern Niger Delta, industry officials said. A Chevron spokesman, Femi Odumabo, termed it a ''robbery case.'' It brought the number of foreigners kidnapped in the southern oil-producing region in the last 10 days to 32. Earlier, militants staged coordinated blasts on three pipelines in the region, the most damaging assault on the country's oil infrastructure in more than a year. Nigeria has a total production capacity of three million barrels per day, but protests and militant attacks had reduced oil production by 680,000 barrels before the bombings. The Movement for the Emancipation of the Niger Delta, the region's largest militant group, claimed responsibility for the blasts but not for the Americans' kidnapping, but it said it was encouraging ''all groups to attack all facilities and oil workers'' before the inauguration of Umaru Yar'Adua as president on May 29 after an election last month condemned as fraudulent. ­

- A Chevron Nigeria Limited oil vessel was boarded by militants offshore Nigeria's Bayelsa state. Nigerian government security forces suffered casualties during the incident, and six Chevron employees have been taken hostage. ­

- Chevron Corporation (NYSE: CVX) announced that it will invest up to $4 million to support science education in selected Orleans Parish public middle schools through its Energy for Learning program. ­

- Chevron U.S.A. Inc., a wholly owned subsidiary of Chevron Corporation, has agreed to sell all 96,891,014 of its shares of Class A common stock of Dynegy Inc. (NYSE:DYN) in an underwritten public offering. The shares will be offered pursuant to an effective registration statement filed with the United States Securities and Exchange Commission. Proceeds to Chevron from the transaction will be approximately $940 million. ­

- Young protesters overrun oil pipeline hub in volatile Niger Delta, helping cut Nigeria's oil production by about 30 percent as country weathers period of instability after deeply flawed election last month; protest, by activists of Ogoni tribe in Niger Delta, is latest violence among ethnic militias that have attacked pipelines and other facilities since election last month returned ruling People's Democratic Party to power with wide margins; group of protesters in on of oil-producing states has occupied Chevron oil field since May 7; militant group called Movement for Emancipation of Niger Delta has bombed three pipelines in neighboring state Bayelsa, disrupting flow of nearly 100,000 barrels per day for Italian oil company Eni; disruption helps push oil prices in New York to $63.17, up 71 cents per barrel. ­

- Oil executives say current shortages of fuel and high prices at pump could be long-term problem because of uncertainty created by government's push to increase supply of biofuels like ethanol; cite Pres Bush's State of the Union address call for sharp increase in use of biofuels to reduce America's use of gasoline by 20 percent within 10 years, and bill in Congress calling for nearly fivefold increase in use of ethanol; say many oil companies are considering scaling back plans to increase fuel production by expanding existing refineries; but Sen. Charles E Schumer is holding hearings to address suspicions that oil industry is looking for ways to keep profits high by delaying much-needed investments; House votes by narrow margin to penalize any oil companies, traders or retailers found to be charging 'unconscionably excessive' prices for gasoline; White House says this amounts to price controls and that Pres Bush will probably veto measure; experts predict prices will keep rising, then soften later in summer as demand trails off.

June

• Upstream news:

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­- Chevron Corporation (NYSE: CVX) announced its $3.5 billion Tahiti project in the Gulf of Mexico will face delays because of metallurgical problems discovered in the facility's mooring shackles. Initial quality control testing of the existing shackles did not identify a problem. Additional testing was ordered after Chevron's contractor discovered a metallurgical problem with shackles on a similar installation for another company. Metallurgical problems were subsequently discovered in the Tahiti shackles as well. Tahiti is an energy project located in the deepwater Gulf of Mexico, about 140 miles offshore and 190 miles south of New Orleans. It was scheduled for completion in mid-2008. Major components of the project are nearing completion and work on their installation is expected to continue once timing for new shackles is determined.

• Downstream news:

­ - Chevron Latin America Marketing LLC and Chevron Amazonas LLC, both indirect, wholly owned subsidiaries of Chevron Corporation, have signed an agreement with D.U.C.S.A. - the state owned petroleum marketing and distribution company operating under the ANCAP brand - for D.U.C.S.A. to purchase the Chevron fuels marketing business in Uruguay. This agreement reflects Chevron's downstream strategy to improve returns by focusing on areas where it has a competitive supply position and strong brand recognition.

• Business/Finance news:

­ - Chevron (NYSE: CVX) issued a statement in response to the California AB32 Market Advisory Committee Report. ­

- The six Chevron employees kidnapped from a Chevron Nigeria Limited oil vessel offshore Nigeria's Bayelsa state on May 1, 2007 were released. The six employees (four Italians, one Croatian and one American), were freed by their captors unconditionally and will be reunited with their families as soon as possible. ­

- Texaco Capital Inc. ("TCI"), an indirect wholly owned subsidiary of Chevron Corporation ("Chevron") (NYSE: CVX), announced that it is offering to purchase for cash any and all of its outstanding debt specified securities The Securities are guaranteed by Texaco Inc. ("Texaco"), a wholly owned subsidiary of Chevron. The offer will commence on June 8, 2007, and will expire at 5:00 p.m. New York City time on June 21, 2007 (the "Expiration Date"), unless extended or earlier terminated, in either case, by TCI in its sole discretion. Holders of Securities wishing to sell must follow the instructions set forth in TCI's Purchase Offer dated June 8, 2007 (the "Purchase Offer"). Acceptances of the offer are irrevocable and there are no withdrawal rights during the term of the offer. ­

- Chevron's efforts to fight the spread of HIV/AIDS around the world have been recognized by the Global Business Coalition (GBC) with a Business Excellence in the Workplace Award. The award from the GBC recognizes the impact of Chevron's global HIV/AIDS policy, which was developed in conjunction with independent experts and agencies that specialize in HIV/AIDS workplace policies, such as the United Nations Development Programme and Pangaea Global AIDS Foundation. Chevron's HIV/AIDS policy focuses on delivering customized workplace- and community-based education, awareness-building, prevention, and treatment programs across the company's worldwide operations. ­

- Texaco Capital Inc. ("TCI"), an indirect wholly owned subsidiary of Chevron Corporation (NYSE: CVX), announced the purchase prices to be paid pursuant to its Purchase Offer dated June 8, 2007 (the "Purchase Offer") with respect to all of its outstanding specified debt securities.

July

• Upstream news:

­­ - Chevron Corporation (NYSE: CVX) announced it has formed a research alliance with The University of Texas at Austin to develop new technologies to increase the amount of oil recovered from mature and challenging reservoirs. Under the alliance, Chevron Energy Technology Company, a Chevron subsidiary, will provide up to $5 million over the next five years to The University of Texas at Austin's Center for Petroleum and Geosystems Engineering. The joint research initiative will focus on non-thermal enhanced oil recovery (EOR) technologies, including surfactants and polymers that target oil trapped and bypassed by conventional recovery methods, and numerical models that accurately simulate enhanced oil recovery processes.

- Chevron North Sea Limited announced the successful conclusion of a production test of the Rosebank appraisal well 205/1-1, West of Shetland. The Rosebank discovery is in approximately 3,700 feet of water some 100 miles north west of the Shetland Islands. Rosebank partners are Chevron as operator, Statoil, OMV and DONG Energy. 205/1-1 is the second appraisal well drilled in Rosebank as part of a three well program conducted for Chevron and its partners by the Transocean Rather. The deviated well located at the southern end of the Rosebank structure encountered over 80 feet of vertical oil pay in sands at a depth of approximately 9,000 feet TVDSS.

