Chevron News - 2010
News summaries from
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.
oilprimer.com makes no claim as to the authenticity of the information posted here, but provides it as a courtesy to our visitors. The information provided on this page was obtained from company-provided press releases and the New York Times and the Los Angeles Times, and is believed to be reliable, but we do not guarantee its accuracy. Neither the information, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any stock or option or any claim of authenticity. You are encouraged to contact the relevant corporations and news agencies for the most accurate information.
• Upstream news:
- Chevron Corporation (NYSE: CVX), through an Australian subsidiary, announced further exploration drilling success in the Greater Gorgon Area in the Carnarvon Basin offshore Western Australia. The Yellowglen-1 discovery well is located in the WA-268-P permit area approximately 150 miles (250 kilometers) northwest of Onslow. The well was drilled to a total depth of 9,050 feet (2,760 meters). Results indicate a gas column of approximately 450 feet (137 meters).
- Chevron Corporation (NYSE:CVX) announced that its Brazilian subsidiary will proceed with the development of the Papa Terra project as the company's second deepwater development offshore Brazil. Situated 70 miles (110 kilometers) offshore in water depths of approximately 3,900 feet (1,190 meters), Papa Terra is a heavy oil subsea development located within Block BC-20 of the southern Campos basin. The project will feature the first tension leg well platform in Brazil which will be connected to a floating production, storage, and offloading vessel. The completed facility will be capable of producing up to 140,000 barrels of crude oil per day. First production from the Papa Terra project is expected in 2013.
• Downstream news:
- Chevron Corporation (NYSE: CVX) announced that its Australian subsidiaries and Nippon Oil Corporation have signed a Heads of Agreement (HOA) for the delivery of 0.3 million metric tons per year (MTPY) of liquefied natural gas (LNG) for 15 years from the Chevron-operated Gorgon Project in Western Australia.
- Chevron Corporation (NYSE: CVX) announced that its Australian subsidiaries have signed multiple Heads of Agreements (HOAs) with Kyushu Electric Power Co., Inc. for the delivery of liquefied natural gas (LNG) from the Chevron-operated Gorgon and Wheatstone natural gas projects. Under the agreements, Kyushu Electric anticipates receiving 0.3 million tons per annum (mtpa) of LNG from the Gorgon Project, for 15 years. Under the agreement, Kyushu Electric also intends to acquire 1.83 percent of Chevron's equity share in the Wheatstone field licenses and a 1.37 percent interest in the Wheatstone natural gas processing facilities to be developed onshore near Onslow in northwestern Australia. Additionally, Kyushu Electric expects to purchase 0.7 mtpa of LNG from the Wheatstone Project for up to 20 years. This sales volume is net of the LNG that Kyushu Electric will lift as an equity participant in Wheatstone. Including this equity participation, Kyushu Electric will take delivery of 0.8 mtpa of LNG from the Wheatstone Project.
• Business/Finance news:
- Chevron Corporation (NYSE:CVX) reported in its interim update that earnings for the fourth quarter 2009 are expected to be lower than in the third quarter 2009. Upstream earnings are projected to be in line with third quarter results as the benefit of higher commodity prices is offset by the absence of gains recognized in the third quarter associated with formal approval of the Gorgon project in Australia. Downstream results are expected to be sharply lower, mainly due to significantly weaker refining margins.
- The Board of Directors of Chevron Corporation (NYSE: CVX) declared a quarterly dividend of sixty-eight cents ($0.68) per share, payable March 10, 2010, to holders of common stock as shown on the transfer records of the Corporation at the close of business on February 17, 2010.
- Chevron Corporation (NYSE: CVX) reported earnings of $3.07 billion ($1.53 per share - diluted) for the fourth quarter 2009, compared with $4.90 billion ($2.44 per share - diluted) in the fourth quarter 2008. Earnings in the 2008 quarter included a gain of approximately $600 million on an upstream asset-exchange transaction. Foreign-currency effects reduced earnings in the 2009 quarter by $67 million, compared with a benefit to income of $478 million a year earlier. Full-year 2009 earnings were $10.48 billion ($5.24 per share - diluted), down 56 percent from $23.93 billion ($11.67 per share - diluted) in 2008.
• Upstream news:
- Chevron Corporation (NYSE:CVX) announced that a consortium led by its Venezuelan subsidiary has been selected to negotiate its participation in a project composed of three blocks in the Orinoco Oil Belt (Faja) of eastern Venezuela. Situated in the eastern area of the Faja, approximately 40 miles (65 kilometers) to the northeast of the city of Puerto Ordaz, the three blocks have a combined area of 215 square miles (557 square kilometers).
• Downstream news:
- Chevron Corp.'s emerging technologies unit will build the largest U.S. power plant that uses lenses to focus sunlight onto photovoltaic cells, company officials said. Chevron Technology Ventures will build the 1 megawatt concentrating photovoltaic power array on the tailing site of Chevron Mining Inc.'s molybdenum mine in Questa, N.M. The project will use lenses --- instead of mirrors, like those employed at solar thermal arrays --- to focus sunlight onto 175 photovoltaic panels. Germany's Concentrix Solar GmbH will provide the concentrating photovoltaic system. Financial terms of the deal were not disclosed. Chevron plans to break ground on the 20-acre project this spring and complete construction by the end of the year. The company will simultaneously evaluate various soil cover depths for the closure of the tailing facility at the end of mining operations. Chevron will sell the array's power to the Kit Carson Electric Cooperative, which serves about 30,000 members in three northern New Mexico counties. The array will be the largest concentrated photovoltaic (CPV) installation in the United States and one of the largest in the world, Chevron Technology Ventures President Des King said. The technology is expected to work best in areas such as New Mexico's desert, which have high direct solar radiation.
• Business/Finance news:
- Chevron Corporation (NYSE: CVX) named Matthew J. Foehr as corporate vice president and comptroller, effective April 1. Foehr succeeds Mark A. Humphrey, who is retiring from the position after 34 years with the company. In his new role, Foehr's responsibilities will encompass corporatewide accounting, financial reporting and analysis, and internal controls. Foehr, who is currently vice president of finance for Chevron's Global Upstream and Gas business, will also oversee Finance Shared Services in his new capacity.
- In a court filing in Lago Agrio, Ecuador, Chevron Corp. (NYSE:CVX) provided newly discovered information showing that the author of a report recommending that Chevron be ordered to pay $27 billion in damages is the majority owner of an oilfield remediation company that stands to gain financially from a judgment against Chevron. Due to the remediation company's relationship with Ecuador's state-owned oil company, Petroecuador, Chevron called upon the court to immediately reject the work of Richard Cabrera on the grounds that he knowingly hid his relationship and that he stands to gain from what was supposed to be unbiased work for the court.
- Chevron Corporation (NYSE: CVX) announced that executive vice president, Charles A. James, will leave the company effective May 2, 2010. James, who intends to retire from the active practice of law, will join the adjunct faculty of the law school at Arizona State University and pursue other charitable ventures. This move is part of a planned transition under which James led the recruitment of his successor, R. Hewitt Pate, vice president and general counsel. Pate joined the company in August 2009 and has reported to James during this transition period.
• Upstream news:
- Chevron Corporation (NYSE:CVX) enters the decade with an upstream portfolio of major capital projects that uniquely positions the company for future growth, executives said at a meeting with financial analysts in New York. In the downstream business, executives highlighted plans to improve returns by aggressively lowering costs, exiting markets and streamlining the organization.
