UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 20192022
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission File Number 001-00368
Chevron CorporationCorporation
(Exact name of registrant as specified in its charter)
| 6001 Bollinger Canyon Road | |||||||||||||||||||||||
| Delaware | 94-0890210 | San Ramon, | California | 94583-2324 | |||||||||||||||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | (Address of principal executive offices) (Zip Code) | |||||||||||||||||||||
Registrant’s telephone number, including area code (925) (925) 842-1000
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
| Common stock, par value $.75 per share | CVX | New York Stock Exchange | ||||||||||||
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes þ No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes o No þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes þ No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☑ | Accelerated filer | ☐ | ||||||||||||||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | ||||||||||||||||||||||||||
| Emerging growth company | ☐ | ||||||||||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal controls over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. o
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No þ
The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter — $236.2$283.4 billion (As of June 28, 2019)30, 2022)
Number of Shares of Common Stock outstanding as of February 10, 20202023 — 1,879,324,7651,906,674,044
DOCUMENTS INCORPORATED BY REFERENCE
(To The Extent Indicated Herein)
Notice of the 20202023 Annual Meeting and 20202023 Proxy Statement, to be filed pursuant to Rule 14a-6(b) under the Securities Exchange Act of 1934, in connection with the company’s 20202023 Annual Meeting of Stockholders (in Part III)
TABLE OF CONTENTS
| ITEM | PAGE | ||||||||||
9C. | |||||||||||
1
| ITEM | PAGE | |
| 4. | Mine Safety Disclosures | |
| Information about our Executive Officers | ||
| 16. | Form 10-K Summary | |
CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION
FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This Annual Report on Form 10-K of Chevron Corporation contains forward-looking statements relating to Chevron’s operations and energy transition plans that are based on management’s current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries. Words or phrases such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “advances,” “commits,” “drives,” “aims,” “forecasts,” “projects,” “believes,” “approaches,” “seeks,” “schedules,” “estimates,” “positions,” “pursues,” “may,” “can,” “could,” “should,” “will,” “budgets,” “outlook,” “trends,” “guidance,” “focus,” “on schedule,” “on track,” “is slated,” “goals,” “objectives,” “strategies,” “opportunities,” “poised”“poised,” “potential,” “ambitions,” “aspires” and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, many of which are beyond the company’s control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Among the important factors that could cause actual results to differ materially from those projected in the forward-looking statements are: changing crude oil and natural gas prices;prices and demand for the company’s products, and production curtailments due to market conditions; crude oil production quotas or other actions that might be imposed by the Organization of Petroleum Exporting Countries and other producing countries; technological advancements; changes to government policies in the countries in which the company operates; public health crises, such as pandemics (including coronavirus (COVID-19)) and epidemics, and any related government policies and actions; disruptions in the company’s global supply chain, including supply chain constraints and escalation of the cost of goods and services; changing economic, regulatory and political environments in the various countries in which the company operates; general domestic and international economic and political conditions, including the military conflict between Russia and Ukraine and the global response to such conflict; changing refining, marketing and chemicals margins; the company’s ability to realize anticipated cost savings and efficiencies associated with enterprise transformation initiatives; actions of competitors or regulators; timing of exploration expenses; timing of crude oil liftings; the competitiveness of alternate-energy sources or product substitutes; technological developments;development of large carbon capture and offset markets; the results of operations and financial condition of the company’s suppliers, vendors, partners and equity affiliates, particularly during extended periods of low prices for crude oil and natural gas;the COVID-19 pandemic; the inability or failure of the company’s joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude oil and natural gas development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of the company’s operations due to war, accidents, political events, civil unrest, severe weather, cyber threats, terrorist acts, and public health crises, such as pandemics and epidemics; crude oil production quotas or other actions that might be imposed by the Organization of Petroleum Exporting Countries and other producing countries, or other natural or human causes beyond the company’s control; changing economic, regulatory and political environments in the various countries in which the company operates; general domestic and international economic and political conditions; the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant operational, investment or product changes undertaken or required by existing or future environmental statutes and regulations, including international agreements and national or regional legislation and regulatory measures to limit or reduce greenhouse gas emissions; the potential liability resulting from pending or future litigation; the company’s future acquisitions or dispositions of assets or shares or the delay or failure of such transactions to close based on required closing conditions; the potential for gains and losses from asset dispositions or impairments; government-mandatedgovernment mandated sales, divestitures, recapitalizations, industry-specific taxes and tax audits, tariffs, sanctions, changes in fiscal terms or restrictions on scope of company operations; foreign currency movements compared with the U.S. dollar; higher inflation and related impacts; material reductions in corporate liquidity and access to debt markets; the receipt of required Board authorizations to implement capital allocation strategies, including future stock repurchase programs and dividend payments; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; the company’s ability to identify and mitigate the risks and hazards inherent in operating in the global energy industry; and the factors set forth under the heading “Risk Factors” on pages 1820 through 2126 in this report. Other unpredictable or unknown factors not discussed in this report could also have material adverse effects on forward-looking statements.
PART I
Item 1. Business
General Development of Business
Summary Description of Chevron
Chevron Corporation,* a Delaware corporation, manages its investments in subsidiaries and affiliates and provides administrative, financial, management and technology support to U.S. and international subsidiaries that engage in integrated energy and chemicals operations. Upstream operations consist primarily of exploring for, developing, producing and producingtransporting crude oil and natural gas; processing, liquefaction, transportation and regasification associated with liquefied natural gas; transporting crude oil by major international oil export pipelines; transporting, storage and marketing of natural gas; and a gas-to-liquids plant. Downstream operations consist primarily of refining crude oil into petroleum products; marketing of crude oil, refined products, and refined products;lubricants; manufacturing and marketing of renewable fuels; transporting crude oil and refined products by pipeline, marine vessel, motor equipment and rail car; and manufacturing and marketing of commodity petrochemicals, plastics for industrial uses and fuel and lubricant additives.
A list of the company’s majorsignificant subsidiaries is presented on page E-1. As of December 31, 2019, Chevron had approximately 48,200 employees (including about 3,500 service station employees). Approximately 25,400 employees (including about 3,200 service station employees), or 53 percent, were employed in U.S. operations.Exhibit 21.1.
Overview of Petroleum Industry
Petroleum industry operations and profitability are influenced by many factors. Prices for crude oil, natural gas, liquefied natural gas, petroleum products and petrochemicals are generally determined by supply and demand. Production levels from the members of the Organization of Petroleum Exporting Countries (OPEC), Russia and the United States are the major factors in determining worldwide supply. Demand for crude oil and its products and for natural gas is largely driven by the conditions of local, national and global economies, although weather patterns, the pace of energy transition and taxation relative to other energy sources also play a significant part. Laws and governmental policies, particularly in the areas of taxation, energy and the environment, affect where and how companies invest, conduct their operations, select feedstocks, and formulate their products and, in some cases, limit their profits directly.
Strong competition exists in all sectors of the petroleum and petrochemical industries in supplying the energy, fuel and chemical needs of industry and individual consumers. In the upstream business, Chevron competes with fully integrated, major global petroleum companies, as well as independent and national petroleum companies, for the acquisition of crude oil and natural gas leases and other properties and for the equipment and labor required to develop and operate those properties. In its downstream business, Chevron competes with fully integrated, major petroleum companies, as well as independent refining and marketing, transportation and chemicals entities and national petroleum companies in the refining, manufacturing, sale and marketing of fuels, lubricants, additives and petrochemicals.
Operating Environment
Refer to pages 2832 through 3440 of this Form 10-K in Management’s Discussion and Analysis of Financial Condition and Results of Operations for a discussion of the company’s current business environment and outlook.
Chevron’s Strategic Direction
Chevron’s strategy is to leverage our strengths to safely deliver lower carbon energy to a growing world. Our primary objective is to deliver industry-leading resultshigher returns, lower carbon and superior shareholder value in any business environment. InWe are building on our capabilities, assets and customer relationships as we aim to lead in lower carbon intensity oil, products and natural gas, as well as advance new products and solutions that reduce the upstream, the company’s strategy is to deliver industry-leading returns while developing high-value resource opportunities. In the downstream, the company’s strategy iscarbon emissions of major industries. We aim to grow earnings acrossour traditional oil and gas business, lower the value chain and make targeted investments to lead the industry in returns. In support of the company’s approach to the energy transition, Chevron is focused on lowering carbon intensity cost efficiently, increasing the use of renewablesour operations and grow new lower carbon businesses in its business,renewable fuels, hydrogen, carbon capture, offsets, and investing in future breakthroughother emerging technologies.
Information about the company is available on the company’s website at www.chevron.com. Information contained on the company’s website is not part of this Annual Report on Form 10-K. The company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge on the company’s website soon after such reports are filed with or furnished to the U.S. Securities and Exchange Commission (SEC). The reports are also available on the SEC’s website at www.sec.gov.
* Incorporated in Delaware in 1926 as Standard Oil Company of California, the company adopted the name Chevron Corporation in 1984 and ChevronTexaco Corporation in 2001. In 2005, ChevronTexaco Corporation changed its name to Chevron Corporation. As used in this report, the term “Chevron” and such terms as “the company,” “the corporation,” “our,” “we,” “us” and "its" may refer to Chevron Corporation, one or more of its consolidated subsidiaries, or all of them taken as a whole, but unless stated otherwise they do not include “affiliates” of Chevron — i.e., those companies accounted for by the equity method (generally owned 50 percent or less) or non-equity method investments. All of these terms are used for convenience only and are not intended as a precise description of any of the separate companies, each of which manages its own affairs.
3
Human Capital Management
Chevron invests in its workforce and culture, with the objective of engaging employees to develop their full potential to deliver energy solutions and enable human progress. The Chevron Way explains the company’s beliefs, vision, purpose and values. It guides how the company’s employees work and establishes a common understanding of culture and aspirations.
Chevron hires, develops, and strives to retain a diverse workforce of high-performing talent, and fosters a culture that values diversity, inclusion and employee engagement. Chevron leadership is accountable for the company’s investment in people and the company’s culture. This includes reviews of metrics addressing critical function hiring, leadership development, retention, diversity and inclusion, and employee engagement.