• Downstream news:

- At the beginning of June, just as California gas prices started to retreat from record-high levels and the state's motorists started revving up for summertime travel, Chevron Corp. did the unimaginable: It launched a massive, 60-day overhaul at one of the state's largest gasoline-making plants, drastically reducing its output. Such moves often smell fishy to consumer groups, who say oil companies intentionally keep inadequate backup supplies and try to time major refinery maintenance projects to boost profits and the price of gasoline. In this instance, drivers saw no jump at the pump: Retail gasoline prices in California declined over the last two months, even though nearly a quarter of the El Segundo plant's processing equipment was idled. Even so, San Ramon, Calif.-based Chevron knew critics would question the move. So the traditionally tight-lipped company recently took pains to describe the El Segundo shutdown and the extensive planning that preceded it. Barring unforeseen events, the refinery is scheduled to be back to full production by midweek. When the work is completed, Chevron expects to have a slight increase in output, mostly from the small equipment improvements and replaced parts. The main purpose, however, was to tweak the refinery so it could process heavier and cheaper grades of crude oil — a move that can significantly increase profits and widen the selection of oil from abroad. Gary Yesavage, manager of the plant, said planning for the project began in April 2005, with the maintenance work scheduled to begin in April 2007 and be completed by the time driving season hit high gear. But in January, a fire at Chevron's Bay Area refinery forced that plant to stay offline through March. The El Segundo plant helped make up the lost production, but the extra downtime still cut into statewide supplies and helped push retail prices to a new record high average of $3.461 a gallon in early May. California's 14 gasoline-producing refineries typically run at close to capacity and their output falls short of in-state demand. With supplies stretched so tightly, even a slight dip in production can trigger a surge at the pump. Chevron suppliers were also late with some parts, so the El Segundo project ended up with the June 1 start date, Yesavage said. By then, Chevron had stockpiled gasoline from Wales and ingredients from Korea that could be used to make gasoline in parts of the refinery that were still running. Additional imports would be staggered to arrive over 59-day planned shutdown. To do the maintenance, Chevron shut down equipment covering a huge swath of land inside the refinery. Up to 50 contracting firms were summoned, along with Chevron employees from around the world. On day 14, nearly 3,000 of the expected 3,700 contractors were at work, helping the regular staff of 1,100 remove the innards of the massive crude oil distillation column, take apart heat exchangers and replace pumps. To handle the massive work group, Chevron nearly filled the local hotels and rented several floors of a nearby parking garage. Shuttles ferried workers to and from the plant for 10-hour and 12-hour shifts. Three tents were erected to handle the hordes during meal breaks and safety meetings. So far, so good. At the 51st day of the project, many pieces of equipment are already in start-up mode.

- Oil giant Chevron Corp. is seeking permission from federal regulators to build a wave energy project off Mendocino County. The Federal Energy Regulatory Commission announced plans to speed the licensing process for new wave and tidal energy projects, citing the benefits of the emissions-free sources of power. There are about 57 applications pending before the agency. Chevron said its facility would be capable of generating enough power for 48,000 U.S. homes. The San Ramon, Calif.-based company said its project would be contiguous to, and not competing with, a proposal by PG&E Corp.'s utility subsidiary to build a wave project in the area.

- Gasoline prices tumbled by an average of more than 9 cents around the nation over the last week, the Energy Department said, leading analysts to suggest that the worst pain at the pump had probably come and gone for 2007. California prices, which dropped 4 cents, could go as low as $2.75 in the coming weeks, the experts said. The average price of a gallon of self-serve regular gasoline in California fell to $3.118, down from a high of $3.461 in early May, according to the Energy Department's weekly survey of filling stations around the nation. That was 10.2 cents below the year-ago price. Nationally, the average dropped 9.1 cents to $2.958, well below the 2007 high mark of $3.211 recorded May 21 and 4.5 cents below the same week a year ago. Experts added that another good sign for California motorists was that prices declined even though one of the state's major refineries, Chevron Corp.'s El Segundo facility, had been operating at only 75% of capacity since early June and was due to resume full production soon. Crude oil futures for September delivery remained high on New York commodities markets, but fell 90 cents to close at $74.89 a barrel. The decline was based in part on the resumption of production at an important oil facility in Angola, analysts said. The drop also followed comments by officials of the Organization of the Petroleum Exporting Countries indicating that the cartel thought that oil prices above $60 to $65 a barrel were too high and indicating a willingness to boost production. Analysts said it wasn't clear whether OPEC would increase production before the end of the year. But they noted that the comments signaled a shift from just the last week, when cartel officials were saying crude supplies were adequate.

• Business/Finance news:

- Chevron Corporation (NYSE:CVX) issued its interim update for the second quarter of 2007. The company expects second quarter results to benefit from higher commodity prices in Upstream, stronger refining margins in Downstream and a gain on the sale of its interest in Dynegy, partially offset by net charges related to the redemption of debt and other corporate items.

- The Board of Directors of Chevron Corporation declared a quarterly dividend of 58 cents per share. The dividend is payable September 10, 2007, to holders of common stock as shown by the transfer records of the Corporation at the close of business August 17, 2007.

- San José Unified School District announced that it has entered into a unique partnership with Chevron Energy Solutions and Bank of America to establish what is believed to be the largest solar power and energy-efficient facilities program in K-12 education in the United States. The program, which includes installation of five megawatts of solar power, is expected to provide the following benefits: More than $25 million in energy cost savings to the district over the life of the solar power system; District budget stability and predictability through known energy costs; No district capital investment required; 25 percent reduction in the district's demand for utility power; Reduction of 37,500 tons of carbon dioxide emissions, equivalent to planting 400 acres of trees.

- Chevron Corporation reported net income of $5.4 billion ($2.52 per share - diluted) for the second quarter 2007, compared with $4.4 billion ($1.97 per share - diluted) in the corresponding 2006 period. For the first half of 2007, net income was $10.1 billion ($4.70 per share - diluted), a 21 percent increase from $8.3 billion ($3.77 per share - diluted) in 2006.

- Chevron posted a better-than-expected 24 percent rise in quarterly earnings on higher profit from its refineries and a gain from the sale of its stake in the power company Dynegy.