- Chevron U.S.A. Inc., a wholly owned subsidiary of Chevron Corporation (NYSE: CVX), announced that it has commenced operations on the Discoverer Inspiration, an ultra-deepwater drillship, in the U.S. Gulf of Mexico. The vessel has the capability to drill wells in 12,000 feet (3,650 meters) of water to a total depth of 40,000 feet (12,200 meters). The state-of-the-art vessel is the second such vessel commissioned by Chevron in the last six months. Last August, Inspiration's sister ship, Discoverer Clear Leader, began work for Chevron in the ultra-deep water Gulf of Mexico.
- Chevron Corporation (NYSE: CVX) announced that the Perdido deepwater project, located in the U.S. Gulf of Mexico, has started crude oil and natural gas production. Production from the Great White, Silvertip and Tobago fields utilizing the Perdido hub is expected to reach full capacity of 130,000 barrels of oil-equivalent per day after the drilling of additional wells.
• Downstream news:
- Chevron Energy Solutions, a unit of Chevron Corporation (NYSE:CVX), and East Side Union High School District in San Jose, California, announced the start of construction on a 3.7-megawatt solar project that is expected to provide more than $1.5 million in budget relief to the district's general fund in the first year and $7.6 million over five years. It is anticipated that the project will reduce the district's electric utility costs by 30 percent and deliver $36 million in savings over the life of the project.
- Chevron Corporation (NYSE: CVX) announced the start of Project Brightfield, a demonstration of next-generation solar energy technologies in Bakersfield, California. The project, created on the site of a former Chevron refinery, will evaluate seven emerging photovoltaic technologies to help determine the potential application of renewable power at other company-owned facilities. The former refinery site has been repurposed to test the performance of six emerging thin-film technologies and one emerging crystalline-silicon photovoltaic technology, which were provided by independent solar companies.
- The oil giant Chevron has transformed an old refinery site in California into a test bed for seven advanced photovoltaic solar technologies, which the company is evaluating for use at its facilities worldwide. Chevron is unveiling 7,700 solar panels installed on 18 acres in Bakersfield, the capital of California’s oil patch. Called Project Brightfield, the plant will generate 740 kilowatts of electricity to power nearby oil operations. Any excess electricity will be fed to the power grid. “We were looking for the next-generation technology that we believe could well be the low-cost solution — not just in terms of panels but in total cost of ownership,” said Des King, president of Chevron Technology Ventures, the company’s venture capital and technology development arm. “It’s one of most comprehensive side-by-side tests in shear numbers of panels.” Mr. King said Chevron collected data on 180 solar companies, visited 38 of them and narrowed the list to 19 before choosing seven finalists. Six of the companies make thin-film solar panels that deposit or print solar cells on glass or flexible metals. Though less efficient than traditional crystalline photovoltaic technology, thin-film solar panels typically do not use much expensive silicon and can be manufactured at a lower cost. Chevron has installed panels from Abound Solar of Colorado; MiaSolé, a Silicon Valley start-up; Schüco, a German industrial company; Solar Frontier, a subsidiary of Japan’s Showa Shell Solar; Sharp; and Solibro, a division Q-Cells, a big German solar module maker. Project Brightfield’s sole crystalline panel maker is Innovalight, a Silicon Valley start-up that has developed a “silicon ink” that it uses to make photovoltaic modules. “We hope this is a boost to new technology providers,” Mr. King said. For MiaSolé, Brightfield is the start-up’s first commercial project and the company will supply solar panels that will generate about a third of the facility’s electricity. Chevron will test the technologies for three years and decide which might merit use at the company’s facilities, or by Chevron Energy Solutions, which builds solar power plants and installs solar arrays for commercial customers. Chevron announced that it planned to build a one-megawatt concentrating photovoltaic power plant at the tailings site of its molybdenum mine in Questa, N.M. Such photovoltaic panels use mirrors to concentrate the sun on high-efficiency solar cells but have yet to be widely deployed. Concentrix Solar, a German company, will supply the technology. A Silicon Valley start-up, SolFocus, announced the construction of the nation’s first big concentrating photovoltaic power plant in Victorville, Calif. Chevron has also invested in BrightSource Energy, a solar thermal power plant builder that has contracts to supply 2,600 megawatts of electricity to California utilities. Mr. King said Chevron is not just evaluating the efficiency of the solar technologies but the total cost of their installation and operation.
• Business/Finance news:
- Chevron Corporation (NYSE:CVX) announced that Senator Charles (Chuck) T. Hagel and John G. Stumpf have been nominated for election to Chevron's board of directors. Hagel and Stumpf will be part of the slate of board nominees to be considered for election to Chevron's board at the company's annual meeting of stockholders on May 26. If they are elected, the board will expand from 14 to 16 members.
- An international arbitration tribunal has ruled in favor of Chevron in a claim against Ecuador related to past oil operations by Chevron's subsidiary, Texaco Petroleum Company. The tribunal, administered by the Permanent Court of Arbitration in The Hague, found that Ecuador's courts violated international law through their delays in ruling on certain commercial disputes between Texaco Petroleum Company and the Ecuadorian government. The ruling is distinct from arbitral claims Chevron and Texaco Petroleum filed against Ecuador in 2009 in connection with the Lago Agrio litigation. In its decision, the tribunal found that Ecuador had violated the United States-Ecuador Bilateral Investment Treaty by failing to provide effective means of asserting claims and enforcing rights. As a result, the tribunal awarded Chevron and Texaco Petroleum Company approximately US$700 million in principal damages and interest as of December 22, 2006, pending further proceedings to determine applicable taxes, compound interest, and costs.
• Upstream news:
• Downstream news:
• Business/Finance news:
- Chevron Products Company announced a series of "Energy for Learning" grants totaling $1 million to be distributed among 15 South Bay schools, signifying the largest science, technology, engineering, and math (STEM)-related donation ever made by Chevron's El Segundo Refinery in support of local educational programs. As part of the announcement activities, and in recognition of Mathematics Awareness Month, some of the area's top performing students are demonstrating their most recent STEM projects for local educators, civic leaders, business partners and Chevron employees at the Chevron Employee Park.
- Chevron Corporation (NYSE:CVX) reported in its interim update that earnings for the first quarter 2010 are expected to be higher than in the fourth quarter 2009. Upstream earnings are projected to increase, reflecting higher commodity prices, partly offset by lower liquids liftings. Downstream results, inclusive of the former Chemicals business segment, are expected to return to positive earnings in the first quarter, largely on improved refining margins.
- The Board of Directors of Chevron Corporation (NYSE: CVX) declared a quarterly dividend of seventy-two cents ($0.72) per share, payable June 10, 2010, to holders of common stock as shown on the transfer records of the Corporation at the close of business on May 19, 2010. The amount represents a 5.9 percent increase in the company's quarterly dividend.
- Chevron Corporation (NYSE: CVX) reported earnings of $4.55 billion ($2.27 per share - diluted) for the first quarter 2010, compared with $1.84 billion ($0.92 per share – diluted) in the 2009 first quarter. Results in the 2009 period included gains of approximately $400 million ($0.20 per share) from downstream asset sales. Foreign-currency effects reduced earnings in the 2010 quarter by $198 million, compared with a reduction of $54 million a year earlier. Earnings in the first quarter 2010 include charges of $175 million ($0.09 per share) associated with employee reductions in the downstream businesses and corporate staffs.