The following table summarizes the number of Chevron employees by gender, where data is available, and by region as of December 31, 2022.
| At December 31, 2022 | ||||||||||||||||||||||||||
| Female | Male | Gender data not available1 | Total Employees | |||||||||||||||||||||||
| Number of Employees | Percentage | Number of Employees | Percentage | Number of Employees | Percentage | Number of Employees | Percentage | |||||||||||||||||||
| Non-Service Station Employees | ||||||||||||||||||||||||||
| U.S. | 5,343 | 27 | % | 14,609 | 73 | % | 23 | — | % | 19,975 | 46 | % | ||||||||||||||
| Other Americas | 1,005 | 28 | % | 2,536 | 71 | % | 21 | 1 | % | 3,562 | 8 | % | ||||||||||||||
| Africa | 613 | 16 | % | 3,246 | 84 | % | 3 | — | % | 3,862 | 9 | % | ||||||||||||||
| Asia | 2,420 | 34 | % | 4,675 | 66 | % | 32 | — | % | 7,127 | 16 | % | ||||||||||||||
| Australia | 557 | 25 | % | 1,629 | 74 | % | 3 | — | % | 2,189 | 5 | % | ||||||||||||||
| Europe | 433 | 28 | % | 1,099 | 71 | % | 11 | 1 | % | 1,543 | 4 | % | ||||||||||||||
| Total Non-Service Station Employees | 10,371 | 27 | % | 27,794 | 73 | % | 93 | — | % | 38,258 | 87 | % | ||||||||||||||
| Service Station Employees | 2,121 | 38 | % | 1,675 | 30 | % | 1,792 | 32 | % | 5,588 | 13 | % | ||||||||||||||
| Total Employees | 12,492 | 28 | % | 29,469 | 67 | % | 1,885 | 4 | % | 43,846 | 100 | % | ||||||||||||||
1 Includes employees where gender data was not collected or employee chose not to disclose gender.
Hiring, Development and Retention
The company’s approach to attracting, developing and retaining a global, diverse workforce of high-performing talent is anchored in a long-term employment model that fosters an environment of personal growth and engagement. Chevron’s philosophy is to offer compelling career opportunities and a competitive total compensation and benefits package linked to individual and enterprise performance. Chevron recruits new employees in part through partnerships with universities and diversity associations. In addition, the company recruits experienced hires to provide specialized skills.
Chevron’s learning and development programs are designed to help employees achieve their full potential by building technical, operating and leadership capabilities at all levels to produce energy safely, reliably and efficiently. Chevron’s leadership regularly reviews metrics on employee training and development programs, which are continually refined to meet the needs of our evolving business. The company invests in developing leadership at every level. For example, Chevron expanded a coaching program that reaches deeper into the organization, including frontline supervisors, managers and individual contributors.
In addition, to ensure business continuity, leadership regularly reviews the talent pipeline, identifies and develops succession candidates, and builds succession plans for key positions. The Board of Directors provides oversight of CEO and executive succession planning.
Management routinely reviews the retention of its professional population, which includes executives, all levels of management, and the majority of its regular employee population. The annual voluntary attrition for this population was 4.5 percent, which is in line with rates over a five-year comparison period. The voluntary attrition rate generally excludes employee departures under enterprise-wide restructuring programs. Chevron believes its low voluntary attrition rate is in part a result of the company’s commitment to employee development, its long-term employment model, competitive pay and benefits, and its culture.
4
Diversity and Inclusion
Chevron believes human ingenuity has the power to solve difficult problems when diverse people, ideas and experiences come together in an inclusive environment. Chevron reinforces the values of diversity and inclusion through recruitment and talent development, equitable selection processes, community partnerships and supplier diversity. Chevron strives to build an inclusive environment through innovative programs such as the company’s MARC (Men Advocating Real Change) program launched in 2017, in partnership with the non-profit organization Catalyst, to facilitate discussions on gender equity in the workplace. MARC is active in over 35 Chevron locations on six continents around the world with over 5,000 participants since inception. Also, when hiring for a position, many selection processes now include inclusion counselors who help check against unconscious biases and provide outside perspectives.
Chevron’s leadership development also reflects Chevron’s diversity focus. In 2022, Chevron offered numerous leadership programs to promote leadership diversity, including the Global Women’s Leadership Development Program, Transformational Leadership for Multicultural Women, Executive Leadership Council (U.S. Black employees), Asia Pacific Leadership Development Program, Asian American Leadership Development Program, and Latino Leadership Development Program. In addition, Chevron has 11 employee networks (voluntary groups of employees that come together based on shared identity or interests) and a Chairman’s Inclusion Council, which provides the employee network presidents with a direct line of communication to the Chairman and Chief Executive Officer, the Chief Human Resources Officer, the Chief Diversity and Inclusion Officer, and the executive leadership team to collaborate and discuss how employee networks can reinforce Chevron’s values of diversity and inclusion.
Employee Engagement
Employee engagement is an indicator of employee well-being and commitment to the company’s values, purpose and strategies. Chevron regularly conducts employee surveys to assess the health of the company’s culture; recent surveys indicate high employee engagement. Chevron’s survey frequency enables the company to better understand employee sentiment throughout the year and gain insights into employee well-being. The company also introduced surveys to understand employee experience trends throughout the employee lifecycle.
Chevron prioritizes the health, safety and well-being of its employees. Chevron’s safety culture empowers every member of its workforce to exercise stop-work authority without repercussion to address any potential unsafe work conditions. The company has set clear expectations for leaders to deliver operational excellence by demonstrating their commitment to prioritizing the safety and health of its workforce, and the protection of communities, the environment and the company’s assets. Additionally, the company offers long-standing employee support programs such as Ombuds, an independent resource designed to equip employees with options to address and resolve workplace issues; a company hotline, where employees can report concerns to the Corporate Compliance department; and an Employee Assistance Program, a confidential consulting service that can help employees resolve a broad range of personal, family and work-related concerns. In February, Chevron received the 2023 Platinum Bell Seal for Workplace Mental Health by Mental Health America. The Bell Seal is a first-of-its-kind workplace mental health certification that recognizes employers who strive to create mentally healthy workplaces for their employees.
5
Description of Business and Properties
The upstream and downstream activities of the company and its equity affiliates are widely dispersed geographically, with operations and projects* in North America, South America, Europe, Africa, Asia and Australia. These activities are managed by the Oil, Products and Gas organization. Tabulations of segment sales and other operating revenues, earnings, assets, and income taxes for the three years ending December 31, 2019,2022, and assets as of the end of 20192022 and 20182021 — for the United States and the company’s international geographic areas — are in Note 1214 Operating Segments and Geographic Data to the Consolidated Financial Statements beginning on page 68.Statements. Similar comparative data for the company’s investments in and income from equity affiliates and property, plant and equipment are in Note 13 beginning on page 7115 Investments and Advances and Note 16 on page 77.18 Property, Plant and Equipment. Refer to page 39 of this Form 10-K in Management’s Discussion and Analysis of Financial Condition and Results of Operations for a discussion of the company’s capital and exploratory expenditures.Capital Expenditures.
Upstream
Reserves
Refer to Table V beginning on page 96 for a tabulation of the company’s proved crude oil, condensate, natural gas liquids, synthetic oil and natural gas reserves by geographic area, at the beginning of 20172020 and at each year-end from 20172020 through 2019.2022. Reserves governance, technologies used in establishing proved reserves additions, and major changes to proved reserves by geographic area for the three-year period ended December 31, 2019,2022, are summarized in the discussion for Table V. Discussion is also provided regarding the nature of, status of, and planned future activities associated with the development of proved undeveloped reserves. The company recognizes reserves for projects with various development periods, sometimes exceeding five years. The external factors that impact the duration of a project include scope and complexity, remoteness or adverse operating conditions, infrastructure constraints, and contractual limitations.
At December 31, 2019, 282022, 36 percent of the company’s net proved oil-equivalent reserves were located in the United States, 2316 percent were located in Australia and 1914 percent were located in Kazakhstan.
The net proved reserve balances at the end of each of the three years 20172020 through 20192022 are shown in the following table:
| At December 31 | |||||||||||||||||||||||||||||
| At December 31 | 2022 | 2021 | 2020 | ||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | |||||||||||||||||||||||||||
| Liquids — Millions of barrels | |||||||||||||||||||||||||||||
| Crude Oil, Condensate and Synthetic Oil — Millions of barrels | Crude Oil, Condensate and Synthetic Oil — Millions of barrels | ||||||||||||||||||||||||||||
| Consolidated Companies | 4,771 | 4,975 | 4,530 | Consolidated Companies | 3,868 | 3,821 | 3,766 | ||||||||||||||||||||||
| Affiliated Companies | 1,750 | 1,815 | 2,012 | Affiliated Companies | 1,129 | 1,254 | 1,553 | ||||||||||||||||||||||
| Total Liquids | 6,521 | 6,790 | 6,542 | ||||||||||||||||||||||||||
| Total Crude Oil, Condensate and Synthetic Oil | Total Crude Oil, Condensate and Synthetic Oil | 4,997 | 5,075 | 5,319 | |||||||||||||||||||||||||
| Natural Gas Liquids — Millions of barrels | Natural Gas Liquids — Millions of barrels | ||||||||||||||||||||||||||||
| Consolidated Companies | Consolidated Companies | 1,002 | 935 | 709 | |||||||||||||||||||||||||
| Affiliated Companies | Affiliated Companies | 86 | 103 | 119 | |||||||||||||||||||||||||
| Total Natural Gas Liquids | Total Natural Gas Liquids | 1,088 | 1,038 | 828 | |||||||||||||||||||||||||
| Natural Gas — Billions of cubic feet | Natural Gas — Billions of cubic feet | ||||||||||||||||||||||||||||
| Consolidated Companies | 26,587 | 28,733 | 27,514 | Consolidated Companies | 28,765 | 28,314 | 27,006 | ||||||||||||||||||||||
| Affiliated Companies | 2,870 | 2,843 | 3,222 | Affiliated Companies | 2,099 | 2,594 | 2,916 | ||||||||||||||||||||||
| Total Natural Gas | 29,457 | 31,576 | 30,736 | Total Natural Gas | 30,864 | 30,908 | 29,922 | ||||||||||||||||||||||
Oil-Equivalent — Millions of barrels1 | Oil-Equivalent — Millions of barrels1 | ||||||||||||||||||||||||||||
| Consolidated Companies | 9,202 | 9,764 | 9,116 | Consolidated Companies | 9,664 | 9,475 | 8,976 | ||||||||||||||||||||||
| Affiliated Companies | 2,229 | 2,289 | 2,549 | Affiliated Companies | 1,565 | 1,789 | 2,158 | ||||||||||||||||||||||
| Total Oil-Equivalent | 11.431 | 12.053 | 11.665 | Total Oil-Equivalent | 11,229 | 11,264 | 11,134 | ||||||||||||||||||||||
1 Oil-equivalent conversion ratio is 6,000 cubic feet of natural gas = 1 barrel of crude oil.
* As used in this report, the term “project” may describe new upstream development activity, individual phases in a multiphase development, maintenance activities, certain existing assets, new investments in downstream and chemicals capacity, investments in emerging and sustainable energy activities, and certain other activities. All of these terms are used for convenience only and are not intended as a precise description of the term “project” as it relates to any specific governmental law or regulation.