- Chevron Corp. said that it rang up a record quarterly profit of $5.4 billion, primarily thanks to soaring gasoline prices and gains from an investment sale. The oil giant's net income for the second quarter that ended June 30, equal to $2.52 a share, was up 24% from the $4.4 billion, or $1.97 a share, it earned in the year-earlier period. With those results, Chevron set a new high for quarterly earnings, surpassing the $5 billion it earned in the third quarter of 2006. The San Ramon, Calif.-based company is on pace to beat last year's record annual income of $17.1 billion. Chevron 's report capped another week of strong earnings from the world's biggest publicly owned oil companies, even though the lack of one-time items caused profit at Exxon Mobil Corp. to come in lower than in the second quarter of 2006. Profits have been surging industrywide over the last three years, with oil and natural gas prices rising far more quickly than the cost of extracting and selling the commodities. Chevron's flagship business of exploring for and producing oil and natural gas remained the company's biggest money maker, but the headliner for the quarter was the refining and marketing segment, which makes and sells gasoline, diesel and other oil byproducts. The high retail prices that have sparked renewed grumbling from consumers yielded Chevron's strong results. Income from the company's refining and marketing operations jumped 30% to $1.3 billion. Much of the strength came from U.S. operations, where quarterly profit from the manufacture and sale of gasoline rose to $781 million, up 41% from $554 million in the year-earlier quarter. Chevron curtailed production at its El Segundo refinery for the last month of the quarter to conduct maintenance and upgrades — but brought in imports and kept producing some gasoline at the plant. Oil company critic Judy Dugan was quick to condemn the higher refining profits. Since the end of June, retail gas prices have eased nationwide, but oil prices have jumped back up, closing Friday at $77.02 a barrel, just a penny shy of the record high close set last July. Chevron's second-quarter earnings also benefited from a net gain of $520 million stemming from $680 million in income from the sale of Dynegy Inc. shares and a $160-million loss on the redemption of debt. Not counting those items, Oppenheimer & Co. analyst Fadel Gheit said Chevron's earnings totaled $4.9 billion, or about $2.27 a share — below analysts' average estimate of $2.30, according to a survey by Thomson Financial.The company's exploration and production business recorded $3.6 billion in income for the quarter, an 11% increase from $3.3 billion in the second quarter of 2006. Total worldwide production equated to 2.63 million barrels of oil a day for the three months, down about 1% because of lower U.S. production and ownership changes at its Venezuelan venture.Revenue rose almost 5%, to $56.1 billion. The company also bought back $1.75 billion of its own shares. Chevron stock closed down $2.26 to $85.20

August

• Upstream news:

­- Chevron Corporation (NYSE: CVX) announced that its subsidiary Cabinda Gulf Oil Company Limited (CABGOC) and partners made a significant oil discovery in Block 14, offshore Angola. The discovery well, Malange-1, was drilled in December 2006 in 873 feet (266 meters) of water to a total vertical depth of 15,562 feet (4,743 meters). The well encountered 212 net feet (64.6 net meters) of oil in the Cretaceous-age Pinda reservoir. The well was tested in March 2007 and flowed high-quality crude at a rate of 7,669 barrels of oil per day (BOPD). Further drilling is planned, in addition to geologic and engineering studies, to appraise the discovery and assess its potential reserves.

• Downstream news:

- Chevron Corporation (NYSE: CVX) announced the completion of the sale by its subsidiaries in Belgium, the Netherlands and Luxembourg (Benelux) of their fuels marketing business to Dutch company Delek Benelux B.V., a subsidiary of Israeli company Delek Group. The amount paid to Chevron on the close date of August 8, 2007, was USD $516 million, which excludes a final adjustment amount expected to be settled by the end of the year. Under the previously announced share sale agreement, Delek Benelux B.V. acquired Chevron's Benelux fuel marketing operations, which include 803 Texaco®-branded service stations, two fuel terminals in Belgium and Luxembourg, interests in six joint-venture retailers in the Netherlands, as well as other related assets. Chevron will retain its lubricants, aviation, fuel and marine marketing, Oronite additives and upstream businesses in Europe.

- Chevron Corporation (NYSE:CVX) announced the start of commercial production at its 110-megawatt (MW) Darajat III geothermal power plant in Garut, West Java, Indonesia. Production from the Darajat III unit, operated by Chevron's subsidiary Chevron Geothermal Indonesia, Ltd., increases the total capacity at the Darajat geothermal facility to 259 MW. The combined output from Chevron's Darajat and Salak geothermal operations now produces sufficient renewable energy to supply approximately 3.9 million homes in Indonesia.

- Emergency response teams have contained a fire that broke out in a crude unit at the Chevron refinery in Pascagoula, Mississippi. All Chevron employees and contractors have been safely accounted for and there were no injuries. The Jackson County Sheriff's Department is on site and the appropriate agencies and local community have been notified. Chevron's primary concern is to ensure the safety of its employees and the surrounding community. The cause of the fire is under investigation. As soon as there are further details, they will be made available. The Pascagoula Refinery is Chevron's largest wholly owned petroleum refinery, processing an average of 330,000 barrels of crude oil per day and producing a variety of transportation fuels and other refined products.

- An initial investigation and assessment of the fire at Chevron's refinery in Pascagoula, Miss., is underway. The Pascagoula refinery remains operational but with reduced capacity. Refinery equipment in the immediate vicinity of the fire, including the No.2 crude unit, is not currently in operation. The crude unit is currently being assessed and a plan is being developed to bring the affected unit online. Chevron would like to extend its thanks to the responding agencies, including the Jackson County Sheriff's Department, the Pascagoula Fire Department and the Mississippi Department of Environmental Quality, for their role in ensuring the incident was managed safely. The fire in the refinery's No.2 crude unit was extinguished at approximately 8:50 p.m. CDT, Aug 16, following a controlled burnout. Chevron will conduct a thorough investigation of the cause of the fire in coordination with the appropriate local, state and federal agencies.

- Chevron Energy Solutions, a unit of Chevron Corporation (NYSE: CVX), announced the completion of a comprehensive project for the state of Colorado that significantly improves the energy efficiency of key government facilities across the state. The extensive upgrades to 20 state buildings are expected to reduce energy costs at the facilities by 25 to 30 percent, saving state taxpayers $924,000 annually and more than $20 million over the next two decades. The upgrades also will reduce the facilities' demand for energy from local utilities, leading to an expected reduction of about 8,000 metric tons in utility carbon dioxide emissions - equivalent to removing 1,500 cars from the road. The $13.6 million project, coordinated through the state's Department of Personnel and Administration, began in 2003 and is funded entirely by the energy savings generated by the efficiency improvements. Under the project, Chevron Energy Solutions completed extensive upgrades to 16 buildings in Denver, three in Lakewood and one in Grand Junction. The improvements included upgrading lighting systems; replacing boilers, chillers and piping (some dating to the 1920s); and installing new energy-management systems. Along with the annual energy savings, the state's building operations are benefiting from improved interior lighting quality and comfort, reduced maintenance needs, and removal of abandoned equipment and asbestos in some locations. In addition, a small portion of the energy savings is funding the installation of a 10-kilowatt photovoltaic solar system at the governor's residence.

- Chevron has successfully restarted several process units previously shut down at its refinery in Pascagoula, Miss., after a fire broke out at the facility on August 16. The fire damage was largely isolated to the No. 2 crude unit. Damage assessment and plans and preparations for the repair work are progressing. Based on preliminary findings, it could take several months to complete repairs. The company is working to minimize the impact on the refinery's crude suppliers and expects some crude shipments may be cancelled or re-routed to other refineries in the company's global network. Chevron is seeking to optimize the utilization of the refinery while repairs are being made. The company has covered its supply requirements and fully anticipates meeting all of its customer product commitments. There were no injuries related to the fire and all refinery employees and contractors were accounted for following the incident. Chevron is conducting a thorough investigation of the cause of the fire in coordination with the appropriate local, state and federal agencies.

