Prospective Technology Developments Up to 2050 Bharat Srinivasan Managing Director, Technology Marketing 9th Arab Energy Conference Doha, Qatar May 9 –

Prospective Technology Developments Up to 2050

Bharat Srinivasan

Managing Director, Technology Marketing

9th Arab Energy Conference

Doha, Qatar

May 9 – 12, 2010

© 2009 Chevron Corporation 2

Agenda

Exploration &Production

• Exploration & Exploration Well Success

• EOR & Impacts on Recoverable Reserves

• Non-conventional Oil Production

Renewables Strategy

Refining and Clean Fuels

Developments Driven by Innovation, Leveraged

Strengths and Collaborative Partnerships


Chevron Profile

60,000 employees

11.6 billion BOE net proved oil and gas reserves

2.7 million BOE daily net production

2.2 million BPD refining capacity

15 fuels/lubes refineries + 2 upgraders

3 retail brands

25,800 retail outlets


Exploration and Production


Exploration & Exploration Well Success

EOR & Impacts on Recoverable Reserves

Non-conventional Oil Production


Chevron in the Arab World

Photographed in the Winter of 1937, Dammam No. 1 (right) and Dammam No. 7 (background) appeared as

the only foreign bodies in an isolated desert landscape. By the following year, the discovery at Dammam

No. 7 would establish Saudi Arabia’s potential as an oil-producing giant.


A Strong Worldwide Portfolio

11.6 BBOEProved Reserves

2.7 MMBOEDNet Production Capacity

Asia-Pacific

700 MBOED

Africa &Latin America

600 MBOED

North America

750 MBOED

Europe, Eurasia & Middle East

650 MBOED

Areas of Operation


% Average Exploration Success Rate

Consistent Exploration Success2002 - 2008

Year-End Mean Resource Estimates

2004

2003

2002

2005

2006

2007

2008 Key Resource Additions

Cumulative Resources Added From Exploration8.5 45BBOE

Resource Adds


Technology: Key to Exploration Success

3D seismic/4D Horizontal, multi-lateral wells Completions Subsalt wells Supercomputers Visualization Geostatistics in reservoir

models Record depth - drilling Record depth - production








Future Technologies Will Focus on Recovering More from Existing Fields

Improved reservoir management practices

Reliability and uptime

De-bottlenecking operations

Optimization and automation

Capital efficiency and drilling costs

Energy efficiency


Technology Drives EOR PerformanceThermal Recovery – Most Successfully Applied EOR Method

Steamflood – Increases reserves by a factor of 2-10 times compared to primary heavy oil recovery

Mechanism Heavy Oil Recovery

Primary 5 - 15%

Steam Flood 50 - 80%

Post-SteamPre-Steam

OilSaturationAverages

55%

OilSaturationAverages

8%

Typical oil saturated core in Duri Field, Indonesia

Worldwide

Chemical1%

N2 1%

CO2

12%HC Misc19%

Thermal67%


Collaboration & Innovation Drive PerformanceApplying Steamflood Experience to New Opportunities

Industry/Institution Collaboration INTERSECT simulation capabilities

for HO reservoirs i-field – collaborative, visual

environment to optimize and transform production performance

University of Texas –advancing the science of EOR

IOC Collaboration PNZ Carbonate Steamflood

Development – Kingdom of Saudi Arabia

Petropiar (Hamaca) – Petroleos de Venezuela

Duri – Indonesia

Reservoir and heat management are critical

Efficient operating practices lead to high recoveries

Develop and transfer critical Organizational Capabilities

Advanced technology, processes and best practices


Exploration & Production






Long-Term Outlook Shows Growth in Unconventional Resources

Unconventional Resources

XHO, GTL, CTL and “other” resources such as Biomass, Hydrates, etc. alternate hydrocarbon resources will become increasingly important

Overall Oil Supply (MMBD)

NGLs, Condensate, etc.

North America, Latin America, Asia-Pacific, and Europe

Middle East, West Africa, and FSU

20300 -

150 -

2005

100 -

50 -

Hydrocarbon Demand – Grows from 85 MM BOED to 125 MM BOED over the next 25 years

Total Oil Production Plateau – At approximately 100 MM BOED the demand gap is filled by Unconventional Sources

Heavy Oil

Gas to Liquids

Bio-Fuels

Shale Oil

0 -

17 -

2005 2010 2015 2020 2025 2030

Unconventional Liquids (MMBPD)