6
| Components of Oil-Equivalent | |||||||||||||||
| Oil-Equivalent | Liquids | Natural Gas | |||||||||||||
| Thousands of barrels per day (MBPD) | (MBPD)1 | (MBPD) | (MMCFPD) | ||||||||||||
| Millions of cubic feet per day (MMCFPD) | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||
| United States | 929 | 791 | 724 | 618 | 1,225 | 1,034 | |||||||||
| Other Americas | |||||||||||||||
| Argentina | 27 | 24 | 23 | 20 | 25 | 24 | |||||||||
| Brazil | 8 | 11 | 8 | 10 | 2 | 4 | |||||||||
Canada2 | 135 | 116 | 119 | 103 | 95 | 79 | |||||||||
| Colombia | 11 | 14 | — | — | 64 | 82 | |||||||||
| Total Other Americas | 181 | 165 | 150 | 133 | 186 | 189 | |||||||||
| Africa | |||||||||||||||
| Angola | 95 | 108 | 86 | 98 | 52 | 59 | |||||||||
Democratic Republic of the Congo3 | — | 1 | — | 1 | — | — | |||||||||
| Nigeria | 209 | 239 | 173 | 200 | 215 | 233 | |||||||||
| Republic of Congo | 52 | 52 | 49 | 49 | 13 | 14 | |||||||||
| Total Africa | 356 | 400 | 308 | 348 | 280 | 306 | |||||||||
| Asia | |||||||||||||||
| Azerbaijan | 20 | 20 | 18 | 18 | 10 | 10 | |||||||||
| Bangladesh | 110 | 112 | 4 | 4 | 638 | 648 | |||||||||
| China | 31 | 29 | 16 | 16 | 93 | 84 | |||||||||
| Indonesia | 109 | 132 | 101 | 113 | 52 | 113 | |||||||||
| Kazakhstan | 49 | 46 | 28 | 27 | 129 | 120 | |||||||||
| Myanmar | 15 | 16 | — | — | 93 | 98 | |||||||||
Partitioned Zone4 | — | — | — | — | — | — | |||||||||
| Philippines | 26 | 26 | 3 | 3 | 136 | 138 | |||||||||
| Thailand | 238 | 236 | 65 | 66 | 1,038 | 1,022 | |||||||||
| Total Asia | 598 | 617 | 235 | 247 | 2,189 | 2,233 | |||||||||
| Australia/Oceania | |||||||||||||||
| Australia | 455 | 426 | 45 | 42 | 2,460 | 2,304 | |||||||||
| Total Australia/Oceania | 455 | 426 | 45 | 42 | 2,460 | 2,304 | |||||||||
| Europe | |||||||||||||||
Denmark5 | 5 | 19 | 3 | 12 | 11 | 45 | |||||||||
| United Kingdom | 62 | 65 | 44 | 43 | 108 | 133 | |||||||||
| Total Europe | 67 | 84 | 47 | 55 | 119 | 178 | |||||||||
| Total Consolidated Companies | 2,586 | 2,483 | 1,509 | 1,443 | 6,459 | 6,244 | |||||||||
Affiliates2,6 | 472 | 447 | 356 | 339 | 698 | 645 | |||||||||
Total Including Affiliates7 | 3,058 | 2,930 | 1,865 | 1,782 | 7,157 | 6,889 | |||||||||
1 Oil-equivalent conversion ratio is 6,000 cubic feet of natural gas = 1 barrel of crude oil. | |||||||||||||||
2 Includes synthetic oil: Canada, net | 53 | 53 | 53 | 53 | — | — | |||||||||
| Venezuelan affiliate, net | 3 | 24 | 3 | 24 | — | — | |||||||||
3 Chevron sold its interest in a concession in the Democratic Republic of Congo in April 2018. | |||||||||||||||
4 Located between Saudi Arabia and Kuwait. Production has been shut-in since May 2015. | |||||||||||||||
5 Chevron sold its 12 percent nonoperated working interest in the Danish Underground Consortium in April 2019. | |||||||||||||||
6 Volumes represent Chevron’s share of production by affiliates, including Tengizchevroil in Kazakhstan; Petroboscan and Petropiar in Venezuela; and Angola LNG in Angola. | |||||||||||||||
7 Volumes include natural gas consumed in operations of 638 million and 619 million cubic feet per day in 2019 and 2018, respectively. Total “as sold” natural gas volumes were 6,519 million and 6,270 million cubic feet per day for 2019 and 2018, respectively. | |||||||||||||||
Average Sales Prices and Production Costs per Unit of Production
Refer to Table IV on page 95 for the company’s average sales price per barrel of liquidscrude (including crude oil condensateand condensate) and natural gas liquids)liquids and per thousand cubic feet of natural gas produced, and the average production cost per oil-equivalent barrel for 2019, 20182022, 2021 and 2017.2020.
Gross and Net Productive Wells
The following table summarizes gross and net productive wells at year-end 20192022 for the company and its affiliates:
| At December 31, 2022 | |||||||||||||||||||||||
Productive Oil Wells1 | Productive Gas Wells1 | ||||||||||||||||||||||
| Gross | Net | Gross | Net | ||||||||||||||||||||
| United States | 34,834 | 27,364 | 2,078 | 1,712 | |||||||||||||||||||
| Other Americas | 1,144 | 708 | 266 | 176 | |||||||||||||||||||
| Africa | 1,623 | 635 | 46 | 17 | |||||||||||||||||||
| Asia | 1,764 | 779 | 1,431 | 436 | |||||||||||||||||||
| Australia | 532 | 299 | 109 | 29 | |||||||||||||||||||
| Europe | 38 | 7 | — | — | |||||||||||||||||||
| Total Consolidated Companies | 39,935 | 29,792 | 3,930 | 2,370 | |||||||||||||||||||
Affiliates2 | 1,677 | 607 | — | — | |||||||||||||||||||
| Total Including Affiliates | 41,612 | 30,399 | 3,930 | 2,370 | |||||||||||||||||||
| Multiple completion wells included above | 715 | 411 | 147 | 115 | |||||||||||||||||||
1 Gross wells represent the total number of wells in which Chevron has an ownership interest. Net wells represent the sum of Chevron’s ownership interest in gross wells. | |||||||||||||||||||||||
2 Includes gross 1,427 and net 482 productive oil wells for interests accounted for by the non-equity method. | |||||||||||||||||||||||
Production Outlook
| At December 31, 2019 | |||||||||||
| Productive Oil Wells* | Productive Gas Wells* | ||||||||||
| Gross | Net | Gross | Net | ||||||||
| United States | 39,282 | 28,179 | 2,727 | 1,978 | |||||||
| Other Americas | 1,070 | 651 | 190 | 117 | |||||||
| Africa | 1,713 | 664 | 27 | 11 | |||||||
| Asia | 14,450 | 12,522 | 3,577 | 2,012 | |||||||
| Australia/Oceania | 540 | 303 | 103 | 27 | |||||||
| Europe | 27 | 5 | — | — | |||||||
| Total Consolidated Companies | 57,082 | 42,324 | 6,624 | 4,145 | |||||||
| Affiliates | 1,643 | 588 | — | — | |||||||
| Total Including Affiliates | 58,725 | 42,912 | 6,624 | 4,145 | |||||||
| Multiple completion wells included above | 629 | 352 | 147 | 116 | |||||||
| * Gross wells represent the total number of wells in which Chevron has an ownership interest. Net wells represent the sum of Chevron’s ownership interest in gross wells. | |||||||||||
Acreage
At December 31, 2019,2022, the company owned or had under lease or similar agreements undeveloped and developed crude oil and natural gas properties throughout the world. The geographical distribution of the company’s acreage is shown in the following table:
Undeveloped2 | Developed | Developed and Undeveloped | ||||||||||||||||||||||||||||||||||||
Thousands of acres1 | Gross | Net | Gross | Net | Gross | Net | ||||||||||||||||||||||||||||||||
| United States | 3,784 | 3,277 | 3,909 | 2,565 | 7,693 | 5,842 | ||||||||||||||||||||||||||||||||
| Other Americas | 19,322 | 11,109 | 1,088 | 239 | 20,410 | 11,348 | ||||||||||||||||||||||||||||||||
| Africa | 10,286 | 5,695 | 1,884 | 793 | 12,170 | 6,488 | ||||||||||||||||||||||||||||||||
| Asia | 16,850 | 6,795 | 1,105 | 430 | 17,955 | 7,225 | ||||||||||||||||||||||||||||||||
| Australia | 2,853 | 1,933 | 2,069 | 815 | 4,922 | 2,748 | ||||||||||||||||||||||||||||||||
| Europe | 103 | 20 | 15 | 3 | 118 | 23 | ||||||||||||||||||||||||||||||||
| Total Consolidated Companies | 53,198 | 28,829 | 10,070 | 4,845 | 63,268 | 33,674 | ||||||||||||||||||||||||||||||||
Affiliates3 | 695 | 286 | 109 | 50 | 804 | 336 | ||||||||||||||||||||||||||||||||
| Total Including Affiliates | 53,893 | 29,115 | 10,179 | 4,895 | 64,072 | 34,010 | ||||||||||||||||||||||||||||||||
1 Gross acres represent the total number of acres in which Chevron has an ownership interest. Net acres represent the sum of Chevron’s ownership interest in gross acres. | ||||||||||||||||||||||||||||||||||||||
2 The gross undeveloped acres that will expire in 2023, 2024 and 2025 if production is not established by certain required dates are 4,387, 996, and 1,412, respectively. | ||||||||||||||||||||||||||||||||||||||
3 Includes gross 405 and net 141 undeveloped and gross 19 and net 5 developed acreage for interests accounted for by the non-equity method. | ||||||||||||||||||||||||||||||||||||||
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Undeveloped2 | Developed | Developed and Undeveloped | ||||||||||||||||
Thousands of acres1 | Gross | Net | Gross | Net | Gross | Net | ||||||||||||
| United States | 3,665 | 3,214 | 4,149 | 2,886 | 7,814 | 6,100 | ||||||||||||
| Other Americas | 17,004 | 10,543 | 1,219 | 284 | 18,223 | 10,827 | ||||||||||||
| Africa | 3,717 | 1,443 | 2,238 | 933 | 5,955 | 2,376 | ||||||||||||
| Asia | 19,165 | 7,992 | 1,678 | 924 | 20,843 | 8,916 | ||||||||||||
| Australia/Oceania | 10,882 | 5,697 | 2,061 | 812 | 12,943 | 6,509 | ||||||||||||
| Total Consolidated Companies | 54,433 | 28,889 | 11,345 | 5,839 | 65,778 | 34,728 | ||||||||||||
| Affiliates | 497 | 219 | 307 | 117 | 804 | 336 | ||||||||||||
| Total Including Affiliates | 54,930 | 29,108 | 11,652 | 5,956 | 66,582 | 35,064 | ||||||||||||
1 Gross acres represent the total number of acres in which Chevron has an ownership interest. Net acres represent the sum of Chevron’s ownership interest in gross acres. | ||||||||||||||||||
2 The gross undeveloped acres that will expire in 2020, 2021 and 2022 if production is not established by certain required dates are 1,136, 2,644 and 4,180, respectively. | ||||||||||||||||||
Net Production of Crude Oil, Natural Gas Liquids and Natural Gas
The following table summarizes the net production of crude oil, natural gas liquids and natural gas for 2022 and 2021 by the company and its affiliates. Worldwide oil-equivalent production of 3 million barrels per day in 2022 was down approximately 3 percent from 2021. International production decreased 7 percent in 2022 primarily due to the end of concessions in Thailand and Indonesia, while U.S. production increased 4 percent compared to 2021, mainly in the Permian Basin. Refer to the Results of Operations section for a detailed discussion of the factors explaining the changes in production for liquids (including crude oil, condensate, natural gas liquids and synthetic oil) and natural gas, and refer to Table V for information on annual production by geographical region.