• Business/Finance news:

- The U.S. District Court for the Northern District of California threw out complaints against Chevron Corporation filed on behalf of three Ecuadorians, finding that the plaintiffs fabricated their claims that they or their relative had cancer caused by the former operations of a Chevron subsidiary, Texaco Petroleum Company, in Ecuador.The three plaintiffs -- Gloria Chamba, Luisa Gonzales and Gonzales's husband, Nixon Rodriguez Crespo -- were among a group of seven Ecuadorians who brought personal injury claims against Chevron. According to the lawsuits filed against Chevron, Ms. Chamba claimed that her son was diagnosed with leukemia, Ms. Gonzales claimed to have been diagnosed with breast cancer, and Mr. Crespo's claim was for "loss of consortium" related to his wife's cancer claim.

- Chevron Corporation (NYSE: CVX) announced that John S. Watson will become executive vice president, Strategy and Development, reporting to Dave O'Reilly, chairman and chief executive officer. The new position will take effect January 1, 2008. Watson, 50, is currently president of Chevron International Exploration and Production. In his new position, Watson will oversee business development, mergers and acquisitions, strategic planning and the Project Resources Company, which supports the development of major capital projects within Chevron. Chevron also announced that it will restructure its global upstream operations into four operating companies to strengthen the company's focus on long-term growth opportunities and enhance key business partnerships.

- Chevron Corporation (NYSE: CVX) announced that its subsidiaries Chevron U.S.A. Inc. and Chevron Credit Bank, N.A. reached agreements to sell their respective proprietary credit card businesses. Chevron has selected GE Money Bank, N.A. to own and operate its Chevron®- and Texaco®-branded consumer credit cards and FleetCor Technologies Operating Company, LLC to own and operate its branded commercial credit cards. The transactions are subject to certain approvals, including regulatory, and are expected to close later this year.

September

• Upstream news:

­- Chevron Australia as operator for the Gorgon Project today received advice received from the West Australian Minister for the Environment, that he had issued state environmental conditions for the Gorgon Project. Colin Beckett, Chevron Australia General Manager for the Greater Gorgon Area, welcomed the announcement noting that the conditions were some of the most stringent imposed on a major project anywhere in the world. The Gorgon Project is globally significant with an estimated resource base of more than 40 trillion cubic feet of gas and a nominal development life of around 60 years. It is operated by the Australian subsidiary of Chevron in a joint venture with Australian subsidiaries of ExxonMobil and Shell.

• Downstream news:

• Business/Finance news:

- Chevron Corporation (NYSE:CVX), in conjunction with The Economist Group, launched Energyville, an interactive online game that challenges players to meet the energy needs of their own city. Energyville, developed using data and content provided by the Economist Intelligence Unit, The Economist Group's research arm, examines the economic, environmental and security trade-offs and opportunities associated with different energy sources. To power Energyville's homes, offices, factories and vehicles, players must balance the same competing demands faced by policymakers, businesses and consumers every day.The game spans a period from the present day to 2030, with players managing the energy supply for their growing city through random events that affect their choices and highlight the consequences of their actions. Energyville is hosted on www.willyoujoinus.com, an energy discussion forum that Chevron created.

- Chevron Corporation (NYSE: CVX) announced that its Board of Directors approved a program to acquire up to $15 billion of the company's common stock over a period of up to three years. This program follows three stock repurchase programs of $5 billion each that were completed in 2005, 2006 and September 2007.

- Chevron Corporation (NYSE: CVX) announced a new integrated global advertising campaign this week aimed at engaging people in today's energy issues and highlighting the steps Chevron is taking to bring more energy supplies to the global marketplace. The campaign, called the "Power of Human Energy," will launch on television in the United States on Sept. 30 and internationally on Oct. 5.

- Unocal 76 launched a new brand advertising campaign today that focuses on customer service, defying the conventional wisdom that gasoline performance drives sales. The television and radio spots, developed by renowned advertising firm TWBA Chiat/Day, are now running throughout Southern California. The campaign is expected to air in Northern California in the next few months. Dubbed "We Get It," the campaign emphasizes the "little things" that customers want from a service station -- things like squeegees and soapy water on every service island; plenty of paper towels; and clean, well- stocked restrooms.

- The Chevron Corporation will repurchase as much as $15 billion of its stock as record crude prices increase earnings. The three-year buyback program comes after stock repurchases of $5 billion each in 2005, 2006 and September 2007, Chevron, based in San Ramon, Calif., said yesterday. Chevron, Exxon Mobil and other oil companies are using buybacks to raise the value of their shares as gains in earnings outpace increases in spending. Exxon Mobil is buying back about $7 billion of its stock each quarter. ConocoPhillips said in July that it would spend $15 billion repurchasing shares through 2008. Buybacks tend to raise earnings per share and increase the value of equity in a company by reducing the amount of stock outstanding. Chevron rose 63 cents, to $92.51.

October

• Upstream news:

­- The Gorgon Joint Venture Participants - Chevron, ExxonMobil and Shell - today welcomed a further step forward for the Gorgon Project. The Federal Minister for the Environment the Hon. Malcolm Turnbull, has issued Australian government approval for the Gorgon Development Proposal on Barrow Island sourcing gas from the Gorgon Joint Venture resources located off Australia's northwest coast. Colin Beckett, Chevron Australia General Manager for the Greater Gorgon Area, speaking on behalf of the Joint Venture Participants, said that the Minister's decision was a welcome outcome after four years of rigorous state and federal assessment which has produced a comprehensive environmental management regime.

- Chevron Corporation (NYSE:CVX) was advised of the Federal Minister for the Environment's decision to issue Australian government environmental approval for the Gorgon liquefied natural gas (LNG) development proposal located off the northwest coast of Australia. The Federal Minister for the Environment's decision follows state environmental approval received from the West Australian Minister for the Environment earlier in September.

- Chevron Corporation (NYSE: CVX) announced that it expects first production from its Tahiti project in the deepwater Gulf of Mexico by the third quarter of 2009, approximately 12 months later than the original date that was planned prior to the discovery of defective shackles in the facility's mooring system. With a recoverable resource ranging from 400 million to 500 million barrels of oil-equivalent, the Tahiti field is believed to be one of the Gulf's largest deepwater discoveries. The field, located approximately 190 miles south of New Orleans and in more than 4,000 feet of water, is intended to be developed from two subsea drill centers producing to a floating production facility supported by a truss spar. The Tahiti facilities are designed to have a daily production capacity of 125,000 barrels of crude oil and 70 million standard cubic feet of natural gas. The installation of Tahiti's truss spar was delayed in June 2007 when testing revealed a metallurgical problem with the mooring shackles.

- Chevron Corporation (NYSE: CVX) announced that its subsidiary Chevron Thailand Exploration and Production, Ltd, its co-concessionaires and the Thai Ministry of Energy have signed an agreement to extend the production period of four offshore blocks in the Gulf of Thailand for an additional 10 years, from 2012 to 2022. The extension of these leases in block numbers 10, 11, 12 and 13 facilitates Chevron's long-range plans to boost production from this area to more than 1 billion cubic feet of natural gas per day. The offshore blocks encompass Erawan, Satun, Funan, Banpot, Plamuk, Yala, Pla Daeng, and Platong operating areas in the Gulf of Thailand. Chevron has working interests in the operating areas within these blocks ranging from 60 percent to 80 percent.