- Lawyers for the plaintiffs suing Chevron Corp. (NYSE: CVX) submitted fraudulent reports to an Ecuadorian court claiming dangerous contamination was found at Amazon oil well sites, the original technical expert for the plaintiffs revealed in sworn testimony last week. Charles W. Calmbacher, Ph.D, a U.S. biologist and industrial hygienist who was the first expert appointed on behalf of the plaintiffs in the litigation pending against Chevron in Lago Agrio, Ecuador, testified in a court-ordered deposition last week that reports associated with inspections of the Sacha 94 and Shushufindi 48 well sites were submitted in his name without his knowledge or consent. Dr. Calmbacher said he had never concluded the sites posed a risk to human health or the environment and that his opinions were known to the plaintiffs' legal and technical teams in Ecuador. Nevertheless, the plaintiffs' lawyers submitted reports contradictory to Dr. Calmbacher's conclusions, fraudulently using his signature months after he ceased his participation in the case.
• Upstream news:
• Downstream news:
• Business/Finance news:
- Chevron Corporation (NYSE: CVX) invested $144 million in communities around the world, adopted a human rights policy and completed major energy efficiency projects, according to the company's 2009 Corporate Responsibility Report, The Value of Partnership, which was issued. Chevron's eighth annual Corporate Responsibility Report provides descriptions, data and perspectives on community and stakeholder engagement, environmental management, energy efficiency, health and safety, human rights, and renewable energy and biofuels.
- A combination of safe, reliable operations and superior execution helped Chevron Corporation (NYSE: CVX) generate value for stockholders, maintain financial strength and advance a leading queue of projects, attendees were told today at the company's 2010 Annual Meeting of Stockholders. Watson discussed Chevron's strong 2009 financial performance, which produced earnings of $10.48 billion. The company increased the quarterly dividend by 4.6 percent in 2009, marking 22 consecutive years of annual dividend increases. During this period, dividends grew at an average annual rate of 7 percent. Continuing the tradition, Chevron announced another quarterly dividend increase in April 2010. Watson said Chevron led its peers in total stockholder returns in the past three- and five-year periods, besting the S&P 500 by more than 10 percentage points over those spans. In Chevron's 2010 first quarter, net income was up sharply from the same period in 2009, and production increased 5 percent.
- Chevron Corp. (NYSE: CVX) has uncovered new evidence that Ecuadorian court appointee Richard Cabrera, the so-called "independent expert" claiming that Chevron should pay $27 billion in damages, has had ongoing and surreptitious contacts with plaintiffs' representatives and that a substantial portion of Cabrera's court-ordered analysis is based on materials that could only have been provided by the plaintiffs' representatives outside of the court proceeding. Additional new evidence shows that Cabrera allowed his supposedly independent assistants to work directly with the plaintiffs' lawyers. Chevron made a filing in Ecuador informing the court of this new evidence of misconduct.
• Upstream news:
- One of the deepest offshore oil fields in the Gulf of Mexico lies beneath 7,000 feet of water and under more than 20,000 feet of rock and sand. Estimated to hold as much as 100 million barrels of crude, the field was discovered by Chevron in 2001, and production began in 2008. It is less than 20 miles west of the Deepwater Horizon blowout. The name of the field, and the rig anchored above it, is Blind Faith. It’s a curious choice for a high-tech drilling operation pushing the boundaries of modern engineering, perhaps a bit like NASA naming a new shuttle “Dumb Luck.” But there’s an explanation: Blind Faith is in fact the name of a short-lived 1960s psychedelic rock supergroup, fronted by the guitar god Eric Clapton. The investigative reporter and former 60 Minutes correspondent Peter W. Klein uncovered this factoid during a visit to the Blind Faith rig last summer while filming a story for ABC News on deepwater drilling. The segment features video of submersible robots thousands of feet down on the seafloor manipulating drilling equipment. “When I asked the manager of Chevron’s gulf rigs what he would do if there was a leak at his wellhead more than a mile down, he assured me they had robot-controlled devices that could handle any contingency,” Mr. Klein wrote in a recent essay on the National Public Radio Web site. In Congressional testimony this week, Chevron’s chairman and chief executive, John S. Watson, testified that his wells and rigs – presumably including Blind Faith – were far safer than the BP well that continues to gush after 50-plus days of desperate attempts to cap it. “We have multiple systems to prevent a tragedy like the Deepwater Horizon,” Mr. Watson said. “Our drilling policies and procedures are rigorous. We require continuous training. We certify our drilling personnel to ensure they are qualified to manage unusual circumstances. And we verify that contractors have the skills to execute well control.” Mr. Watson joined three other oil company executives in rhetorically throwing BP under the bus during a hearing before the House Energy and Commerce Committee. The leaders of Shell, Exxon Mobil and ConocoPhillips also claimed that their deepwater operations were safe, and that it was negligence by BP – not the inherent risks of drilling in ultra-deep waters, or lax regulation of the industry – that led to the uncontrolled blowout. Representative Henry A. Waxman of California, the Democratic chairman of the committee, was having none of it. “BP failed miserably when confronted with a real leak,” Mr. Waxman said, “and Exxon Mobil and the other companies would do no better.” As for Blind Faith – well, it is perhaps BP, not Chevron, who could find some solace in one of the band’s hits: “Had to Cry Today,” by Steve Winwood. “The feeling’s the same as being outside of the law,” the song laments. “Had to cry today.”
• Downstream news:
- City officials have reported the pipeline has been capped at a massive oil spill in the Salt Lake area. Crews began excavating the ten-inch pipeline to try to determine the cause of the leak. Environmentalists and city officials are trying to stop the oil slick from reaching the Great Salt Lake. City officials and Chevron crews have been working since early in the morning on June 12 to stop a severe oil spill discovered East of Red Butte Canyon. The number of barrels of oil released is estimated at 400 to 500. Crews continue with clean-up efforts at Liberty Park. Officials are warning nearby residents to not assist in oil clean up efforts. Residents are advised to stay away from Red Butte Canyon and Liberty Park so crews can adequately manage the spill. All water access points along Red Butte Creek, Liberty Park and the Jordan River should be avoided by humans and animals at this time. The Salt Lake Valley Health Department said the oil has leaked into the Jordan River in two areas on the Salt Lake City's west side.Officials say drinking water for residents has not been affected and will have no threat for residents surrounding the area. Chevron has a pipeline bringing crude oil in from western Colorado and eastern Utah into the Salt Lake Valley. This pipeline runs down Emigration Canyon and heads west over Beck Street to the company refinery. Chevron said it's launched an investigation into what caused the pipeline leak. The company will not speculate on the cause and fixing the ecological damage could cost the company millions of dollars. They are bringing in clean-up crews from out of state and had more than 60 workers on site cleaning up the oil from the waterways. "We regret the impact this has had on the community. We're working hard to minimize it. We take full responsibility for the situation," said Chevron Rep. Sean Comey. The company asks that anyone with concerns or questions to please call 1-(866)-752-6340. A town hall meeting is scheduled for Monday night at 7:00 p.m. at Clayton Middle School located at 1471 South and 1900 East in Salt Lake City. Mayor Becker and Chevron officials will update the public on the latest conditions and any progress being made in the clean-up effort.