| Components of Oil-Equivalent | ||||||||||||||||||||||||||||||||||||||
| Oil-Equivalent | Crude Oil | Natural Gas Liquids | Natural Gas | |||||||||||||||||||||||||||||||||||
| Thousands of barrels per day (MBPD) | (MBPD)1 | (MBPD)2 | (MBPD) | (MMCFPD) | ||||||||||||||||||||||||||||||||||
| Millions of cubic feet per day (MMCFPD) | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||
| United States | 1,181 | 1,139 | 650 | 643 | 238 | 215 | 1,758 | 1,689 | ||||||||||||||||||||||||||||||
| Other Americas | ||||||||||||||||||||||||||||||||||||||
| Argentina | 40 | 33 | 35 | 28 | — | — | 34 | 31 | ||||||||||||||||||||||||||||||
| Brazil | — | 3 | — | 3 | — | — | — | — | ||||||||||||||||||||||||||||||
Canada3 | 139 | 161 | 109 | 129 | 7 | 7 | 135 | 150 | ||||||||||||||||||||||||||||||
| Total Other Americas | 179 | 197 | 144 | 160 | 7 | 7 | 169 | 181 | ||||||||||||||||||||||||||||||
| Africa | ||||||||||||||||||||||||||||||||||||||
| Angola | 70 | 78 | 57 | 65 | 4 | 5 | 49 | 52 | ||||||||||||||||||||||||||||||
| Equatorial Guinea | 56 | 52 | 12 | 12 | 7 | 6 | 223 | 204 | ||||||||||||||||||||||||||||||
| Nigeria | 152 | 165 | 101 | 118 | 6 | 6 | 266 | 246 | ||||||||||||||||||||||||||||||
| Republic of Congo | 31 | 39 | 28 | 36 | 1 | 1 | 11 | 13 | ||||||||||||||||||||||||||||||
| Total Africa | 309 | 334 | 198 | 231 | 18 | 18 | 549 | 515 | ||||||||||||||||||||||||||||||
| Asia | ||||||||||||||||||||||||||||||||||||||
| Bangladesh | 118 | 112 | 2 | 2 | — | — | 696 | 655 | ||||||||||||||||||||||||||||||
| China | 28 | 30 | 10 | 12 | — | — | 109 | 104 | ||||||||||||||||||||||||||||||
Indonesia4 | 3 | 67 | 1 | 62 | — | — | 18 | 30 | ||||||||||||||||||||||||||||||
| Israel | 101 | 91 | 1 | 1 | — | — | 602 | 541 | ||||||||||||||||||||||||||||||
| Kazakhstan | 40 | 41 | 24 | 24 | — | — | 96 | 103 | ||||||||||||||||||||||||||||||
| Kurdistan Region of Iraq | 1 | 2 | 1 | 2 | — | — | — | — | ||||||||||||||||||||||||||||||
| Myanmar | 17 | 15 | — | — | — | — | 94 | 92 | ||||||||||||||||||||||||||||||
| Partitioned Zone | 60 | 58 | 58 | 56 | — | — | 7 | 7 | ||||||||||||||||||||||||||||||
Thailand4 | 67 | 163 | 18 | 41 | — | — | 298 | 736 | ||||||||||||||||||||||||||||||
| Total Asia | 435 | 579 | 115 | 200 | — | — | 1,920 | 2,268 | ||||||||||||||||||||||||||||||
| Australia | ||||||||||||||||||||||||||||||||||||||
| Australia | 482 | 449 | 42 | 43 | — | — | 2,643 | 2,434 | ||||||||||||||||||||||||||||||
| Total Australia | 482 | 449 | 42 | 43 | — | — | 2,643 | 2,434 | ||||||||||||||||||||||||||||||
| Europe | ||||||||||||||||||||||||||||||||||||||
| United Kingdom | 14 | 14 | 13 | 13 | — | — | 9 | 6 | ||||||||||||||||||||||||||||||
| Total Europe | 14 | 14 | 13 | 13 | — | — | 9 | 6 | ||||||||||||||||||||||||||||||
| Total Consolidated Companies | 2,600 | 2,712 | 1,162 | 1,290 | 263 | 240 | 7,048 | 7,093 | ||||||||||||||||||||||||||||||
Affiliates5 | 399 | 387 | 278 | 263 | 16 | 21 | 629 | 616 | ||||||||||||||||||||||||||||||
Total Including Affiliates6 | 2,999 | 3,099 | 1,440 | 1,553 | 279 | 261 | 7,677 | 7,709 | ||||||||||||||||||||||||||||||
1 Oil-equivalent conversion ratio is 6,000 cubic feet of natural gas = 1 barrel of crude oil. | ||||||||||||||||||||||||||||||||||||||
2 Includes crude oil, condensate and synthetic oil. | ||||||||||||||||||||||||||||||||||||||
3 Includes synthetic oil: | 45 | 55 | 45 | 55 | — | — | — | — | ||||||||||||||||||||||||||||||
4 Chevron concessions expired in 2021 (Indonesia) and 2022 (Thailand). | ||||||||||||||||||||||||||||||||||||||
5 Volumes represent Chevron’s share of production by affiliates, including Tengizchevroil in Kazakhstan and Angola LNG in Angola. | ||||||||||||||||||||||||||||||||||||||
6 Volumes include natural gas consumed in operations of 570 million and 592 million cubic feet per day in 2022 and 2021, respectively. Total “as sold” natural gas volumes were 7,107 million and 7,117 million cubic feet per day for 2022 and 2021, respectively. | ||||||||||||||||||||||||||||||||||||||
Delivery Commitments
The company sells crude oil and natural gas from its producing operations under a variety of contractual obligations. Most contracts generally commit the company to sell quantities based on production from specified properties, but some natural gas and crude oil sales contracts specify delivery of fixed and determinable quantities, as discussed below.quantities.
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In the United States, the company is contractually committed to deliver 951approximately 7 million barrels of crude oil and 729 billion cubic feet of natural gas to third parties from 20202023 through 2022. 2025. The company believes it can satisfy these contracts through a combination of equity production from the company’s proved developed U.S. reserves and third-party purchases. These commitments are primarily based on contracts with indexed pricing terms.
Outside the United States, the company is contractually committed to deliver a total of 2,377 billion2.8 trillion cubic feet of natural gas to third parties from 20202023 through 20222025 from operations in Australia Colombia, Indonesia and the Philippines. TheseIsrael. The Australia sales contracts contain variable pricing formulas that are generally referenced toreference the prevailing market price for crude oil, natural gas or other petroleum products at the time of delivery. The sales contracts for Israel contain formulas that generally reflect an initial base price subject to price indexation, Brent-linked or other, over the life of the contract. The company believes it can satisfy these contracts from quantities available from production of the company’s proved developed reserves in these countries.
Development Activities
Refer to Table I on page 92 for details associated with the company’s development expenditures and costs of proved property acquisitions for 2019, 20182022, 2021 and 2017.2020.
The following table summarizes the company’s net interest in productive and dry development wells completed in each of the past three years, and the status of the company’s development wells drilling at December 31, 2019.2022. A “development well” is a well drilled within the known area of a crude oil or natural gas reservoir to the depth of a stratigraphic horizon known to be productive.
| Wells Drilling* | Net Wells Completed | |||||||||||||||||||||||||||||||||||||
| at 12/31/22 | 2022 | 2021 | 2020 | |||||||||||||||||||||||||||||||||||
| Gross | Net | Prod. | Dry | Prod. | Dry | Prod. | Dry | |||||||||||||||||||||||||||||||
| United States | 185 | 98 | 454 | 2 | 319 | 2 | 539 | 2 | ||||||||||||||||||||||||||||||
| Other Americas | 7 | 5 | 35 | — | 54 | — | 27 | — | ||||||||||||||||||||||||||||||
| Africa | 3 | 1 | 6 | — | 4 | — | 5 | — | ||||||||||||||||||||||||||||||
| Asia | 23 | 8 | 32 | 1 | 35 | — | 94 | 2 | ||||||||||||||||||||||||||||||
| Australia | — | — | 1 | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Europe | — | — | 1 | — | 1 | — | 1 | — | ||||||||||||||||||||||||||||||
| Total Consolidated Companies | 218 | 112 | 529 | 3 | 413 | 2 | 666 | 4 | ||||||||||||||||||||||||||||||
| Affiliates | 13 | 1 | 6 | — | 8 | — | 13 | — | ||||||||||||||||||||||||||||||
| Total Including Affiliates | 231 | 113 | 535 | 3 | 421 | 2 | 679 | 4 | ||||||||||||||||||||||||||||||
| * Gross wells represent the total number of wells in which Chevron has an ownership interest. Net wells represent the sum of Chevron’s ownership interest in gross wells. | ||||||||||||||||||||||||||||||||||||||
| Wells Drilling* | Net Wells Completed | |||||||||||||||||||
| at 12/31/19 | 2019 | 2018 | 2017 | |||||||||||||||||
| Gross | Net | Prod. | Dry | Prod. | Dry | Prod. | Dry | |||||||||||||
| United States | 186 | 135 | 682 | 1 | 509 | 1 | 435 | 4 | ||||||||||||
| Other Americas | 16 | 11 | 36 | — | 43 | — | 40 | — | ||||||||||||
| Africa | 12 | 1 | 26 | — | 8 | — | 34 | — | ||||||||||||
| Asia | 9 | 3 | 181 | 2 | 289 | 5 | 246 | 2 | ||||||||||||
| Australia/Oceania | — | — | — | — | 1 | — | — | — | ||||||||||||
| Europe | 1 | — | 1 | — | 2 | — | 4 | — | ||||||||||||
| Total Consolidated Companies | 224 | 150 | 926 | 3 | 852 | 6 | 759 | 6 | ||||||||||||
| Affiliates | 35 | 15 | 43 | — | 39 | — | 36 | — | ||||||||||||
| Total Including Affiliates | 259 | 165 | 969 | 3 | 891 | 6 | 795 | 6 | ||||||||||||
| * Gross wells represent the total number of wells in which Chevron has an ownership interest. Net wells represent the sum of Chevron’s ownership interest in gross wells. | ||||||||||||||||||||
Exploration Activities
Refer to Table I on page 92 for detail on the company’s exploration expenditures and costs of unproved property acquisitions for 2019, 20182022, 2021 and 2017.2020.