• Downstream news:

- Chevron Energy Technology Company, a Chevron Corporation (NYSE: CVX) subsidiary, today announced that it has formed a research alliance with the Penn State Institutes of Energy and the Environment to research coal conversion technologies. The joint research initiative will focus on coal chemistry and conversion technology, advanced fuels, combustion, analysis methods, reactor science, separations, process technology, and CO2/greenhouse gas management and conversion. The alliance also will integrate research with educational and career opportunities for students and graduates specializing in coal conversion and energy technologies. Under the alliance, Chevron will provide up to $17.5 million over the next five years to the university.

- Chevron U.S.A. Inc. announced plans to build a major gasoline production unit at its refinery in Pascagoula, Miss. With environmental permits in place, construction of the Continuous Catalyst Regeneration (CCR) Project, estimated to cost around $500 million, is due to begin in early 2008 with completion anticipated by mid-2010. The new CCR unit will improve equipment reliability and utilization, and allow the refinery to optimize product yields. Gasoline production at the refinery is expected to increase by approximately 10 percent, or about 600,000 gallons per day. "Chevron continues to make significant investments at its refinery in Pascagoula, as well as foster economic development within the local community," said Roland Kell, Pascagoula Refinery general manager. "The project also will provide about 700 new construction jobs in addition to the 150 jobs we already have added at the facility over the past two years." The new unit with updated refinery technology will replace two process units constructed more than 30 years ago. Crude oil capacity at the refinery will remain the same. Since 2005, Chevron has executed other projects that have increased its gasoline manufacturing capacity in the United States by about 1 million gallons per day. In late 2006, the Pascagoula Refinery completed upgrades to its Fluid Catalytic Cracking unit, increasing its gasoline production by roughly 10 percent to about 5.5 million gallons per day. Chevron is continuing to evaluate other potential opportunities to further enhance the competitive position of its Pascagoula Refinery and global refining network.

- Following further damage assessments of its Pascagoula Refinery after a fire broke out at the facility on August 16, Chevron expects repairs to the refinery to be completed during the first quarter of 2008. The fire damage was largely isolated to the refinery's No. 2 crude unit. Plans and preparations for the repair work are underway and progressing. Additional conversion units, which were already off line for planned turnaround activities, have since been re-commissioned to increase the production of gasoline and distillates from the facility. The Chevron system of manufacturing plants and downstream infrastructure is being utilized to minimize the impact on the crude suppliers as well as optimize the refinery's utilization rates while the repairs are made. The company has covered its supply requirements and fully anticipates continuing to meet all of its customer product commitments. Chevron is still in the process of conducting a thorough investigation of the cause of the fire in coordination with the appropriate local, state and federal agencies.

- The Alameda-Contra Costa Transit District (AC Transit) and Chevron Products Company launched the Cleaner Fuels Test Program, which will study two alternative fuels in a fleet of buses traveling Bay Area roadways. During the six-month study, AC Transit will test a biodiesel fuel blend and GTL (gas-to-liquids) diesel in a fleet of 22 unmodified diesel buses. Chevron will provide the fuels and engine manufacturer Cummins Inc. will provide engine assessments and technical consulting. It's anticipated the test buses will transport more than 1.5 million passengers, travel over 400,000 miles and consume more than 100,000 gallons of alternative fuels during the study period. The pilot program is unique because it provides the opportunity for an end-user, a fuel provider and an engine manufacturer to collectively learn more about the characteristics, distribution, efficiency and emissions of biodiesel and GTL diesel. In addition to understanding the potential emissions benefits of these fuels, the program will help guide future alternative fuel solutions by giving participants invaluable operational experience in such critical areas as fuel handling, blending and storage. The Cleaner Fuels Test Program builds on the successful partnership between AC Transit and Chevron with the HyRoad Fuel Cell Demonstration Program. Through the groundbreaking program, Chevron built hydrogen production and fueling facilities that have been powering AC Transit's fleet of zero-emission hydrogen fuel cell buses since January 2006.

- Chevron Corporation (NYSE: CVX) and the U.S. Department of Energy's National Renewable Energy Laboratory (NREL) announced that they have entered into a collaborative research and development agreement to study and advance technology to produce liquid transportation fuels using algae. Chevron and NREL scientists will collaborate to identify and develop algae strains that can be economically harvested and processed into finished transportation fuels such as jet fuel. Chevron Technology Ventures, a division of Chevron U.S.A. Inc., will fund the initiative. The research project announced is the second under a five-year strategic biofuels research alliance between Chevron and NREL announced in October 2006. The first involves bio-oil reforming, a process by which bio-oils derived from the decomposition of biological feedstocks are then converted into hydrogen and biofuels.

• Business/Finance news:

- Chevron supports the calls for a peaceful resolution to the current situation in Myanmar in a way that respects the human rights of the people of Myanmar. Chevron's minority, non-operated interest in the Yadana Project is a long term commitment that will help meet the critical energy needs of millions of people in the region. Our community development programs also help improve the lives of the people they touch and thereby communicate our values, including respect for human rights.The Yadana Project partners have invested in a model socio-economic program that positively improves people's lives in Myanmar. The Yadana project community development programs have delivered the following benefits: 50,000 people along the Yadana pipeline now have free and improved healthcare; Ten doctors now work in villages when there were none and thirty-three health care workers have been trained; Local infant mortality rate is 1/6th the national rate; Malaria mortality rates down by a factor of 10; TB mortality rate halved since 2002; Student enrollment in schools has doubled; Forty-four schools have been built and 20 renovated in 23 villages; Financial support to 350 teachers, library program to 16 schools, scholarship program for 1,050 pupils and computers at 8 schools; Improvements to local roads and the building of 24 bridges have resulted in both public and private transportation that was nearly nonexistent before the pipeline project; 6,300 projects loans for small businesses have been granted resulting in numerous enterprises that help generate economic development for local communities. Chevron also separately funds community programs on a regional level in Myanmar through support for PACT*, an international NGO. The PACT program includes a primary health/TB/HIV education and treatment program for 400,000 people in central Myanmar. The program has yielded considerable results with TB control rates dramatically higher than non-participating villages. Chevron's continued support will enable PACT to expand its work three-fold to 2,122 rural villages in 15 townships, eventually reaching an estimated population of 1.8MM people.