• Business/Finance news:
- The director Joe Berlinger will not have to turn over more than 600 hours of unused footage from his documentary “Crude” to the Chevron oil company, pending his appeal of a subpoena for the footage. A three-judge panel for the United States Court of Appeals for the Second Circuit in New York decided to stay a subpoena order made last month by a lower court, pending its ruling on the appeal. In the documentary, Mr. Berlinger chronicles a group of Ecuadorians who are suing Chevron (which now owns Texaco, the original target of the suit), saying that the company’s oil-field operations polluted their drinking and bathing water. A federal district court sided on May 6 with Chevron, which said Mr. Berlinger’s raw footage could be helpful as it seeks to have the lawsuit dismissed and pursues an international treaty arbitration related to the litigation. But on May 21, the appeals court stayed the district court’s ruling pending Tuesday’s hearing. The panel also granted a request by both sides for an expedited appeal. A date for arguments was not immediately set, but they were expected to take place by mid-July. In a telephone interview, Maura Wogan, a lawyer representing Mr. Berlinger, said that if her client had not been granted the stay, “he would have been forced to turn over this material before the appeal was heard – he would have, in effect, lost his right to an appeal.” Randy M. Mastro, a lawyer representing Chevron, said in a telephone interview, “It’s not unusual when there’s a claim of privilege on appeal for the court to afford itself some period of time to decide the privilege claim.” He added, “We are very gratified that the court is considering this appeal on an extraordinarily expedited basis, and that there will be the opportunity for Chevron to obtain this critical evidence as soon as possible.”
• Upstream news:
- Chevron Corp. (NYSE: CVX) announced a new deepwater natural gas discovery in a Chevron-operated block in the Carnarvon Basin offshore Western Australia, Australia's premier hydrocarbon basin. The Clio-3 discovery well is located in the WA-205-P permit area approximately 90 miles (150 km) northwest of Onslow. Situated in 3,186 feet (971 m) of water and drilled to a depth of 14,137 feet (4,309 m), the well penetrated approximately 260 feet (79 m) of net gas pay. Clio-3 marks the third consecutive discovery on the Clio structure.
- Chevron Corporation (NYSE: CVX) announced a new exploration drilling success in the Carnarvon Basin offshore Western Australia, Australia’s premier hydrocarbon basin. The Sappho-1 exploration well is located in the WA-392-P permit area approximately 87 miles (140 kilometers) northwest of Onslow. The well was drilled to a depth of 15,406 feet (4,696 meters) and encountered approximately 246 feet (75 meters) of net gas pay.
- A plan to build and deploy a rapid response system that will be available to capture and contain oil in the event of a potential future underwater well blowout in the deepwater Gulf of Mexico was announced by Chevron, ConocoPhillips, ExxonMobil and Shell. The new system will be flexible, adaptable and able to begin mobilization within 24 hours and can be used on a wide range of well designs and equipment, oil and natural gas flow rates and weather conditions. The new system will be engineered to be used in deepwater depths up to 10,000 feet and have initial capacity to contain 100,000 barrels per day with potential for expansion. The companies have committed $1 billion to fund the initial costs of the system. Additional operational and maintenance costs for the subsea and modular processing equipment, contracts with existing operating vessels in the Gulf of Mexico and any potential new vessels that may be constructed will increase this cost commitment.
• Downstream news:
- Chevron Corporation (NYSE: CVX) announced that its Australian subsidiaries signed a Heads of Agreement (HOA) with Korea Gas Corporation (KOGAS) for the delivery of liquefied natural gas (LNG) from the Chevron-operated Wheatstone natural gas project in Australia. Under the HOA, KOGAS expects to purchase 1.5 million tons per annum (MTPA) of LNG for up to 20 years from the Wheatstone project participants. Approximately 75 percent of the 1.5 MTPA is expected to be purchased from Chevron, with the remainder from other Wheatstone hub participants.
• Business/Finance news:
- Chevron Corporation (NYSE:CVX) reported in its interim update that earnings for the second quarter 2010 are expected to be higher than in the first quarter. Upstream earnings are projected to be in line with first quarter results. Downstream results, inclusive of the former Chemicals business segment, are expected to be significantly higher than the first quarter. Additionally, earnings are expected to benefit from favorable non-cash foreign currency effects due to the strengthening of the U.S. dollar in the second quarter.
- The Board of Directors of Chevron Corporation (NYSE: CVX) declared a quarterly dividend of seventy-two cents ($0.72) per share, payable September 10, 2010, to holders of common stock as shown on the transfer records of the Corporation at the close of business on August 19, 2010.
- Chevron Corporation (NYSE: CVX) reported earnings of $5.41 billion ($2.70 per share – diluted) for the second quarter 2010, compared with $1.75 billion ($0.87 per share – diluted) in the 2009 second quarter. Foreign currency effects increased earnings in the 2010 quarter by $241 million, compared with a reduction of $453 million a year earlier.
• Upstream news:
- Chevron Corp. (NYSE: CVX) announced a natural gas discovery in the Exmouth Plateau area of the Carnarvon Basin offshore Western Australia. The discovery is located in Australia’s premier hydrocarbon basin, where Chevron is a leading lease holder. The Brederode-1 exploration well is located within the WA-364-P permit area approximately 217 miles (350 km) northwest of Onslow. Situated in 4,550 feet (1,387 m) of water, the well was drilled to a depth of 9,022 feet (2,750 m) and encountered approximately 49 feet (15 m) of net gas pay.
- Chevron Corp. (NYSE: CVX) announced further drilling success in the Carnarvon Basin offshore Western Australia, Australia’s premier hydrocarbon basin. The Acme-1 exploration discovery well is located in the WA-205-P permit area offshore Western Australia approximately 93 miles (150 km) from Onslow. Drilled in 2,880 feet (878 m) of water to a depth of 15,469 feet (4,715 m), the well encountered approximately 896 feet (273 m) of net gas pay.
- I caught up with Chevron’s vice president for global exploration to ask him what impact the BP well disaster and the drilling moratorium in the Gulf of Mexico would have on his company’s plans for future deepwater development. “There is an easy answer,” the Chevron vice president, Bobby Ryan, said without hesitation. “They have not changed.”Chevron, the second-largest American oil company after Exxon Mobil, is one of the largest deepwater explorers in the Gulf of Mexico, and also has major deepwater projects in Europe, Asia and West Africa. The six-month drilling moratorium instituted by the Obama administration following the April 20 explosion of the Deepwater Horizon has suspended work on five Chevron deepwater wells. “Our plans are, the day that the moratorium is lifted, to go right back to the prospects we were drilling at the time work was suspended, as well as the other prospects that are in our queue,” he said. Mr. Ryan conceded that he and other Chevron executives do not know what new regulations will be imposed by the administration and Congress in the aftermath of the BP disaster. “We’d like to believe we will be back on track soon,” he said. A six-month delay, assuming that the moratorium is not prolonged, must be put in perspective, he said. “It’s a long-term business,” he noted. The operations involved in completing a deepwater well project can take 15 years between initial evaluation, drilling and initial production. “It’s a fair assumption people could make that costs will go up because permits will take longer,” he acknowledged. But work on next year’s business plan is continuing normally. “I can tell you with confidence that basically nothing has changed,” he added. “We’re committed to deepwater.”