The following table summarizes the company’s net interests in productive and dry exploratory wells completed in each of the last three years, and the number of exploratory wells drilling at December 31, 2019.2022. “Exploratory wells” are wells drilled to find and produce crude oil or natural gas in unknown areas and include delineation and appraisal wells, which are wells drilled to find a new reservoir in a field previously found to be productive of crude oil or natural gas in another reservoir or to extend a known reservoir.
| Wells Drilling* | Net Wells Completed | |||||||||||||||||||||||||||||||||||||
| at 12/31/22 | 2022 | 2021 | 2020 | |||||||||||||||||||||||||||||||||||
| Gross | Net | Prod. | Dry | Prod. | Dry | Prod. | Dry | |||||||||||||||||||||||||||||||
| United States | 1 | — | 3 | 2 | 2 | 2 | 4 | 1 | ||||||||||||||||||||||||||||||
| Other Americas | 1 | — | 1 | 1 | — | — | 2 | 2 | ||||||||||||||||||||||||||||||
| Africa | — | — | 1 | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Asia | 3 | 2 | 2 | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Australia | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Europe | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Total Consolidated Companies | 5 | 2 | 7 | 3 | 2 | 2 | 6 | 3 | ||||||||||||||||||||||||||||||
| Affiliates | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Total Including Affiliates | 5 | 2 | 7 | 3 | 2 | 2 | 6 | 3 | ||||||||||||||||||||||||||||||
| * Gross wells represent the total number of wells in which Chevron has an ownership interest. Net wells represent the sum of Chevron’s ownership interest in gross wells. | ||||||||||||||||||||||||||||||||||||||
9
| Wells Drilling* | Net Wells Completed | |||||||||||||||||||||||
| at 12/31/19 | 2019 | 2018 | 2017 | |||||||||||||||||||||
| Gross | Net | Prod. | Dry | Prod. | Dry | Prod. | Dry | |||||||||||||||||
| United States | 3 | 1 | 10 | 2 | 13 | 2 | 7 | 1 | ||||||||||||||||
| Other Americas | 2 | 2 | — | — | 1 | 1 | — | — | ||||||||||||||||
| Africa | — | — | — | — | — | — | — | — | ||||||||||||||||
| Asia | — | — | — | — | 1 | — | — | — | ||||||||||||||||
| Australia/Oceania | 1 | — | — | — | — | — | — | — | ||||||||||||||||
| Europe | — | — | — | — | — | 1 | — | 1 | ||||||||||||||||
| Total Consolidated Companies | 6 | 3 | 10 | 2 | 15 | 4 | 7 | 2 | ||||||||||||||||
| Affiliates | — | — | — | — | — | — | — | — | ||||||||||||||||
| Total Including Affiliates | 6 | 3 | 10 | 2 | 15 | 4 | 7 | 2 | ||||||||||||||||
| * Gross wells represent the total number of wells in which Chevron has an ownership interest. Net wells represent the sum of Chevron’s ownership interest in gross wells. | ||||||||||||||||||||||||
Review of Ongoing Exploration and Production Activities in Key Areas
Chevron has exploration and production activities in many of the world’s major hydrocarbon basins. Chevron’s 20192022 key upstream activities, some of which are also discussed in the section Management’s Discussion and Analysis of Financial Condition and Results of Operations beginning on page 32,, are presented below. The comments include references to “total production” and “net production,” which are defined under “Production” in Exhibit 99.1 on page E-7..
The discussion that follows references the status of proved reserves recognition for significant long-lead-time projects not on production as well as for projects recently placed on production. Reserves are not discussed for exploration activities or recent discoveries that have not advanced to a project stage, or for mature areas of production that do not have individual projects requiring significant levels of capital or exploratory investment.
United States
Upstream activities in the United States are primarily located in the midcontinent region,Texas, New Mexico, Colorado, California, and the Gulf of Mexico, California andMexico. Acreage for the Appalachian Basin.United States can be found in the Acreage table. Net daily oil-equivalent production in the United States during 2019 averaged 929,000 barrels.
As one of the largest producers in New Mexico and Texas. During 2019, net daily production in these areas averaged 259,000 barrels of crude oil, 835 million cubic feet of natural gas and 120,000 barrels of natural gas liquids (NGLs).
Chevron divested its assets in identifying well targets,the Eagle Ford Shale in drillingTexas in March 2022.
In Colorado, development in the Denver-Julesburg (DJ) Basin is primarily focused on Chevron’s Mustang and completions and in production performance. In 2019,Wells Ranch areas where the company’s comprehensive drilling plans allow for efficient resource development. In 2022, Chevron’s net daily production in the basinDJ Basin averaged 244,00053,000 barrels of crude oil, 73537,000 barrels of NGLs and 325 million cubic feet of natural gasgas.
Chevron also has operations in Colorado’s Piceance Basin, as well as an acreage position in Wyoming.
In 2022, 53 wells in Texas and 115,000 barrels29 wells in Colorado achieved Project Canary’s highest certification rating on operational and environmental performance, allowing Chevron to market responsibly sourced natural gas.
In 2022, Chevron was one of NGLs.the largest crude oil producers in California with a net daily oil equivalent production of 87,800 barrels. The company also holds approximately 360,000 net acresCalifornia operations support Chevron’s efforts to progress its lower carbon technologies with investments in geothermal and carbon capture pilots. These include the Baseload Capital pilot to utilize waste heat from existing oilfield operations and the Svante pilot to capture carbon dioxide from combustion of natural gas. These pilots leverage innovative technologies and have the potential to scale across our operations. The Baseload Capital and Svante pilots became operational in the Central Basin Platformthird and fourth quarters of the Permian Basin.
During 2019,2022, net daily production in the Gulf of Mexico averaged 200,000172,000 barrels of crude oil, 11212,000 barrels of NGLs and 101 million cubic feet of natural gas and 12,000 barrels of NGLs.gas. Chevron is engaged in various operated and nonoperated exploration, development and production activities in the deepwater Gulf of Mexico. Chevron also holds nonoperated interests in several shelf fields.
The deepwater Jack and St. Malo fields are being jointly developed with a host floating production unit located between the two fields. Chevron has a 50 percent interest in the Jack Field and a 51 percent interest in the St. Malo Field. Both fields are company operated. The company has a 40.6 percent interest in the production host facility, which is designed to accommodate production from the Jack/St. Malo development and third-party tiebacks. Total daily production from the Jack and St. Malo fields in 2019 averaged 135,000 barrels of liquids (68,000 net) and 22 million cubic feet of natural gas (11 million net). Additional development opportunities for the Jack and St. Malo fields progressed in 2019. Stage 3 development drilling continued with the final well expected to be completed in first-half 2020. Proved reserves have been recognized for this phase. Two additional wells were added to the Jack Field in 2019, with one commencing production.2022. The St. Malo Stage 4 waterflood project reached a final investment decision in August 2019. The project includes two new production wells, three injector wells, and topsides water injection equipment.equipment at the St. Malo Field. First water
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injection is expected in 2023.2024. Additional Jack development in 2022 consisted of a single well tieback and related subsea infrastructure installation. The Stage 4 multiphase subsea pump project also reached a final investment decisionreplaces the single-phase subsea pumps in May 2019. The initial recognition of provedboth the Jack and St. Malo fields. Multiphase pump module installation commenced in 2022. Proved reserves occurred in 2019have been recognized for the multiphase subsea pump project. The Jack and St. Malo fields have an estimated remaining production life of 30more than 20 years.
The company has a 15.6 percent nonoperated working interest in the deepwater Mad Dog Field. In 2019, net daily production averaged 9,000 barrels of liquids and 1 million cubic feet of natural gas. Project execution continued in 2019 onFirst oil from the Mad Dog 2 Project. This phase of the plan is the development of the southwestern extension of the Mad Dog Field, including a new floating production platform with a design capacity of 140,000 barrels of crude oil per day. Drilling and fabrication are progressing as planned, and first oilProject is expected to commence in 2021.2023. Proved reserves have been recognized for the Mad Dog 2 Project.
Chevron has a 60 percent-owned and operated interest in the Big Foot Project,project, located in the deepwater Walker Ridge area. In 2019, net daily production averaged 11,000 barrels of crude oil and 2 million cubic feet of natural gas. Development drilling activities continuedare ongoing, with an additional production well that came online in 2019 with one well coming online and one additional well expected to come online by the end of 2020.2022. The project has an estimated remaining production life of 35more than 30 years.
Chevron holdshas a 25 percent nonoperated working interest in the Stampede Field, which is located in the Green Canyon area. In 2019, total daily production averaged 28,000 barrels of liquids (7,000 net) and 6 million cubic feet of natural gas (2 million net). The second and third injection wells were completed and brought online in 2019. Production ramp-up is expected to continue, with the completion of the final producing well expected in first-half 2020. The fieldStampede Field has an estimated remaining production life of 3025 years.
Chevron has owned and operated interests of 62.9 to 75.4 percent in the unit areas containing the Anchor Field.field. Stage 1 of the Anchor development consists of a seven-well subsea development and a semi-submersible floating production unit. A final investment decision was reachedThe company successfully drilled the first development well to a total measured depth of 33,500 feet in December 2019. The planned facility has a design capacity of 75,000 barrels of crude oil and 28 million cubic feet of natural gas per day. The initial recognition of proved2022. Proved reserves occurredhave been recognized for Anchor, with first production expected in 2019 for this project.2024.
Chevron has a 60 percent-owned and operated interest in the Ballymore Field located in the Mississippi Canyon, area andwhich is being developed as a subsea tieback to the existing Blind Faith facility. Chevron reached a final investment decision for Ballymore in May 2022. This project includes three production wells, with first oil expected in 2025. Proved reserves have been recognized for this project.
The company has a 40 percent nonoperated working interest in the Whale discovery located in the Perdido area. Two appraisal wells were completedFirst production is expected for Whale in 2019 at the Ballymore Field. At the Whale discovery, a second appraisal well was completed in April 2019. Front-end engineering design activities were initiated for this project in August 2019. At the end of 2019,2024 and proved reserves had nothave been recognized for these projects.this project.
During 2019 and early 2020,2022, the company participated in foursix exploration and three appraisal wells in the deepwater U.S. Gulf of Mexico. Chevron was also formally awarded 34 leases during 2022 as a result of U.S. Gulf of Mexico lease sale 257.
In April 2019,May 2022, Chevron acquired a significant crude oil discovery was announced50 percent interest in the Blacktip prospect where the company holds a 20 percent nonoperated working interest. In October 2019, an oil discovery was announcedBayou Bend Carbon Capture and Sequestration hub in the Esox prospect within the Mississippi Canyon block 726, where Chevron holds a 21.4 percent nonoperated working interest. The well is expected to be tied into the Tubular Bells production facility in first quarter 2020.Gulf of Mexico, covering over 40,000 acres.
Other Americas
“Other Americas” includes Argentina, Brazil, Canada, Colombia, Mexico, Suriname and Venezuela. Acreage for “Other Americas” can be found in the Acreage table. Net daily oil-equivalent production from these countries averaged 216,000 barrels during 2019.can be found in the Net Production of Crude Oil, Natural Gas Liquids and Natural Gas table.
Argentina Chevron has a 50 percent nonoperated interest in the Loma Campana and Narambuena concessions in the Vaca Muerta Shale. At Loma Compana, 49 horizontal wells were drilled in 2022, with 46 wells in total put on production. This concession expires in 2048, and the Narambuena concession expires in 2027.
Chevron also owns and operates a 100 percent interest in the El Trapial Field with both conventional waterflood and Vaca Muerta unconventional shale production. The conventional field concession expires in 2032.
In April 2022, Chevron was granted a new unconventional concession where it will operate the East area of the El Trapial Field in the Vaca Muerta shale formation, with a three-year pilot where it is expected to drill and complete five wells. Drilling operations began in August 2022 with three horizontal wells drilled in 2022. The unconventional concession expires in 2057.
Brazil Chevron holds between 30 and 50 percent of both operated and nonoperated interests in 11 blocks within the Campos and Santos Basins. Chevron is in the process of relinquishing the Saturno block in the Santos Basin, in which it holds a 45 percent nonoperated working interest. Chevron participated in two exploration wells in 2022.
Canada Upstream interests in Canada are concentrated in Alberta British Columbia and the offshore Atlantic region.region of Newfoundland and Labrador. The company also has discovered resource interests in the Northeast British Columbia and the Beaufort Sea region of the Northwest Territories. Net daily oil-equivalent production during 2019 averaged 135,000 barrels, composed of 66,000 barrels of liquids, 95 million cubic feet of natural gas and 53,000 barrels of synthetic oil from oil sands.