- Chevron Corporation (NYSE:CVX) filed a petition in an Ecuador Superior Court seeking dismissal of an ongoing environmental lawsuit that has descended into a judicial farce, constituting a denial of Chevron's right to a fair and impartial trial based on evidence and the rule of law. Chevron's petition to dismiss cites multiple examples of inappropriate interference in the civil proceeding by the executive branch of the government, judicial misconduct and misconduct by the plaintiffs' attorneys as well as their technical staff. The petition also argues that the court has failed to recognize the overwhelming volume of admissible evidence and irrefutable legal defenses that exonerate Chevron and cites the court's lack of jurisdiction, lack of due process and demonstrated bias (see Note to Editors). Chevron's legal team has demonstrated through volumes of credible scientific evidence that the allegations of the plaintiffs' attorneys are without merit. The petition outlines a long list of actions during the trial that, taken together, constitute a denial of justice.Further, the petition states that Petroecuador, which has exclusively owned the oil fields since 1992 and has operated them for more than 17 years, never fulfilled its remediation obligations and has operated the oil fields in a manner that has caused numerous environmental problems, including frequent spills. Petroecuador officials admitted publicly that Petroecuador - not Texaco Petroleum Co. (Texpet, a third-tier subsidiary of Texaco Inc.) - is responsible for cleaning up the remaining well sites in the former Consortium area that were not remediated by Texpet. In its petition, Chevron describes the various efforts of the plaintiffs' attorneys and their supporters to politicize the lawsuit by convincing senior members of the government of Ecuador to offer their support to the civil lawsuit. For example, in April 2007, plaintiffs' attorneys, activists and senior members of the Ecuadorian government held a joint news conference and a highly publicized visit to certain former Petroecuador-Texpet consortium sites. With the plaintiffs' supporters at their side during one of these visits, senior members of the administration offered "the national government's full support" to the plaintiffs. Also in April, the executive branch of the government issued a news release announcing the government's intention to provide plaintiffs with "assistance in gathering evidence" against Chevron. Chevron's petition argues that the court's failure to follow the law of Ecuador or even its own procedural orders casts serious doubt over its adherence to the rule of law. The failure to address legitimate legal defenses, while simultaneously absolving plaintiffs of any obligation to substantiate their claims with legally qualified evidence, amounts to a clear denial of justice for Chevron. If not addressed by the court, these violations of the most basic and fundamental principles of universal justice will destroy any legal legitimacy for the results of this proceeding and sentence the litigants on both sides to a lifetime of appellate and collateral litigation. Accordingly, Chevron has requested the judge to dismiss the lawsuit in its entirety.

- Chevron Corporation (NYSE:CVX) reported in its interim update for the third quarter 2007 that net income is expected to be significantly below the record $5.4 billion earned in the second quarter 2007. The lower projected earnings are mainly the result of a sharp decline in refined-product margins for the downstream business and the impact of nonrecurring items. In the second quarter, nonrecurring items included a benefit of $680 million from the company's sale of its common stock investment in Dynegy Inc. Third quarter results are expected to include an approximate $260 million gain on the sale of the company's marketing assets in the Benelux countries. Nonrecurring net charges in the third quarter are projected to be approximately $700 million. These charges include asset impairments, environmental remediation provisions, income tax adjustments, asset retirement obligations, and severance provisions.

- Chevron said that it expected its third-quarter net income to be significantly below the $5.4 billion it earned in the second quarter, because of a sharp drop in its refining margins. The company, an oil and gas producer, said in an interim report that one-time items also should hurt earnings. Refining margins are expected to be a drag on third-quarter earnings for integrated oil and gas producers as well as independent refiners as refining margins dropped by more than half from second-quarter levels in some United States regions. The amount of oil Chevron processed at American refineries fell about 8 percent, to 812,000 barrels a day, mostly because of planned and unplanned shutdowns. Shares of Chevron fell 2.1 percent, to $90.83, in after-hours trading.

- Chevron supports the calls for a peaceful resolution to the current situation in Myanmar in a manner that respects the human rights of the people of Myanmar. Chevron's interest in the Yadana natural gas project is long-term and we are committed to helping meet the energy needs of millions of people in the region and to play a constructive and positive role in local communities. Through the project, Chevron supports critical health, economic development, and education programs that make substantive and positive improvements to the lives of 50,000 people in the Yadana project communities. Sanctions that require Chevron to sell its interest in Yadana would not affect Yadana operations or the revenues produced by the project. If Chevron were to sell its interest it could generate hundreds of millions of dollars in additional revenue for the Government of Myanmar and endanger important social and economic development programs. As a number of academics and organizations have stated recently, attempts to isolate Myanmar further is likely to be counterproductive. Chevron believes that social and economic development are interrelated. Constructive engagement, together with development programs and support, will ultimately contribute to peace and prosperity for the people of Myanmar.

- The U.S. District Court for the Northern District of California has imposed sanctions against three attorneys, including Cristobal Bonifaz, for fabricated cancer claims against Chevron. Bonifaz is the architect of the ongoing litigation against Chevron in Ecuador. The lawsuits relate to Texaco Petroleum Company's former operations in the country. The sanctions against the lawyers, which include a $45,000 fine, follow an August ruling by the same Court dismissing three personal injury claims against Chevron because they were knowingly false. One never had been diagnosed with breast cancer, as alleged. The second falsely claimed that her son had leukemia. The third admitted that he had no injuries, contrary to his allegations in the complaint. In his ruling imposing the sanctions, Judge William Alsup declared that the cancer claims brought by three attorneys, Cristobal Bonifaz, Terry Collingsworth and Paul Hoffman, "were baseless and made without reasonable and competent inquiry."

- Chevron Corporation (NYSE:CVX), committed $500,000 to support relief efforts in the communities affected by the Southern California wildfires. The commitment includes a $400,000 contribution to the American Red Cross Disaster Relief Fund that will support wildfire relief efforts across Southern California and a $100,000 contribution that will be directed towards local charities and relief efforts in the communities where Chevron operates. In addition to the $500,000 contribution, Chevron is providing immediate in kind support to those communities that have been evacuated with the provision of 20,000 bottles of water and 11,500 meals. Chevron's Richmond Refinery has also dispatched a firefighting team and an engine to Southern California under a mutual aid program.

- The Board of Directors of Chevron Corporation (NYSE: CVX) declared a quarterly dividend of 58 cents per share. The dividend is payable December 10, 2007, to holders of common stock as shown by the transfer records of the Corporation at the close of business November 16, 2007.

- Myanmar's junta broke its isolation of detained opposition leader Aung San Suu Kyi and held the first official talks since locking up the pro-democracy advocate more than 18 years ago. The meeting was broadcast, without audio, by state-run television and showed Suu Kyi and the military regime's labor minister, Aung Kyi, sitting in high-back chairs and having a discussion for more than an hour in a state guest house. Suu Kyi was not allowed to make a public statement. The meeting was arranged after the shooting of peaceful protesters in Myanmar last month triggered international outrage and prompted the United Nations to send an envoy to urge reforms. The military government named Aung Kyi, a retired general, as its official liaison for dialogue with Suu Kyi. The government says 10 people were killed in the crackdown, but human rights groups and Western governments contend that the death toll is higher. Seen as a moderate and a problem-solver, Aung Kyi also has been the junta's point man handling foreign complaints over the military's alleged use of forced labor. Suu Kyi was first detained without charge in July 1989, when the country was under martial law. The previous year, she had led hundreds of thousands of pro-democracy demonstrators when the procession at her mother's funeral became an anti-junta march. Thousands of peaceful protesters were killed in the 1988 protests. In 1990, Suu Kyi led her National League for Democracy to a landslide election victory while under house arrest. She won the Nobel Peace Prize the following year. Thursday's apparent move toward a new dialogue came just days before U.N. special envoy Ibrahim Gambari is due to return to Myanmar to press international demands for negotiations between the junta and pro-democracy leaders. The military has ruled Myanmar, also known as Burma, since 1962. After Gambari met with junta leader senior Gen. Than Shwe on Oct. 2, state media reported that the military was prepared to hold direct talks with Suu Kyi if she dropped her demand for international sanctions. But Suu Kyi's National League for Democracy insisted she would not accept any preconditions for a dialogue, and there was no public indication Thursday that her position had changed. Zalmay Khalilzad, the U.S. ambassador to the U.N., recently warned Myanmar's generals it was time to prepare for a transition of government, while conceding that the military would have "its role to play in the transition and post-transition." Some governments in the region have suggested the ruling generals could share power with a civilian government, just as they do behind the scenes in Indonesia, where the military dominates an elected government. In a report Thursday, New York-based Human Rights Watch said that the army was recruiting children as young as 10 because of pressure to expand its ranks amid a high desertion rate. Targeting children at bus stations, markets and other public places, recruiters "often threaten them with arrest if they refuse to join the army. Some children are beaten until they agree to 'volunteer,' " Human Rights Watch charged. Child soldiers usually receive 18 weeks of training, and some are quickly sent into combat against ethnic insurgents, the report added. "Those who attempt to escape or desert are beaten, forcibly re-recruited, or imprisoned," the rights group said. Myanmar's junta summoned Suu Kyi after Russia and China, which both have veto power on the U.N. Security Council, repeated Wednesday that they do not support demands for sanctions against the military regime. India, an important trading partner that borders Myanmar, joined Russia and China in calling the violent crackdown against pro-democracy activists an internal matter. Opposition to sanctions is also strong among some of Myanmar's closest neighbors in the Assn. of Southeast Asian Nations, which account for the overwhelming majority of trade with Myanmar. The U.S. and European Union recently strengthened sanctions against the military regime. But human rights activists say they are still not tough enough, in part because they do not target foreign companies tapping lucrative oil and natural gas fields there. The generals profit directly from energy deals with companies that include California-based Unocal, a subsidiary of Chevron. Natural gas accounted for half of Myanmar's exports last year, according to Human Rights Watch.