• Downstream news:
• Business/Finance news:
- Chevron Corporation has filed a petition before the Provincial Court of Sucumbíos in Lago Agrio, Ecuador seeking dismissal of the lawsuit pending against it there. In support of its petition, Chevron has submitted to the court video outtakes from the movie Crude that show the plaintiffs' counsel, consultants, and associates meeting with the court's supposedly neutral "Global Expert," Richard Stalin Cabrera Vega, to plan and create the $27.3 billion damages report that Cabrera later would present to the court as his own. Chevron believes that the video evidence proves that plaintiffs' counsel and consultants colluded with Cabrera to present a fraudulent report and then to present a fraudulent "peer review" of their own work. Chevron also believes that the video proves that plaintiffs' and Cabrera's denials of their collusion in filings and testimony before the Ecuadorian court, before various United States courts and other institutions, and before the worldwide press have been false. Chevron's petition argues that the case must be dismissed as a sanction for the abusive misconduct by plaintiffs and their attorneys, and because the fraudulent "Global Expert" report submitted under Cabrera's name is the only "evidence" supporting plaintiffs' case.
• Upstream news:
- Chevron Corporation (NYSE: CVX) announced that its China subsidiary has received final approval to acquire operating interests in three exploration blocks in the South China Sea’s Pearl River Mouth Basin. Chevron has acquired a 100 percent interest in blocks 53-30 and 64-18, and a 59.18 percent interest in block 42-05, from Devon subsidiary Devon Energy China, Ltd. The blocks cover an exploratory acreage of approximately 8,100 square miles (21,000 square km). Chevron will be operator during the exploration phase under the amendment agreements to the production sharing contract with China National Offshore Oil Corporation (CNOOC).
- Chevron Corporation (NYSE:CVX) announced that it has been granted approval by the Liberian government to acquire a 70 percent interest and operatorship in three deepwater concessions in Liberia. The deepwater blocks, LB-11, LB-12 and LB-14 are located between 12 to 110 miles (20 to 180 km) south of the capital of Monrovia and cover a combined area of 3,700 square miles (9,600 square km). Under the agreement, Chevron’s Liberian subsidiary will conduct a three-year exploratory program that is expected to begin in the fourth quarter of 2010.
- Chevron Corporation (NYSE:CVX) announced that its Turkish subsidiary has signed a Joint Operation Agreement with Turkey’s state oil company for an exploration license in the Black Sea. Chevron will acquire a 50 percent interest in a western portion of License 3921, an 8,700 square mile (22,505 square km) block located 220 miles (350 km) northwest of the capital city of Ankara. Türkiye Petrolleri Anonim Ortaklýðý (TPAO) holds the remaining 50 percent interest in the license and will be the operator of the initial exploratory well currently being drilled. If the initial well is successful, 3D seismic will be acquired and an additional exploratory well will be drilled by TPAO during 2012.
• Downstream news:
• Business/Finance news:
- Chevron Corp. (NYSE: CVX) submitted expert testimony from leading scientists to the Provincial Court of Sucumbíos in Lago Agrio, Ecuador demonstrating that there is no evidentiary basis for the lawsuit against the company. Chevron also has renewed its motion for dismissal of the case because there is no evidence of liability and because there is overwhelming proof of fraud on the part of the plaintiffs' lawyers.
- The footage showed an American lawyer, Steven Donziger, at meetings and during mealtimes, discussing his class-action suit against Chevron and ruminating about trial strategy and the workings of the Ecuadorian justice system. The scenes were outtakes from the documentary “Crude,” directed by Joe Berlinger, which tells the story of the suit in which Mr. Donziger represents Ecuadorians who say that Texaco (now owned by Chevron) polluted their water. The rarely seen footage was screened in a federal courtroom in Manhattan as lawyers debated whether a subpoena against Mr. Donziger should be enforced. In July a federal appeals court ruled that Mr. Berlinger must turn over to Chevron a portion of the unused footage. Soon afterward, the company sought to depose Mr. Donziger and examine materials related to his actions in Ecuador. Lawyers for Mr. Donziger wrote that the subpoena was overly broad, sought privileged information and should be quashed. In reply, Chevron’s lawyers asserted that Mr. Donziger could not be shielded by privilege because he had resorted to unscrupulous means while advancing his case in Ecuador. In court Randy Mastro, a lawyer for Chevron, screened parts of the footage that he said bolstered that argument. In one segment Mr. Donziger was portrayed saying he wanted to take over a court with a “massive protest.” In another, while discussing evidence of oil contamination, he said: “This is Ecuador, OK? We can say whatever we want.” In yet another scene he was shown discussing the idea that a judge who ruled in favor of Chevron could be assassinated. In a statement sent to reporters after the hearing Mr. Donziger said, “Some of my remarks taken out of context from discarded outtakes from the film ‘Crude’ may be viewed as intemperate,” and added that they were motivated by what he saw as evidence of Chevron’s wrongdoing. Judge Lewis I. Kaplan said that he could rule as early as Friday and at the end of the hearing he offered what could be interpreted as a signal about which way his decision might lean, saying, “Whether I modify the subpoena or enforce the whole thing, you’d be well advised to start getting the material together.”
- A federal judge in Manhattan ruled that a documentary filmmaker must submit to depositions in a case involving Chevron, writing in a strongly worded opinion that the oil company’s original request to see the filmmaker’s raw documentary footage was “no fishing expedition.” In July a federal appeals court ruled that the filmmaker, Joe Berlinger, must turn over a portion of unused footage from his documentary “Crude” to Chevron, which said that the footage may be useful in its fight against a lawsuit in Ecuador. That decision represented a narrowing of a ruling issued in May by Judge Lewis A. Kaplan of United States District Court, who said that Mr. Berlinger would have to turn over all of his raw footage, totaling more than 600 hours, from his film, which chronicles a group of Ecuadorians who say that an oil field established by Texaco (now owned by Chevron) polluted their water. Chevron has long argued that Mr. Berlinger’s raw footage shows scenes of misconduct by the lawyers representing the Ecuadorian plantiffs. Judge Kaplan came down on Chevron’s side in his ruling, writing that “the outtakes contain substantial evidence of misconduct in and relating to the Ecuadorian litigation.” He cited a ruling by another judge who has seen the outtakes and described a scene in which Steven Donziger, an American lawyer for the Ecuadorian plaintiffs, “brags of his ex parte contacts with the Ecuadorian judge, confessing that he would never be allowed to do such things in the United States.” Judge Kaplan added that Mr. Berlinger and his lawyers “made representations about the contents of the outtakes that proved inaccurate,” noting that, contrary to their argument “that there was nothing relevant in the outtakes,” Mr. Berlinger has since produced more than 85 percent of his raw footage under the appeals court’s ruling. Update: A spokeswoman for the Ecuadorian plaintiffs said in a statement, “Chevron met with the judge and other court experts ex parte, as did the plaintiffs. The Ecuadorian court hearing the lawsuit allowed these meetings, and Chevron’s behavior was the same as the plaintiffs’ in this regard. To criticize the practice is the height of hypocrisy.” A lawyer for Mr. Berlinger did not immediately reply to a request for comment.