Gap - Unconventionals

Coal to Liquids


Global Heavy Oil Resources

ChinaChinaMexicoMexico

ColombiaColombia

UKUK

IranIran

IndonesiaIndonesia

BrazilBrazil AngolaAngola

ArgentinaArgentina

USALower 40USALower 40

VenezuelaVenezuela

TrinidadTrinidad IndiaIndia

CanadaCanada

1 Billion

Barrels in Place

AlaskaAlaska

EcuadorEcuadorPeruPeru

MadagascarMadagascar

NigeriaNigeria OmanOmanSaudi ArabiaSaudi Arabia

AustraliaAustralia

RussiaRussia

KuwaitKuwaitEgyptEgyptJordanJordan

E. EuropeE. Europe

ItalyItaly

NetherlandsNetherlands

TurkeyTurkey

10 Billion

100 Billion

> 1 Trillion

Heavy / Extra HeavyOil-in-Place

HEAVY 15%


CONVENTIONAL 91%

CONVENTIONAL 30%

9%UNCONVENTIONAL

Heavy / Extra HeavyOil Production

EXTRA HEAVY / BITUMEN 55%


Chevron’s Development of Heavy Oil Reserves

ChinaChina

AlbertaAlberta

CaliforniaCalifornia

VenezuelaVenezuela

North SeaNorth Sea

Arabian GulfArabian Gulf

IndonesiaIndonesiaAngolaAngola

ChadChad

BrazilBrazil

San Joaquin ValleySan Joaquin Valley

HamacaHamaca

Partitioned Neutral ZonePartitioned Neutral Zone

DuriDuri

CanadaCanada

MiningOffshore PrimaryThermal

BoscanBoscan

Saudi Arabia

PNZWafra

SouthUmm Gudair

South FuwarisHumma

• ~ 500,000 BOPD (net) = largest amongst International Oil Companies account for almost half of the world’s thermal heavy oil production


Renewables Energy Strategy


Demand is Growing, All Sources will be Needed

Coal Oil Gas Nuclear Hydro Biomass & Waste Other Renewables

26%

34%

21%

6%

2%

10% 1%


201012,842 Million Tons of Oil Equivalent

240 Mmboe/d

26%

32%

23%

5%

2%

10%2%


203017,095 Million Tons of Oil Equivalent

320 Mmboe/d

Refs: IEA World Energy Outlook 2006

6%

2%

1%

26%

34%

21%

10%


Leveraging Our Assets

Chevron pursues renewable energy

technologies that

Are similar to our core business

Can be integrated into our

existing asset base

Enable our core business

Can give us a competitive

advantage


Areas of Focus

Geothermal

Advanced

Biofuels

Emerging

Energy

Energy

Efficiency


Chevron Technology VenturesBiofuels Business Unit

Chevron Technology Ventures manages Chevron’s advanced biofuels research portfolio and the company’s interest in Catchlight Energy

External Research Collaborations

Universities Government laboratories Industrial partners NGOs

Internal R&D

Feedstock supply and optimization Conversion technologies Fuel and combustion technology


Catchlight Energy

Chevron’s 50/50 joint venture with Weyerhaeuser to research, develop and commercialize the conversion of forest-based biomass into biofuels

Weyerhaeuser Catchlight Energy Chevron

Feedstocksat scale

High-quality fuels

Conversiontechnology


Going Forward

• Maintain leadership in energy efficiency

• Continue to narrow focus in advanced biofuels feedstocks and conversion technologies

• Continue to partner business units to investigate, develop and integrate innovative solutions

• Maintain emphasis on energy at scale


Refining

Refining & Clean Fuel Production


Unconventional Liquid Fuels Demand

2006 2030 Reference Case Low Oil Price High Oil Price0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

1.4%4.0% 3.4%

6.1%0.9%

5.5%4.5%

6.7%

Oil Sands/ Bitumen Biofuels Extra-Heavy OilCoal-to-Liquids Gas-to-Liquids Shale Oil/ Other

Perc

ent

of T

otal

Liq

uids

Dem

and

Source: Energy Information Agency, 2009


Conversion Capacity Needed – Crude/Resid to Diesel

Courtesy : Purvin and Gertz Inc.