November

• Upstream news:

­

• Downstream news:

• Business/Finance news:

- Chevron Corporation (NYSE:CVX) announced that John McDonald, currently vice president of Strategic Planning, will become chief technology officer, succeeding Donald Paul, who will retire from the company in 2008 after more than 32 years of service. Paul Siegele, currently vice president of Deepwater Exploration/Projects, will replace McDonald. McDonald and Siegele will assume their new roles on Jan. 1.

- Chevron Corporation (NYSE: CVX) reported net income of $3.7 billion ($1.75 per share – diluted) for the third quarter 2007, compared with $5 billion ($2.29 per share – diluted) in the year-ago period. Results for the 2007 quarter included approximately $400 million ($0.19 per share) of net charges associated with nonrecurring items, about the same amount recorded for such items a year ago. For the first nine months of 2007, net income was $13.8 billion ($6.45 per share – diluted), compared with $13.4 billion ($6.06 per share – diluted) in the corresponding 2006 period.

- The Chevron Corporation said that its third-quarter earnings fell 26 percent, missing analysts’ estimates, on sharply lower profits from gasoline production. Margins to produce gasoline and other refined products fell during the quarter as prices for the fuel failed to keep pace with surging crude oil prices, dragging down earnings across the industry. Chevron said its net income fell to $3.72 billion, or $1.75 a share, from $5.02 billion, or $2.29 a share, in the period a year earlier. Excluding about $400 million for one-time items, it posted earnings of about $1.94 a share, short of the $2.07 expected by analysts. Revenue in the quarter rose to $55.17 billion from $54.21 billion. Chevron’s chief executive, David J. O’Reilly, said in a statement that the company had difficulty recovering its higher fuel costs because the market in the United States was well-supplied with gasoline. Chevron’s refineries in the United States processed 168,000 fewer barrels of oil a day than last year, partly as a result of a fire at its Pascagoula, Miss., refinery in August and a planned shutdown at its refinery in El Segundo, Calif. Profit from its exploration and production unit dipped to $3.43 billion from $3.5 billion last year. Chevron’s worldwide production dropped about 4 percent, to 2.6 million barrels a day, mainly as a result of changes to the company’s operating agreements in Venezuela. Shares of Chevron, which is based in San Ramon, Calif., fell 56 cents, to $88.48.

- Chevron, the oil company, reported a 24 percent drop in third-quarter earnings, citing weaker refining margins. The disappointing performance followed a similarly weak report on Thursday from Exxon Mobil, whose profit declined 10 percent last quarter.

- The stock market rose bolstered by better-than-expected earnings from Wal-Mart Stores, a big stock buyback by Cisco Systems and analyst upgrades of some technology and energy stocks. Wal-Mart, the world's biggest retailer, reported strong earnings for the third quarter and forecast a robust holiday season on its strategy of discounting toys and other gift items. Cisco said Friday that it would repurchase up to $10 billion more of its shares. And a range of stocks, like Chevron, ConocoPhillips and Hewlett-Packard, received analyst upgrades. Wal-Mart rose 8 percent for the week, best among the 30 Dow industrials, followed by Hewlett-Packard, with a 4.9 percent gain.

- A federal judge in Louisiana handed the oil industry a major legal victory this week, saying the government had no authority to suspend billions of dollars’ worth of drilling incentives when energy prices were high. If upheld, the ruling could free companies from paying the government up to $60 billion in royalties for oil and gas produced in publicly owned waters of the Gulf of Mexico. The ruling, in a lawsuit brought by Kerr-McGee Oil and Gas Corporation, is not a final verdict. But the judge flatly rejected all of the government’s arguments, not only refusing to throw out the case but also agreeing with the oil company that the government had overstepped its authority. Royalties on oil and gas have become one of the government’s bigger sources of revenue after income and payroll taxes. Last year, such royalties totaled more than $10 billion, and high oil prices are likely to drive those numbers to a new peak this year. The Government Accountability Office, the investigative arm of Congress, estimated last year that an industry victory in the case could cost the government $60 billion over the next 20 years. But with oil prices now approaching $100 a barrel, and companies investing billions to develop new gulf fields, the losses to taxpayers could be considerably higher. At issue in the court battle is a 1995 law aimed at increasing oil and gas production in the Gulf of Mexico. Under that law, the Interior Department allows companies that drill in deep water to avoid paying a standard royalty on oil and gas from publicly owned waters — usually 12 percent to 16 percent of sales. But the government has also insisted that companies are not entitled to the incentive, known as royalty relief, if the market price of oil climbs above about $34 a barrel. Kerr-McGee sued the government last year, saying that Congress never authorized the Interior Department to impose the high-price restriction, even though lawmakers who drafted the law have often said that was their specific intent. The judge in Louisiana, Patricia H. Minaldi, rejected the government’s motion to throw out the case. In the ruling, Judge Minaldi wrote that Kerr-McGee, which Anadarko acquired last year for $21 billion, was correct and that the Interior Department had overstepped its authority. The judge also rejected all of the government’s technical justifications for the rules in the event that it lost the argument over its Congressional mandate. A victory for Kerr-McGee would apply to more than 50 companies, including industry giants like Exxon Mobil, Chevron, BP and Royal Dutch Shell. Chevron and its partners discovered a mammoth oil field last year that would be protected, but the court battle affects thousands of leases signed from 1995 through 2000. Because it takes so long for companies to explore and then develop a deepwater oil field, the oil and gas from those leases is just beginning to flow. Democratic lawmakers in Congress have been trying to address the oil and gas royalties as part of a broader energy bill, but the House and Senate have been stalled for months by differences on royalties and other issues. The House energy bill, passed early this summer, would prohibit companies from acquiring additional offshore leases if they did not agree to pay royalties during times of high prices. In the Senate, Republican lawmakers blocked Democrats this summer from including any provisions to raise taxes on oil companies.