• Upstream news:
- Britain gave Chevron the go-ahead for a controversial deepwater drilling project in the North Sea, a sign that the recent accident in the Gulf of Mexico has not shattered that government’s support for such projects. Chevron gained permission to start drilling an exploratory well as part of its Lagavulin project in the waters north of the Shetland Islands, Britain’s Department of Energy and Climate Change said in a statement. It is the first time it has granted permission granted for deepwater drilling since the explosion aboard BP’s Deepwater Horizon rig in the Gulf of Mexico in April. The decision was criticized by Greenpeace, whose activists had prevented the drill ship from advancing by swimming in front of it. The group called the decision “irresponsible” and said it was preparing to take legal action. The government said the decision did not contradict its pledge to rely more on renewable sources of energy but said that the transition would take time. “The fact is that in the meantime we will be dependent on oil and gas,” the department said. It was “a choice between producing oil and gas here in U.K. waters, where we have one of the most robust safety and regulatory regimes in the world, with all the economic benefits that will bring, or paying to import oil and gas from elsewhere,” the statement said. “All lessons learned from Macondo have been applied to this well and steps have been taken to prevent the specific failures on Macondo,” it added, referring to the well where the April 20 accident occurred in the gulf, killing 11 workers on the rig. The resulting oil spill, the largest in United States history, was not halted until mid-July. Chevron is exploring in waters about 1,640 feet deep, The Associated Press reported; the Macondo well was about a mile deep. A moratorium imposed on deepwater drilling in the United States after the April explosion remains in effect. It is set to expire on Nov. 30, but the Obama administration has signaled that it could be lifted earlier if safety concerns are met.
- Chevron Corporation (NYSE:CVX) announced it has sanctioned development of the Jack/St. Malo project, its first operated project located in the Lower Tertiary trend in the deepwater U.S. Gulf of Mexico. The Jack and St. Malo fields are located within 25 miles (40 km) of each other approximately 280 miles (450 km) south of New Orleans, Louisiana, in water depths of 7,000 feet (2,100 m). The initial development of the project will require an investment of approximately $7.5 billion. It will be comprised of three subsea centers tied back to a hub production facility with a capacity of 170,000 barrels of oil and 42.5 million cubic feet of natural gas per day. Startup is anticipated in 2014.
- Just nine days after the Obama Administration lifted the deepwater drilling moratorium, Chevron announced that it was going forward with a $7.5 billion project to develop two giant deepwater fields in the gulf. The Jack and St. Malo fields hold in excess of 500 million barrels of recoverable hydrocarbons, the company said. That’s roughly equal to the world’s oil consumption in about five days — nothing to sneeze at. I caught up with Bobby Ryan, Chevron’s vice president for global exploration, to get his take on the announcement so soon after the lifting of the moratorium, which came in the aftermath of the blowout on a BP well that killed 11 rig workers and flooded the gulf with millions of barrel of oil. He said that despite the accident, the gulf continues to be one of the crucial areas of focus for Chevron, the second largest American oil company after Exxon. “We are going to continue to explore,” he said. As for the timing of the announcement, he suggested that it was in the making for a long time – that all the planning, exploration and geological calculations literally took years before the company decided to take the big financial plunge. And he suggested that more big projects in the gulf were envisaged by Chevron and other companies. He said he expected delays going forward, but nothing that Chevron and the industry couldn’t manage. “The moratorium is lifted, but the permitting process is yet to be well defined and we are expecting some delays in actually getting the permits,” he said. “But these projects are so long-term that I would imagine a delay in the permitting process would be something of a blip.” “In the end, the United States needs the oil and gas and other countries need the oil and gas, and some of the best places to explore are deepwater environments,” he said. Mr. Ryan was ready to reflect on the BP tragedy and what it would be mean for the oil industry. “I’d like to believe that the regulators, the companies, the operators, everyone has learned from it,” he said.
• Downstream news:
- Chevron Corp. (NYSE: CVX) announced that a wholly-owned subsidiary, Chevron Pipe Line Co., has sold its 23.44 percent ownership interest in the Colonial Pipeline Co. to an affiliate of Kohlberg Kravis Roberts & Co. L.P. The sale closed on October 8, 2010. Chevron said in March 2010 that it was pursuing marketing and possible sale of its interest in Colonial consistent with the company's ongoing efforts to align its portfolio of assets with its strategies. Atlanta-based Colonial owns and operates a 5,500 mile (8,850 km) petroleum products pipeline system in the United States that transports products from supply centers on the Gulf Coast to customers located along the Eastern Seaboard. On average, Colonial delivers 100 million gallons (380 million liters) of gasoline, kerosene, diesel fuel, home heating oil and aviation fuels per day. Other shareholders include Koch (28.09 percent), ConocoPhillips (16.55 percent), Shell (16.12 percent) and IFM (15.80 percent).
• Business/Finance news:
- Chevron Corporation (NYSE:CVX) announced that it would begin purchases of its common stock in the fourth quarter 2010 under an ongoing share repurchase program approved by the Board of Directors and communicated previously. Chief Financial Officer Pat Yarrington commented, "Our sole focus in deploying cash is to create value for our shareholders. We focus on sustaining and growing the dividend, funding our leading project queue, maintaining a strong balance sheet and returning cash to shareholders through share repurchases. Initiating repurchases at this time is evidence of our ongoing capital discipline and strong cash flows, including from newly developed oil and gas projects. We are targeting a repurchase rate of $500 million to $1 billion a quarter."
- Chevron Corporation (NYSE:CVX) announced that it will commit an additional $25 million to The Global Fund to Fight AIDS, Tuberculosis and Malaria, raising its 6-year investment in the organization to $55 million. Chevron is now the single largest private sector donor to the organization. The Global Fund to Fight AIDS, Tuberculosis and Malaria is one of the largest funders of programs to fight global epidemics.
- Chevron Corporation (NYSE:CVX) reported in its interim update that earnings for the third quarter 2010 are expected to be lower than in the second quarter. Non-cash foreign currency effects due to the weakening of the U.S. dollar are expected to reduce earnings approximately $400 million for the full quarter, primarily in the International Upstream business segment. Higher expenses and lower crude oil realizations are expected to further reduce Upstream earnings.