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The company holds a 29.6 percent nonoperated working interest in the heavy oil Hebron Field, also offshore Atlantic Canada. Total daily crude production continued to ramp up during the year, averaging 112,000 barrels (32,000 net) in 2019. The field has an expected economic life of 30 years.
into synthetic oil. Carbon dioxide (CO2) emissions from the upgrader are reduced by the Quest carbon capture and storage facilities. In 2019, net daily synthetic oil production averaged 53,000 barrels.
Chevron has a 26.9 percent nonoperated working interest in the Hibernia Field and a 24.1 percent nonoperated working interest in the unitized Hibernia Southern Extension areas offshore Atlantic Canada. The company has a 29.6 percent nonoperated working interest in the heavy oil Hebron Field, also offshore Atlantic Canada, which has an expected remaining economic life of condensate25years.
The company has a 25 percent nonoperated working interest in blocks EL 1168 and natural gas liquids and 79 million cubic feet of natural gas.EL 1148 located in offshore Atlantic Canada.
ColombiaChevron holdshas a 5040 percent-owned and operated interest in the Kitimat LNGoffshore Colombia-3 and Pacific Trail Pipeline projects andGuajira Offshore-3 Blocks.
Mexico The company has a 5037.5 percent-owned and operated interest in Block 22 in the Liard and Horn River shale gas basinsCuenca Salina area in British Columbia. In December 2019, the company wrote off its investments and announced plans to not move forward with the Kitimat LNG and Pacific Trail Pipeline projects.
Suriname Chevron has a 40 percent owned and operated working interest in early 2020.Block 5. Chevron also holds a 37.5 percent-owned and operated interest in Block 22 in the deepwater Cuenca Salina area of the Gulf of Mexico covering 267,000 net acres. In October 2019, Chevron farmed into a 40 percent nonoperated interest in Blocks 20, 21 and 23 in the Cuenca Salina area in the deepwater Gulf of Mexico. Drilling has commenced on the first of two wells planned in 2020. These three blocks cover approximately 589,000 net acres.
Venezuela Chevron holds nonoperatedChevron’s interests in affiliate companies in Venezuela. Chevron's production activities in Venezuela are located in western Venezuela, and the Orinoco Belt. Net daily oil-equivalentBelt and offshore Venezuela. As of December 31, 2022, no proved reserves are recognized for these interests. In 2022, the company conducted activities in Venezuela consistent with the authorization provided pursuant to general licenses issued by the United States government. In November 2022, the Department of Treasury’s Office of Foreign Assets Control issued a six-month self-renewing general license authorizing the company to lift production during 2019 averaged 35,000 barrels, composed of 34,000 barrels of crude oil and 7 million cubic feet of natural gas.from its four nonoperated affiliate joint ventures in Venezuela for delivery to the United States.
Chevron has a 39.2 percent interest in Petroboscan, which operates the Boscan Field in western Venezuela under an agreement expiring in 2026. Chevron has a 30 percent interest in the Petropiar, affiliate thatwhich operates the heavy oil Huyapari Field. The production and upgrading project is located in the Orinoco BeltField under an agreement expiring in 2033. Petropiar drilled 69 development wells in 2019. Chevron also holds a 39.2 percent interest in the Petroboscan affiliate that operates the Boscan Field in western Venezuela and a 25.2 percent interest in the Petroindependiente, affiliate thatwhich operates the LL-652 Field in Lake Maracaibo
Chevron also operates and holds a 60 percent interest in the Loran gas field offshore Venezuela. This is part of a cross- border field that includes the Manatee field in Trinidad and Tobago. This license expires in 2039.
Africa
In Africa, the company is engaged in upstream activities in Angola, Egypt, Nigeria and the Republic of Congo.Congo, Cameroon, Egypt, Equatorial Guinea, Namibia and Nigeria. Acreage for Africa can be found in the Acreage table. Net daily oil-equivalent production from these countries averaged 412,000 barrels during 2019.can be found in the Net Production of Crude Oil, Natural Gas Liquids and Natural Gas table.
Angola The company operates and holds a 39.2 percent interest in Block 0, a concession adjacent to the Cabinda coastline,coastline. The Block 0 partners and National Concessionaire signed an extension for an additional 20 years in December 2021. This extension to 2050 is subject to legislative approvals.
Chevron also operates and holds a 31 percent operated interest in a production-sharing contract (PSC)PSC for deepwater Block 14. The Block 0 concession extends through 2030. Development and production rights for the producing fields14 which expires in Block 14 expire beginning in 2023. The majority of the production is held in leases that expire between 2027 and 2031. During 2019, net daily production averaged 97,000 barrels of liquids and 324 million cubic feet of natural gas.
Chevron has a 36.4 percent interest in Angola LNG Limited, which operates an onshore natural gas liquefaction plant in Soyo, Angola. The plant has the capacity to process 1.1 billion cubic feet of natural gas per day. This is the world’s first LNGliquefied natural gas (LNG) plant supplied with associated gas, where the natural gas is a byproduct of crude oil production. Feedstock for the plant originates from multiple fields and operators. Total daily production
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The Block 0 Sanha Lean Gas Connection Project (SLGC) execution continues and is expected to be completed in 2019 averaged 746 million cubic feet2024. SLGC is a new platform that ties the existing complex to new connecting pipelines for gathering and exporting gas from Blocks 0 and 14 to Angola LNG.
In October 2022, first oil was announced for Lifua A in Block 0, which is the first stage of naturalwaterflood development in the Lifua field using a low-cost, short cycle solution that leverages existing infrastructure. In November 2022, South N’Dola, located in Area B of Block 0, reached final investment decision and will apply the same low-cost, short cycle solution as Lifua A.
In July 2022, a final investment decision was announced on the Quiluma and Maboqueiro (Q&M) development, part of the New Gas Consortium Project (NGC) in which Chevron has a 31 percent nonoperated working interest. NGC is an offshore gas (272 million net)concession in which the Q&M fields will be the first to be developed. The Q&M scope includes two wellhead platforms and 30,000 barrels of liquids (11,000 net).an onshore gas treatment plant with connections to the Angola LNG plant. Proved reserves have not been recognized for this project.
Angola-Republic of Congo Joint Development Area Chevron operates and holds a 31.3 percent interest in the Lianzi Unitization Zone, which is located in an area shared equally by Angola and the Republic of Congo. Production from Lianzi is reflectedThis interest expires in the totals for Angola and the Republic of Congo.2031.
Republic of Congo Chevron has a 31.5 percent nonoperated working interest in the offshore Haute Mer permit areas (Nkossa, Nsoko and Moho-Bilondo).area. The permits for Nkossa, Nsoko and Moho-Bilondo were extended in 2022 and now expire in 2027, 20342040. Reserves have been recognized for the lease extension.
Cameroon Chevron owns and 2030, respectively. Average net daily productionoperates the YoYo Block in 2019 was 49,000 barrels of liquids.the Douala Basin. Preliminary development plans include a possible joint development between YoYo and the Yolanda field in Equatorial Guinea.
Egypt In June 2019, the company relinquished its 20.4Mediterranean Sea, Chevron holds a 90 percent-owned and operated interest in North Sidi Barrani (Block 2) and North El Dabaa (Block 4) and a 45 percent interest in the Nargis block, as well as a 27 percent nonoperated working interest in both North Marina (Block 6) and North Cleopatra (Block 7). In 2022, the Haute Mer B permitcompany successfully drilled its first exploration well and announced a significant gas discovery at the Nargis Offshore area. The well encountered approximately 200 net feet of high-quality gas-bearing sandstone. In the Red Sea, the company holds a 45 percent-owned and operated interest in Block 1.
The company also holds a 32 percent nonoperated interest in the natural gas and condensate Alba field, a 28 percent nonoperated interest in the Alba LPG Plant and a 45 percent interest in the Atlantic Methanol Production Company.
Namibia In September 2022, Chevron acquired an 80 percent-owned and operated interest in PEL90 (Block 2813B) in the Orange Basin, offshore Namibia.
Nigeria Chevron operates and holds a 40 percent interest in eightsix concessions, five operated and one nonoperated in the onshore and near-offshore regions of the Niger Delta. In 2019, infill drilling programs continued in the Niger Delta. The company also holds acreage positions in three operated and six nonoperated deepwater blocks, with working interests ranging from 20 to 100 percent. The company’s net daily oil-equivalent production for 2019Chevron participated in Nigeria averaged 209,000 barrels, composed of 168,000 barrels of crude oil, 215 million cubic feet of natural gas and 5,000 barrels of LPG.one exploration well in 2022.
Chevron is the operator of the Escravos Gas Plant (EGP) with a total processing capacity of 680 million cubic feet per day of natural gas and LPGliquefied petroleum gas and condensate export capacity of 58,000 barrels per day. The company is also the operator ofoperates the 33,000-barrel-per-day Escravos Gas to Liquids facility. In addition, the company holds a 36.736.9 percent interest in the West African Gas Pipeline Company Limited affiliate, which supplies Nigerian natural gas to customers in Benin, GhanaTogo and Togo.Ghana.
Chevron operates and holds a 67.3 percent interest in the Agbami Field,field, located in deepwater Oil Mining Lease (OML) 127 and OML 128. Infill drilling continuedOML127 expires in 20192024 and OML128 was extended in 2022 from 2024 to offset field decline. 2042. Additionally, Chevron holds a 30 percent nonoperated working interest in the Usan Fieldfield in OML 138. The leaseslease that containcontains the Usan field was extended in 2022 from 2023 to 2042. Reserves have been recognized for the extensions of OML 128 and Agbami Fields expireOML 138.
In deepwater exploration, Chevron operates and holds a 55 percent interest, in 2023the deepwater Nsiko discoveries in OML 140. Chevron also holds a 27 percent interest in OML 139 and 2024, respectively.OML 154 and the company continues to work with the
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operator to evaluate development options for the multiple discoveries in the Usan area, including the Owowo field, which straddles OML 139 and OML 154. The development plan for the Owowo field involves a subsea tie-back to the existing Usan floating, production, storage, and offloading vessel.
Also, in the deepwater area, the Aparo Fieldfield in OML 132 and OML 140 and the third-party-owned OML 118 Bonga SW Fieldfield in OML 118 share a common geologic structure and are planned to would be developed jointly. Chevron holds a 16.6 percent nonoperated working interest in the unitized area. The development plan involves subsea wells tied back to a floating production, storage and offloading vessel. Work continues to progress towards a final investment decision. At the end of 2019,2022, no proved reserves were recognized for this project.
In deepwater exploration,May 2022, Chevron operates and holds a 55 percent interest in the deepwater Nsiko discoveries in OML 140. Chevron also holds a 30 percent nonoperated working interest in OML 138, which includes the Usan Field and several satellite discoveries, and a 27 percent interest in adjacent licenses OML 139 and OML 154. The company plans to continue evaluating development options for the multiple discoveries in the Usan area, including the Owowo Field, which straddles OML 139 and OML 154.