- The U.S. District Court for the Northern District of California has dismissed the remaining two claims against Chevron alleging health impacts to Ecuadorian citizens resulting from Texaco Petroleum Company's Ecuadorian oil operations that ended in 1992. The ruling, based on California's two-year statute of limitations, effectively brings the matter to an end. The lawsuit is the third in a series of suits that has been launched by Cristobal Bonifaz, a Massachusetts-based trial attorney claiming to represent Ecuadorian plaintiffs. The U.S. District Court proceeding has been notable for its many irregularities, culminating in the Oct. 16, 2007 sanctions and fines levied against plaintiffs' counsel for presenting fabricated cancer claims.

- Chevron has agreed to pay $30 million to settle charges that it had made illegal kickbacks to Iraq for oil purchased in 2001 and 2002 under the United Nations’ oil-for-food program. The Securities and Exchange Commission said that Chevron had agreed to the settlement under the Foreign Corrupt Practices Act without admitting or denying the charges. But the United States attorney for the Southern District of New York said Chevron could still be prosecuted for criminal tax violations. Chevron, based in San Ramon, Calif., agreed to remit $25 million in profits and pay a $3 million civil penalty. The company will also pay $2 million to the Office of Foreign Asset Controls of the Treasury Department. Of the $25 million, Chevron will forfeit $20 million under an agreement with the United States attorney’s office in New York and pay $5 million under an agreement with the district attorney’s office in Manhattan. The S.E.C. said in its complaint that Chevron found out in 2001 that the Iraqi State Oil Marketing Organization was demanding surcharges and that the company adopted a policy prohibiting payment. The company then purchased, through intermediaries, about 78 million barrels of crude oil from Iraq under 36 contracts from April 2001 to May 2002. But these traders failed to follow the company’s prohibition against kickbacks, and Chevron’s management did not ensure compliance, the S.E.C. said. A company spokesman, Donald Campbell, said in a statement: “The U.S. government advises us that one former Chevron crude oil trader participated in transactions when he knew or should have known that surcharges were to be paid by the third-party merchants from which Chevron purchased the crude oil. The oil-for-food program, which ran from 1996 to 2003, was created to help Iraqis meet some basic needs under the United Nations sanctions imposed after Saddam Hussein’s 1990 invasion of Kuwait. The program let the Iraqi government sell oil primarily to buy humanitarian goods. It was later found that the program was often used as a means to funnel kickbacks. Four other companies have agreed to settle S.E.C. corruption charges stemming from suspected kickbacks to the Hussein regime: the El Paso Corporation, Textron, Ingersoll-Rand and York International, which was purchased in 2005 by the auto supplier Johnson Controls. Chevron’s financial penalty is by far the largest of the five.

- Chevron Corporation (NYSE:CVX) and Massachusetts Institute of Technology (MIT) announced an energy research program to develop remote, ultra-deepwater exploration and production technology. The $5 million Chevron Remote and Ultra-Deepwater Research Program will focus on developing the technologies required to access hydrocarbons in water depths up to and greater than 3,000 meters in a safe, cost effective and environmentally friendly manner. The program includes the sponsorship of two named fellowships -- the Chevron Energy Fellows – and makes Chevron a Sustaining Member of the MIT Energy Initiative (MITEI), which was created to address global energy issues. The five year program will also support MITEI's energy research seed fund to promote the development of a broad range of novel, innovative energy technologies and concepts across the Institute.

December

• Upstream news:

­- Chevron Corporation (NYSE: CVX) announced a $22.9 billion capital and exploratory spending program for 2008, a 15 percent increase from estimated outlays of $20 billion in 2007. Included in the 2008 program are $2.6 billion of expenditures by affiliates, which do not require cash outlays by Chevron's consolidated companies. O'Reilly said about 75 percent of the 2008 spending program is for upstream oil and gas exploration and production projects worldwide. Another 20 percent is dedicated to the company's downstream businesses that manufacture, transport and sell gasoline, diesel fuel and other refined products. The total budget for expenditures in the United States is approximately $8 billion.

- Chevron Corporation (NYSE:CVX) announced that its main Chinese subsidiary has signed a 30-year production-sharing contract with China National Petroleum Corporation (CNPC) for the joint development of the Chuandongbei natural gas area in central China. Chevron will take over the role of operator and hold a 49 percent participating interest and CNPC will hold a 51 percent interest in the project. The Chuandongbei gas development area covers nearly 2,000 square kilometers in the Sichuan province. Chuandongbei, which includes the Tieshanpo, Dukouhe-Qilibei and Luojiazhai gas fields, has an estimated resource base of 5 trillion cubic feet of natural gas. Design capacity at the proposed gas plants is expected to be 740 million cubic feet of natural gas per day.

• Downstream news:

- Chevron Corp. (NYSE: CVX) announced that the investors in the Angola liquefied natural gas (LNG) project have agreed to move the project forward to the construction phase. Cabinda Gulf Oil Company Limited, a wholly owned subsidiary of Chevron, has a 36.4 percent interest in Angola LNG Limited, which has entered into an investment contract with the Angolan government and Sonangol to develop the project. Other Angola LNG Limited shareholders are Sonangol with 36.4 percent interest and BP and Total, each with 13.6 percent interest. The Angola LNG project plans to commercialize dedicated Angolan natural gas resources by collecting and transporting gas located offshore Angola to an onshore liquefaction plant located in the Soyo region, Zaire Province. The project is designed to receive approximately one billion cubic feet of associated natural gas a day and produce approximately 5.2 million metric tonnes a year of LNG and related gas liquids products. It is expected to supply up to 125 million cubic feet a day of natural gas to Sonangol for domestic use in Angola.

• Business/Finance news:

- Chevron Global Marketing announced the launch of its new retail Web site -- ChevronwithTechron.com. The site features vibrant animation and new interactive elements such as an enhanced Station Finder, a virtual tour of an Extra Mile convenience store and "Ask Mr. Gasoline", a collection of frequently asked questions about gasoline answered by Chevron gasoline expert Lew Gibbs, also known as "Mr. Gasoline," and his colleagues.

- A vanguard group of universities is giving corporations greater access to ivory-tower laboratories — for a price. Stanford has paired with Exxon Mobil in a deal worth $100 million over 10 years. The University of California, Davis, is getting $25 million from Chevron. And Intel has opened collaborative laboratories with Berkeley, the University of Washington and Carnegie Mellon. The appeal of these arrangements is that “we get broad engagement with universities,” says Andrew A. Chien, Intel’s director of research. “Their researchers work on frontiers, in unexplored territory. We want explorers.”

- FOR THE RECORD: Political money: An article on Dec. 29, about ways in which special interest money is used, misidentified a nonprofit group that took state political leaders on a study tour to South America in November 2006. The group that sponsored the trip was the California Foundation on the Environment and the Economy, not the California Council for Environmental and Economic Balance. The article also said Chevron and its subsidiaries donated $343,000 to the council in 2006; in fact, that sum was given during 2005 and 2006. Chevron also donated to the foundation last year, but the company and foundation officials —who are not required by law to disclose the donations -- declined to specify how much.



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