- Chevron is scrambling to deal with an elaborate lampoon of a major advertising campaign that the company introduced. An environmental organization, the Rainforest Action Network, sent an e-mail claiming credit for the spoof, along with Amazon Watch and the Yes Men. Chevron announced the campaign to reporters in e-mails, which were sent after the publication of an article about the ads in The Wall Street Journal. There was also a news release about the campaign posted to a section of the Chevron Web site. The campaign, by McGarryBowen in New York, carries the theme “We agree.” The ads seek to address critics of energy companies by affirming statements like “Oil companies should support the communities they’re part of” and “Oil companies should put their profits to good use.” A section of the Chevron Web site is also devoted to the campaign. However, hours before the e-mails were sent, e-mails intended to resemble Chevron corporate missives also went out. They cited a different Web address, chevron-weagree.com, and included a link to what seemed to be an authentic news release on the official Chevron site. The spoof news release carries the headline “Radical Chevron Ad Campaign Highlights Victims,” compared with the actual Chevron news release headline, “Chevron Launches New Global Advertising Campaign: ‘We Agree.’” The spoof news release echoed language from the actual news release and included concocted quotations from actual Chevron executives. The main difference between the lampoon and the real one was that the fake release described the ads as addressing environmental issues in which Chevron is embroiled, including a dispute in Ecuador over oil pollution; the real ads do not directly address those matters. At least one news outlet, the Web site of Fast Company magazine, was fooled by the prank. The fake e-mail was followed by another, purporting to reproduce a news release that Chevron supposedly posted on the Business Wire service. It described how “a group of environmentalists cyber-posing as Chevron officials illegally spoofed Chevron’s just-launched ‘We Agree’ advertising campaign, confusing reporters.” The second fake release, like the first, also attributed made-up quotes to real Chevron executives. Morgan Crinklaw, a spokesman for Chevron in San Ramon, Calif., said the company was “taking down the Web sites that purport to be Chevron’s.”Mr. Crinklaw also forwarded by e-mail a statement from Chevron that called the lampoon “rhetoric and stunts” and condemned the “fake press release” and “counterfeit Web site, which are not affiliated with Chevron.” The e-mail asked reporters to contact the company “to ensure the accuracy of the information they have received” about the campaign. Asked who might have been behind the spoof, Mr. Crinklaw replied: “I don’t want to speculate. I don’t know the answer.” The e-mail from the Rainforest Action Network described the hoax as a “satirical counter-campaign.” “When it comes to oil spills, climate change and human rights abuses, we need real action from Chevron,” said the e-mail. “Instead, the oil giant has prioritized a high-priced glossy advertising campaign that attempts to trick the American people into believing it is different than BP.” Fast Company, in updating the article on its Web site, said that the pranksters known as the Yes Men were behind the hoax. The Yes Men are known for mocking big business and what they perceive to be corporate misdeeds. Some environmental organizations welcomed the lampoon, whatever its provenance. “The spoof is a direct consequence of Chevron’s trying to fool people into thinking it is an environmentally conscious when the company is responsible for the extensive contamination found in Ecuador’s rain forest and in other places as well,” Karen Hinton, a spokeswoman for the Ecuadorian plaintiffs suing Chevron, said in an e-mail. Earlier, before the spoof became widely known, Ms. Hinton sent an e-mail in which the plaintiffs criticized the actual Chevron campaign as “greenwashing.”
- Two of the four major championship winners from the summer – Graeme McDowell and Martin Kaymer – plus a trio of other major winners and a near full-house of 13 Ryder Cup participants will make up one of the most impressive, elite fields of the year when they compete at the Chevron World Challenge, Dec. 1-5, at Sherwood Country Club in Thousand Oaks, Calif.
- Chevron Corporation (NYSE: CVX) launched a new global advertising campaign titled "We Agree." The campaign highlights the common ground Chevron shares with people around the world on key energy issues. It also describes the actions the company takes in producing energy responsibly and in supporting the communities where it operates.
- The Board of Directors of Chevron Corporation (NYSE: CVX) declared a quarterly dividend of seventy-two cents ($0.72) per share, payable December 10, 2010, to holders of common stock as shown on the transfer records of the Corporation at the close of business on November 18, 2010.
- Chevron Corporation (NYSE: CVX) reported earnings of $3.77 billion ($1.87 per share – diluted) for the third quarter 2010, compared with $3.83 billion ($1.92 per share – diluted) in the 2009 third quarter. Results in the 2009 period included gains of approximately $400 million ($0.20 per share) from upstream asset sales and discrete tax items. Foreign currency effects decreased earnings in the 2010 quarter by $367 million, compared with a decrease of $170 million a year earlier.
• Upstream news:
- Chevron Corporation (NYSE: CVX) and Atlas Energy, Inc. (NASDAQ: ATLS) announced that Chevron would acquire Atlas Energy for cash of $3.2 billion and assumed pro forma net debt of approximately $1.1 billion. The acquisition will provide Chevron with an attractive natural gas resource position primarily located in southwestern Pennsylvania's Marcellus Shale. The acquisition is subject to certain Atlas Energy restructuring transactions, approval by Atlas Energy shareholders and regulatory clearance.
- Chevron announced that it would acquire Atlas Energy for $4.3 billion, including the assumption of debt, in the most recent deal by an energy company to expand in the natural gas sector. The deal gives Chevron a big foothold in the Marcellus Shale in southwestern Pennsylvania, which has been the focus of several deals this year. Chevron is offering Atlas shareholders $38.25 a share in cash and a portion of more than 41 million units of Atlas Pipeline Holdings, with a value of $5.09 per Atlas Energy share. The offer totals $43.34 a share, a 37 percent premium to Atlas Energy’s closing share price on Monday — among the richer premiums being offered of late. Chevron will also take on $1.1 billion in debt. The deal by Chevron, the second-largest energy company in the Unites States, represents a big vote of confidence in natural gas, whose prices have sagged to around $4 per million British thermal units. Chevron’s larger rival, Exxon Mobil, made a similar bet in December with its $31 billion acquisition of XTO Energy. For Chevron, the allure of Atlas Energy lies in its 486,000 net acres of the Marcellus Shale, which has been a big natural gas play in the last year. Chevron will also get a 49 percent interest in Laurel Mountain Midstream, a joint venture with the Williams Companies that owns natural-gas gathering lines serving the Marcellus Shale. Atlas agreed in April to form a $1.7 billion joint venture with Reliance Industries of India in the Marcellus Shale, with Reliance paying $340 million in cash and another $1.4 billion in a drilling carry in return for a 40 percent stake in about 300,000 net acres of the shale holdings. Chevron will now take Atlas’s stake in that deal.
• Downstream news:
- Chevron Corporation (NYSE: CVX) announced that it has agreed to sell its fuels marketing and aviation businesses in Antigua, Barbados, Grenada, Dominica, St. Lucia, St Vincent, Guyana, St. Kitts, French Guiana, Martinique, Guadeloupe, Trinidad, Nicaragua, Costa Rica and Belize to Vitogaz, S.A., a wholly-owned subsidiary of RUBIS, an international downstream petroleum company based in France. The transactions are expected to close in full by the third quarter 2011 following receipt of required local regulatory and government approvals. Under the terms of the agreement, RUBIS will acquire a network of 174 service stations operating under the Texaco brand, an equity interest in an associated refinery operation, proprietary and joint-venture terminals and aviation facilities, and Chevron's commercial and industrial fuels business.
• Business/Finance news:
• Upstream news:
- Chevron Corporation (NYSE: CVX) announced a $26.0 billion capital and exploratory spending program for 2011. Included in the 2011 program are $2.0 billion of expenditures by affiliates, which do not require cash outlays by Chevron. Acquisition costs associated with the recently announced purchase of Atlas Energy, Inc. are not included.
- Chevron Corp. said that it would increase spending on exploration to drive production growth in 2011, but that it would devote fewer resources to the part of its business that makes, transports and sells gasoline, diesel and other products. Total capital spending for the San Ramon, Calif.-based company next year will be $26 billion, about 20% more than for this year, Chevron said. The increase will be going "upstream," or into exploration and production of oil and natural gas. More than $17 billion of that amount will be spent overseas, the company said.