Asia
In Asia, the company is engaged in upstream activities in Azerbaijan, Bangladesh, China, Cyprus, Indonesia, Israel, Kazakhstan, the Kurdistan Region of Iraq, Myanmar, the Partitioned Zone located between Saudi Arabia and Kuwait, the Philippines, Russia, and Thailand. During 2019, netAcreage for Asia can be found in the Acreage table. Net daily oil-equivalent production averaged 979,000 barrelsfor these countries can be found in this region.the Net Production of Crude Oil, Natural Gas Liquids and Natural Gas table.
China Chevron has nonoperated working interests in several areas in China. The company has a 49 percent nonoperated working interest in Azerbaijan International Operating Companythe Chuandongbei project, including the Loujiazhai and its 8.9Gunziping natural gas fields located onshore in the Sichuan Basin. The company also has nonoperated working interests of 32.7 percent in Block 16/19 in the Pearl River Mouth Basin and 24.5 percent in the Qinhuangdao (QHD) 32-6 Block in the Bohai Bay. The PSCs for Block 16/19 and QHD 32-6 expire in 2028 and 2024, respectively.
Cyprus The company holds a 35 percent-owned and operated interest in the Aphrodite gas field in Block 12. Chevron operates the field with the government of Cyprus and has a license that expires in 2044.
Indonesia Chevron has working interests through various PSCs in Indonesia. In offshore eastern Kalimantan, the company operates and holds a 62 percent interest in two PSCs in the Kutei Basin (Rapak and Ganal) and operates and holds a 72 percent interest in the Baku-Tbilisi-Ceyhan (BTC) pipeline affiliate.Makassar Strait (West Seno field) temporary cooperation contract. The salecontracts for offshore eastern Kalimantan expire in December 2027 (Rapak and West Seno fields) and February 2028 (Ganal).
Chevron has concluded that the Indonesia Deepwater Development (IDD) Project held by the Kutei Basin PSCs does not compete in its portfolio and is expectedevaluating alternatives for the company’s participating interest in these PSCs.
Israel Chevron holds a 39.7 percent-owned and operated interest in the Leviathan field, which operates under a concession that expires in 2044. The company also holds a 25 percent-owned and operated interest in the Tamar gas field, which operates under a concession that expires in 2038. In 2022, Chevron reached final investment decision for Phase 1 of the Tamar Optimization Project to close in first-half 2020. Net daily oil-equivalent production in 2019 averaged 20,000 barrels, composed of 18,000 barrels of crude oilexpand the company’s offshore facilities. Opportunities to further monetize the existing gas resources are being assessed for both the Tamar and 10 million cubic feet of natural gas.Leviathan fields.
Kazakhstan Chevron has a 50 percent interest in the Tengizchevroil (TCO) affiliate and an 18 percent nonoperated working interest in the Karachaganak Field. Net daily oil-equivalent production in 2019 averaged 430,000 barrels, composed of 339,000 barrels of liquids and 548 million cubic feet of natural gas.field.
TCO is developing the Tengiz and Korolev crude oil fields in western Kazakhstan under a concession agreement that expires in 2033. Net daily production in 2019 from these fields averaged 290,000 barrels of crude oil, 419 million cubic feet of natural gas and 21,000 barrels of NGLs. AllMost of TCO’s 20192022 crude oil production was exported through the Caspian Pipeline Consortium (CPC) pipeline.
The Karachaganak Fieldfield is located in northwest Kazakhstan, and operations are conducted under a PSC that expires in 2038. During 2019, net daily production averaged 28,000 barrels of liquids and 129 million cubic feet of natural gas. Most of the exported liquids were transported through the CPC pipeline during 2019. Work continues2022. Development continued on the
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Karachaganak Expansion project (KEP) Stage 1A and a final investment decision was reached to identify the optimal scope for the future expansion of the field. At the end of 2019, provedcommence KEP Stage 1B in late 2022. Proved reserves had nothave been recognized for future expansion.both projects.
Kazakhstan/Russia Chevron has a 15 percent interest in the CPC. In May 2019, CPC shareholders announced a final investment decisionProgress continued on athe debottlenecking project, which is expected to further increase capacity. During 2019,2022, CPC transported an average of 1.41.2 million barrels of crude oil per day, composed of 1.21.1 million barrels per day from Kazakhstan and 160,0000.1 million barrels per day from Russia.
Myanmar ChevronChevron has a 28.341.1 percent nonoperated working interest in a PSC for the production of natural gas from the Yadana, Badamyar and Sein fields, within Blocks M5 and M6, in the Andaman Sea. The PSC expires in 2028. The company also has a 28.341.1 percent nonoperated working interest in a pipeline company that transports natural gas to the Myanmar-Thailand border for delivery to power plants in Thailand. Net daily natural gas production in 2019 averaged 93 million cubic feet.
In October 2019,2022, Chevron transferred operatorship of the Chuandongbei Project and now has a 49 percent nonoperated working interest in the project, including the Loujiazhai and Gunziping natural gas fields located onshore in the Sichuan Basin.
Partitioned Zone Chevron holds a concession to operate the Kingdom of Saudi Arabia’s 50 percent interest in the hydrocarbon resources in the onshore area of the Partitioned Zone between Saudi Arabia and Kuwait. The concession expires in 2039. Production has been shut in since May 2015 as result of difficulties securing work2046. Current activities focus on base business optimization and equipment permits and a dispute between Saudi Arabia and Kuwait. In December 2019, the governments of Saudi Arabia and Kuwait signed a memorandum of understanding to resolve the dispute and allow production to restartenhancement opportunities.
Thailand Chevron holds operated interests in the Partitioned Zone. In mid-February 2020, pre-startup activities commenced. The company expects productionPattani Basin, located in the Gulf of Thailand, with ownership ranging from 35 percent to ramp up to pre-shut-in levels71.2 percent. Concessions for producing areas within one to two years.
Within the Pattani Basin, the company previously held operated interests ranging from 70 to 80 percent of the Shetland Islands. The Clair Ridge ProjectErawan concession, which expired in April 2022.
Chevron holds between 30 to 80 percent operated and nonoperated working interests in the Thailand-Cambodia Overlapping Claims Area that are inactive, pending resolution of border issues between Thailand and Cambodia.
Australia
Chevron is the second development phase of the Clair Field, with a design capacity of 120,000 barrels of crude oil and
can be found in the AustraliaNet Production of Crude Oil, Natural Gas Liquids and Natural Gas table.
Upstream activities in Australia are concentrated offshore Western Australia, where the company is the operator of two major LNG projects, Gorgon and Wheatstone, and has a nonoperated working interest in the North West Shelf (NWS) Venture and exploration acreage in the Carnarvon Basin and Browse Basin. During 2019, the company's net daily production averaged 45,000 barrels of liquids and 2.5 billion cubic feet of natural gas.
Chevron holds a 47.3 percent-owned and operated interest in the Gorgon Project,on Barrow Island, which includes the development of the Gorgon and Jansz-Io fields. The project includesfields, a three-train 15.6 million-metric-ton-per-year LNG facility, a carbon dioxide sequestrationcapture and underground storage facility which achieved start-up in August 2019. The company commenced drilling 11 new wells for Gorgon Stage 2 during 2019.and a domestic gas plant. The Gorgon Stage 2 project is expected to be completedready for startup in 2022. Total daily production in 2019 averaged 16,000 barrelsthe first quarter of condensate (8,000 barrels net)2023. Progress on the Jansz-Io Compression project continued during 2022, and 2.3 billion cubic feet of natural gas (1.1 billion net). The project'sproved reserves have been recognized for this project. Gorgon’s estimated remaining economic life exceeds 40 years.
Chevron holds an 80.2 percent interest in the offshore licenses and a 64.1 percent-owned and operated interest in the LNG facilities associated with theWheatstone. Wheatstone Project. The project includes the development of the Wheatstone and Iago fields, a two-train, 8.9 million-metric-ton-per-year LNG facility, and a domestic gas plant. The onshore facilities are located at Ashburton North on the coast of Western Australia. The total production capacity for the Wheatstone and Iago fields and nearby third-party fields is expected to be approximately 1.6 billion cubic feet of natural gas and 30,000 barrels of condensate per day. Total daily production averaged 22,000 barrels of condensate (18,000 net) and 1.2 billion cubic feet of natural gas (943 million net) in 2019. The project’sWheatstone’s estimated remaining economic life exceeds 3018 years.
Chevron has a 16.7 percent nonoperated working interest in the NWSNorth West Shelf (NWS) Venture in Western Australia.
Chevron has a 100 percent-ownedowns and operated interest inoperates the Clio, Acme and Acme West fields. The company is collaborating with other Carnarvon Basin participants to assess the opportunitypossibility of developing Clio and Acme being developed through shared utilization of existing infrastructure.
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Chevron holdsIn September 2019, Chevron relinquished itsnonoperated working interests ranging from 20 to 50 percent, operatedin three greenhouse gas assessment permits to evaluate the potential of carbon storage. The blocks, including two in the Carnarvon Basin off the north-western coast of Western Australia and one in the Bonaparte Basin offshore Northern Territory, total nearly 7.8 million acres.
United Kingdom
Acreage can be found in the Acreage table. Net oil equivalent production for the United Kingdom can be found in the Net Production of Crude Oil, Natural Gas Liquids and Natural Gas table.
Chevron holds a 19.4 percent nonoperated working interest in three deepwater exploration permits in the offshore PegasusClair field, located west of the Shetland Islands. The Clair Ridge project is the second development phase of the Clair field, with a design capacity of 120,000 barrels of crude oil and East Coast basins.100 million cubic feet of natural gas per day. The Clair field has an estimated remaining production life extending beyond 2050.
Sales of Natural Gas Liquids and Natural Gas Liquids
The company sells natural gasNGLs and natural gas liquids (NGLs) from its producing operations under a variety of contractual arrangements. In addition, the company also makes third-party purchases and sales of NGLs and natural gas and NGLs in connection with its supply and trading activities.
U.S. and international sales of NGLs averaged 303,000 and 234,000 barrels per day, respectively, in 2022.
During 2019,2022, U.S. and international sales of natural gas averaged 4.04.4 billion and 5.95.8 billion cubic feet per day, respectively, which includes the company’s share of equity affiliates’ sales. Outside the United States, substantially all of the natural gas sales from the company’s producing interests are from operations in Angola, Argentina, Australia, Bangladesh, Canada, Colombia,Equatorial Guinea, Kazakhstan, Indonesia, Myanmar,Israel, Nigeria the Philippines, Thailand and the United Kingdom.Thailand.
Refer to “SelectedSelected Operating Data” on page 37 in Management’s Discussion and Analysis of Financial Condition and Results of Operations, for further information on the company’s sales volumes of natural gas liquids and natural gas liquids.gas. Refer also to
Downstream
Refining Operations
At the end of 2019,2022, the company had a refining network capable of processing 1.7processing 1.8 million barrels of crude oil per day. Operable capacity at December 31, 2019,2022, and daily refinery inputs for 20172020 through 20192022 for the company and affiliate refineries, are summarized in the table below.
Average crude oil distillation capacity utilization was 9085 percent in 20192022 and 9382 percent in 2018. 2021.