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

0

10000

20000

30000

40000

50000

60000

70000

80000

90000Global Product Consumption

Year

MMBD

Gasoline/Naphtha, 1 +% annual

Kero/Jet/Diesel, 4+% annualResid, -1% annual growth


Deficit of Diesel/Gasoil in Middle East/North Africa (MENA) Market Outlets Europe and Asia Pacific

-150

-100

-50

0

50

100

Asia Pacific Middle East North America Latin America Europe Non-Euro Mediterranean

Former Sovjet Union

Sub-Sahara Africa

Global

2008 2010 2015 2020 2025

(Def

icit)

/Sur

plu

s, M

t


Diesel Fuel Sulfur Levels MENA August 2008

Sources: www.unep.org (2008 specs) and Wood Mackenzie (future specs)

10 / 2013

50 / 2016

50 / 201010 / 2012

=10 / 2013

10 / 2010

5000 / ~2010

5000/ ~2010

Middle East diesel sulfur specifications are tightening (limit ppm S/year)

http://www.unep.org/


Hydroprocessing as the Bridging Technology

Challenges 2020-2050 similar to Chevron’s history

• Convert heavy, contaminated feedstocks to clean products economically, efficiently – led to “hydroprocessing” technology

• Even the non-conventionals need hydroprocessing

Need continuing application and innovation of hydroprocessing as bridging, transitional refining technology to address shifts in supply/demand, public policy, ramp up of non-conventional-derived fuels

Moderated by capital, GHG ‘costs’


How Hydroprocessing Fits In:An Upgrading Refinery

Refineries use hydroprocessing to:

Meet product quality specifications on transportation fuels

Upgrade heavier oil into desired, clean fuels or feedstocks

Remove contaminants to feed downstream units, e.g., for lubricants, Petrochemicals

Transition to process non-conventional feedstocks, e.g., Coal to liquids derived, bio-mass derived oils

New technologies such as Chevron’s VRSH increase liquid yield


Hydroprocessing Technology for Downstream Performance

Chevron has built broad capability in processing heavy, high-

contaminant crudes and residuum to clean products

US Refineries – Over 40 years of hydroprocessing with more than 40 units currently operating

UK Refinery – Innovative processing techniques for processing difficult crudes

S. Korea Refinery – Upgrading to increase flexibility, reduce crude cost, and upgrade to diesel and lubricant base oils with advanced hydroprocessing, including ISOCRACKING, ISODEWAXING and LC-FINING technologies

Through JVs, Chevron markets hydroprocessing technologies and catalysts


Hydroprocessing Technologies marketed by Chevron’s Joint-Ventures


Announced Capacity Increases May Solve Most of the ME HCR Capacity Shortage

Capacity Increase New Capacities HCR, % CDU

Country CDU HCR CDU HCR Previous New

Bahrain - -

262,000 60,000 22.9% 22.9%

Iran 150,000 -

1,601,000 136,500 9.4% 8.5%Iraq 750,000 96,500 1,347,500 165,741 11.6% 12.3%Israel - 65,000 220,000 65,000 0.0% 29.5%

Jordan - -

90,400 4,350 4.8% 4.8%Kuwait 679,000 70,000 1,568,200 185,650 13.0% 11.8%

Oman 330,000 -

415,000 -

0.0% 0.0%Qatar 250,000 76,000 450,000 96,000 10.0% 21.3%Saudi Arabia 800,000 185,000 2,880,000 308,820 6.0% 10.7%

Syria 350,000 -

589,865 26,410 11.0% 4.5%UAE 600,000 37,000 1,381,250 68,050 4.0% 4.9%

Yemen - -

140,000 -

0.0% 0.0%Algeria 300,000 78,080 750,000 78,080 0.0% 10.4%Egypt 140,000 44,000 866,250 77,500 4.6% 8.9%

Eritrea - -

14,564 -

0.0% 0.0%Libya 240,000 50,740 618,000 50,740 0.0% 8.2%Morocco 200,000 38,000 354,901 38,000 0.0% 10.7%

Sudan - -

121,700 -

0.0% 0.0%

Tunisia 120,000 -

154,000 -

0.0% 0.0%

Future

Mid-East hydroprocessing

capability will grow to meet Global

needs


Innovation Drives Performance VRSH – Refining’s FutureVacuum Resid Slurry Hydrocracking

(VRSH) technology - a unique resid conversion process for turning Vacuum Resid into high valued products Converts nearly 100% vacuum resid into

clean burning fuels Yields high value products (>80% diesel and

lighter & <20% VGO) Liquid yield 115-120%, no coke R&D pilot continues to improve the process

and reduce technology risk Focus on optimizing catalyst formulation &

operating flexibility


Summary

Our comprehensive Environmental,

Social and Health Assessment process

applies leading technologies to reduce

environmental, social and health

impacts and risks from our activities

Upstream, Renewables, Refining

Technology Developments for the

Mid-East and Chevron will depend on:

• Innovation• Leveraged strengths• Collaboration/Partnerships

Documents

Prospective Technology Developments Up to 2050 Bharat Srinivasan Managing Director, Technology Marketing 9th Arab Energy Conference Doha, Qatar May 9 –