- Chevron Corporation (NYSE:CVX) announced it has sanctioned development of its $4 billion Big Foot project in the deepwater U.S. Gulf of Mexico. Big Foot will be Chevron's sixth operated facility in the deepwater Gulf of Mexico and located approximately 225 miles (360 km) south of New Orleans, Louisiana, in water depths of 5,200 feet (1,600 m). The development will utilize a dry tree Extended Tension Leg Platform with an on-board drilling rig and have production capacity of 75,000 barrels of oil and 25 million cubic feet of natural gas per day. First oil is anticipated in 2014.
- Chevron Corporation (NYSE: CVX) announced the award of major front-end engineering and design (FEED) contracts for the Gendalo-Gehem natural gas development in East Kalimantan, Indonesia. The Chevron-operated Gendalo-Gehem project is located in the Makassar Strait offshore East Kalimantan in water depths of approximately 6,000 feet. The project will include two separate hub developments, each with its own floating production unit (FPU), subsea drill centers, export gas and condensate pipelines and an onshore receiving facility. Gas from the project will be used both domestically and also converted to liquefied natural gas (LNG) at the Bontang LNG facility in Indonesia for export. Maximum daily production from the project is expected to be 1.1 billion cubic feet of natural gas and 31,000 barrels of condensate. Chevron's Indonesia subsidiary awarded the contract for the FPUs to PT Technip Indonesia; the contract for the subsea and flowline system to PT Worley Parsons Indonesia; the contract for the export pipelines to PT Worley Parsons Indonesia; and the contract for the onshore receiving facility to PT. Singgar Mulia.
• Downstream news:
- Chevron Corporation (NYSE:CVX) announced that the shareholders and governing bodies of the Caspian Pipeline Consortium (CPC) have unanimously approved the $5.4 billion expansion of the Caspian pipeline. The capacity of the 900-mile (1500 km) pipeline, which carries crude oil from Western Kazakhstan to a dedicated terminal in the Black Sea, will increase to 1.4 million barrels per day from its current capacity of 730,000 barrels per day. The expansion of the CPC pipeline is a critical step forward to enabling the Tengiz expansion, one of the world's largest oil fields with estimated recoverable reserves of 6 billion to 9 billion barrels. CPC will carry Tengiz crude oil and also transport oil from other Kazakh and Russian fields.
- It's not quite the Gulf Coast, but Salt Lake City has developed a persistent problem with oil spills. The federal Department of Transportation ordered Chevron to temporarily close a pipeline running through the city after the second spill there in six months. The first incident happened in June while the BP spill was gushing thousands of gallons of crude into the Gulf of Mexico. The Salt Lake City pipeline, which carries oil from a western Colorado terminal to a Utah refinery, leaked, sending 800 gallons into the Jordan River. That river runs through the city and empties into the Great Salt Lake, a major bird refuge. Then, on the evening of Dec. 1, the pipeline leaked again as temperatures plunged below freezing and a valve cracked. This time, 500 gallons of oil spilled toward a local creek, though only trace amounts have been found in the water. A Chevron spokesman said the leaks were "highly unusual" and promised a full examination of the latest one. The order from the Department of Transportation requires the oil company to submit a detailed plan before it can restart the pipeline. In the meantime, some of the oil is being trucked to the Salt Lake City-area refinery. Lisa Harrison-Smith, a spokeswoman for Salt Lake City Mayor Ralph Becker, noted that the pipeline runs over the water table that supplies more than 1 million people in the metro area. "How in the world," she asked, "does something like this happen six months after the original spill?" In a statement, Chevron formally apologized for the leaks. "We pride ourselves on being a good corporate neighbor and will work to regain the trust of the Salt Lake community," the company said.
- Amberjack Pipeline Company LLC, a joint venture between Chevron Pipe Line Company and Shell Pipeline Company LP, announced approval to install a 136-mile (219 km), 24-inch (61 cm) crude oil pipeline from the Jack and St. Malo fields in the deepwater U.S. Gulf of Mexico to a Shell-owned and operated platform in Green Canyon Block 19 (GC19). The pipeline will originate approximately 280 miles (450 km) south of New Orleans, Louisiana, in 7,000 feet (2.16 km) of water and terminate at GC19. From GC19, Jack/St. Malo owners will have a variety of pipeline options for moving crude oil to most major trading hubs and refineries in the Gulf Coast region.
- State officials granted a 30-year lease to Chevron Corp. to continue operating its oil tanker terminal off the El Segundo coastline despite vigorous opposition from environmental groups concerned about the risk of an oil spill. The 2-1 vote by the California State Lands Commission will result in the oil company paying a base rent of $1.3 million a year to lease 221 acres of state-controlled tidelands for the terminal through 2040. For nearly a century, oil tankers have docked about 1 1/2 miles off the shore of El Segundo to pump crude through underwater pipelines to the onshore refinery, one of the largest on the West Coast. Environmental groups wanted the state to cut the lease back to no more than 10 years and require Chevron to reroute some of the tanker traffic to the Port of Los Angeles to lower the risk of a significant spill in Santa Monica Bay. Local firefighters also raised concerns about their ability to respond to disaster at the terminal. El Segundo Fire Capt. Chris Thomason, president of the El Segundo Firefighters Assn., told the commission the fire control plan for the marine terminal is "woefully inadequate," and said the department has no boat to get there in case of a fire or explosion. Chevron officials said they maintain their own disaster response crews and that the proposal included exhaustive safeguards against fires, oil spills and threats to the environment. A long-term lease, they argued, is key to the business model of the refinery, a major supplier of fuel to the region that processes about 275,000 barrels of crude a day into gasoline, diesel and jet fuel. In recent decades, there have have been periodic spills that have usually involved just a few gallons of oil, but in 1980, an oil tanker's hull fractured, spilling 105,000 gallons near the offshore facility. In 1991, a tanker trying to berth at the terminal ripped open an underwater pipeline, spilling about 21,000 gallons of a diesel-like oil mixture that washed up on Malibu beaches. Chevron paid a $500,000 fine for that incident. Lt. Gov. Abel Maldonado and a representative for state Director of Finance Ana J. Matosantos voted for the lease. A representative for state Controller John Chiang voted no.
• Business/Finance news:
- Chevron Corporation (NYSE: CVX) announced that C.N. "Sandy" Macfarlane has been appointed general tax counsel and an officer of the corporation. In this position, Macfarlane will direct Chevron's tax activities. He succeeds Thomas R. Schuttish who has retired after 30 years with the company.
- As the Chevron World Challenge professional golf tournament kicks off, Chevron announced the start of a new program that further benefits the tournament's education-focused nonprofit partners.To encourage friendly competition, as well as to increase the benefit to the tournament's nonprofit sponsors, Chevron will donate $15,000 to the tournament's nonprofit partners for every eagle scored during tournament play.
- Chevron Corporation (NYSE: CVX) welcomed the announcement made by the Obama and Lee Administrations on their joint commitment to lay the foundation for completion of the Korea Free Trade Agreement (FTA) through the resolution of outstanding issues. Upon ratification, the Korea FTA will advance the economic agendas of both countries, create jobs and spur economic growth.
- The operators of a molybdenum mine in northern New Mexico say there were no surprises in a U.S. Environmental Protection Agency announcement of a $500 million cleanup plan for the Molycorp Superfund site. The EPA announced its cleanup plan, called a record of decision. Margaret Lejuste, a spokeswoman for Chevron Mining Inc., which owns the Superfund site, said Wednesday the plan was the next step in a process that's been going on for a decade.