At the U.S. refineries, crude oil distillation capacity utilization averaged 9182 percent in 2019,2022, compared with 9783 percent in 2018.2021. Chevron processes both imported and domestic crude oil in its U.S. refining operations. Imported crude oil accounted for about 65 percent and 7060 percent of Chevron’s U.S. refinery inputs in 2019both 2022 and 2018, respectively.2021.
In the United States, the company continued work on projects to improveaimed at improving refinery flexibility and reliability. At the Richmond Refinery in California, production on the new hydrogen plant reached full operational capacity in January 2019. At the refinery in Salt Lake City, Utah, construction continued on the alkylation retrofit project with more than 100 modules installed. Project start-up is expected in first-half 2021.
Outside the United States, the company has interests in three large refineries in Singapore, South Korea Singapore and Thailand. The Singapore Refining Company (SRC), a 50 percent-owned joint venture, has a total capacity of 290,000 barrels of crude per day and manufactures a wide range of petroleum products. Recent upgrades have enabled SRC to produceproducts, including higher-quality gasoline that meets stricter emission standards. The 50 percent-owned GS Caltex (GSC) operated, Yeosu Refinery in South Korea remains one of the world’s largest refineries with a total crude capacity of 800,000 barrels per day. In February 2019, a final investment decision was reached on the olefins mixed-feed cracker and associated polyethylene unit with first production planned for 2021. The company’s 60.6 percent-owned refinery in Map Ta Phut, Thailand, continues to supply high-quality petroleum products through the Caltex brand into regional markets.
| Petroleum Refineries: Locations, Capacities and Inputs | ||||||||||||
| Capacities and inputs in thousands of barrels per day | December 31, 2019 | Refinery Inputs | ||||||||||
| Locations | Number | Operable Capacity | 2019 | 2018 | 2017 | |||||||
| Pascagoula | Mississippi | 1 | 350 | 358 | 332 | 349 | ||||||
| El Segundo | California | 1 | 276 | 241 | 273 | 251 | ||||||
| Richmond | California | 1 | 257 | 236 | 249 | 248 | ||||||
Pasadena1 | Texas | 1 | 106 | 58 | — | — | ||||||
| Salt Lake City | Utah | 1 | 55 | 54 | 51 | 53 | ||||||
| Total Consolidated Companies — United States | 5 | 1,044 | 947 | 905 | 901 | |||||||
| Map Ta Phut | Thailand | 1 | 166 | 134 | 160 | 152 | ||||||
Cape Town2 | South Africa | — | — | — | 49 | 68 | ||||||
Burnaby, B.C.3 | Canada | — | — | — | — | 40 | ||||||
| Total Consolidated Companies — International | 1 | 166 | 134 | 209 | 260 | |||||||
| Affiliates | Various Locations | 3 | 538 | 483 | 494 | 500 | ||||||
| Total Including Affiliates — International | 4 | 704 | 617 | 703 | 760 | |||||||
| Total Including Affiliates — Worldwide | 9 | 1,748 | 1,564 | 1,608 | 1,661 | |||||||
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| Petroleum Refineries: Locations, Capacities and Crude Oil Inputs | |||||||||||||||||||||||
| Capacities and inputs in thousands of barrels per day | December 31, 2022 | Refinery Crude Oil Inputs | |||||||||||||||||||||
| Locations | Number | Operable Capacity | 2022 | 2021 | 2020 | ||||||||||||||||||
| Pascagoula | Mississippi | 1 | 369 | 320 | 333 | 305 | |||||||||||||||||
| El Segundo | California | 1 | 290 | 248 | 233 | 176 | |||||||||||||||||
| Richmond | California | 1 | 257 | 167 | 211 | 198 | |||||||||||||||||
| Pasadena | Texas | 1 | 85 | 77 | 76 | 69 | |||||||||||||||||
| Salt Lake City | Utah | 1 | 58 | 53 | 50 | 45 | |||||||||||||||||
| Total Consolidated Companies — United States | 5 | 1,059 | 865 | 903 | 793 | ||||||||||||||||||
| Map Ta Phut | Thailand | 1 | 175 | 156 | 135 | 143 | |||||||||||||||||
| Total Consolidated Companies — International | 1 | 175 | 156 | 135 | 143 | ||||||||||||||||||
| Affiliates | Various Locations1 | 2 | 545 | 483 | 441 | 441 | |||||||||||||||||
| Total Including Affiliates — International | 3 | 720 | 639 | 576 | 584 | ||||||||||||||||||
| Total Including Affiliates — Worldwide | 8 | 1,779 | 1,504 | 1,479 | 1,377 | ||||||||||||||||||
1 In March 2020, the company sold its interest in the Pakistan refinery.
Marketing Operations
The company markets petroleum products under the principal brands of “Chevron,” “Texaco” and “Caltex” throughout many parts of the world. The following table identifies the company’s and its affiliates’ refined products sales volumes, excluding intercompany sales, for the three years ended December 31, 2019.2022.
| Refined Products Sales Volumes | Refined Products Sales Volumes | Refined Products Sales Volumes | |||||||||||||||||||
| Thousands of barrels per day | 2019 | 2018 | 2017 | Thousands of barrels per day | 2022 | 2021 | 2020 | ||||||||||||||
| United States | United States | ||||||||||||||||||||
| Gasoline | 667 | 627 | 625 | Gasoline | 639 | 655 | 581 | ||||||||||||||
| Jet Fuel | 256 | 255 | 242 | Jet Fuel | 212 | 173 | 139 | ||||||||||||||
| Diesel/Gas Oil | 191 | 188 | 179 | Diesel/Gas Oil | 216 | 179 | 167 | ||||||||||||||
| Residual Fuel Oil | 42 | 48 | 48 | ||||||||||||||||||
| Fuel Oil | Fuel Oil | 56 | 39 | 33 | |||||||||||||||||
Other Petroleum Products1 | 94 | 100 | 103 | Other Petroleum Products1 | 105 | 93 | 83 | ||||||||||||||
| Total United States | 1,250 | 1,218 | 1,197 | Total United States | 1,228 | 1,139 | 1,003 | ||||||||||||||
International2 | International2 | ||||||||||||||||||||
| Gasoline | 289 | 336 | 365 | Gasoline | 336 | 321 | 264 | ||||||||||||||
| Jet Fuel | 238 | 276 | 274 | Jet Fuel | 196 | 140 | 143 | ||||||||||||||
| Diesel/Gas Oil | 427 | 446 | 490 | Diesel/Gas Oil | 464 | 471 | 438 | ||||||||||||||
| Residual Fuel Oil | 167 | 177 | 162 | ||||||||||||||||||
| Fuel Oil | Fuel Oil | 168 | 177 | 184 | |||||||||||||||||
Other Petroleum Products1 | 206 | 202 | 202 | Other Petroleum Products1 | 222 | 206 | 192 | ||||||||||||||
| Total International | 1,327 | 1,437 | 1,493 | Total International | 1,386 | 1,315 | 1,221 | ||||||||||||||
Total Worldwide2 | 2,577 | 2,655 | 2,690 | Total Worldwide2 | 2,614 | 2,454 | 2,224 | ||||||||||||||
1 Principally naphtha, lubricants, asphalt and coke. | |||||||||||||||||||||
1 Principally naphtha, lubricants, asphalt, and coke. | 1 Principally naphtha, lubricants, asphalt, and coke. | ||||||||||||||||||||
2 Includes share of affiliates’ sales: | 379 | 373 | 366 | 2 Includes share of affiliates’ sales: | 389 | 357 | 348 | ||||||||||||||
In the United States, the company markets under the Chevron and Texaco brands. At year-end 2019,2022, the company supplied directly or through retailers and marketers to approximately 7,900 8,200 Chevron- and Texaco- brandedTexaco-branded service stations, primarily in the southern and western states. Approximately 310 of these outlets are company-owned or -leased stations.
Outside the United States, Chevron supplied directly or through retailers and marketers approximately 5,1005,600 branded service stations, including affiliates. The company markets in Latin America using the Texaco brand. In 2019, Chevron continued to grow, expanding to nearly 200 branded stations in northwestern Mexico at the end of the year. The company also operates through affiliates under various brand names. In the Asia-Pacific region and the Middle East, the company uses the Caltex brand. In South Korea, the company operates through its 50 percent-owned affiliate, GSC.
In December 2019,Australia, Chevron markets primarily under the company signed an agreementPuma brand and began a rebranding project to acquire a network of terminals andtransition to the Caltex brand in 2022. In March 2022, Chevron started allowing customers at Caltex service stations in Australia, which is expectedSingapore to close in second-half 2020, pending regulatory approval.use their loyalty points to offset a portion of the greenhouse gas emissions from the combustion of the fuel purchased. In return, Chevron purchases and retires carbon offsets.
Chevron markets commercial aviation fuel at approximately 70to 63 airports worldwide. The company also markets an extensive line of lubricant and coolant products under the product names Havoline, Delo, Ursa, Meropa, Rando, Clarity and Taro in the United States and worldwide under thethese three brands: Chevron,Chevron, Texaco and Caltex.
Chemicals Operations
Chevron Oronite Company develops, manufactures and markets performance additives for lubricating oils and fuels and conducts research and development for additive component and blended packages. At the end of 2019,2022, the company manufactured, blended or conducted research at 1011 locations around the world. Construction progressed in 2019 on a lubricant additive blending and shipping plant in Ningbo, China. Commercial production is anticipated to begin in 2021.
Chevron owns a 50 percent interest in its Chevron Phillips Chemical Company LLC (CPChem) affiliate.. CPChem produces olefins, polyolefins and alpha olefins and is a supplier of aromatics and polyethylene pipe, in addition to participating in the specialty chemical and specialty plastics markets. At the end of 2019,2022, CPChem owned or had joint-venture interests in 28 manufacturing facilities and two research and development centers around the world.
CPChem has recently reached final investment decision on two major integrated polymer projects. In 2019,fourth quarter 2022, final investment decision was made on the Golden Triangle Polymers Project in Orange, Texas, for which CPChem announced agreementsholds a 51 percent owned and operated interest. In January 2023, final investment decision was made on the Ras Laffan Petrochemical Project in Ras Laffan, Qatar for which CPChem holds a 30 percent nonoperated working interest. Startup for both projects is targeted for late 2026.
In second quarter 2022 CPChem reached final investment decision on a Low Viscosity Poly Alpha Olefin Expansion Project at the CPChem Beringen, Belgium site, with a targeted startup in third quarter 2024. CPChem also continued to jointly develop petrochemical complexesprogress several other major projects at existing facilities in Qatar and the U.S. Gulf Coast. EngineeringCoast region, including: an Ethylene Plant Debottleneck Project in Cedar Bayou, Texas, a C3 Splitter Project in Cedar Bayou, Texas, and design for these projects is underway.a 1-Hexene plant in Old Ocean, Texas, all of which are targeted to startup in late 2023.
Chevron is also maintains a roleinvolved in the petrochemical business through the operations of GSC, the company’s 50 percent-owned affiliate.percent owned affiliate in South Korea. GSC manufactures aromatics, including benzene, toluene and xylene. These base chemicals are used to produce a range of products, including adhesives, plastics and textile fibers. GSC also produces olefins such as ethylene, polyethylene and polypropylene, which isare used to make automotive and home appliance parts, food packaging, laboratory equipment, building materials, adhesives, paint and textiles.
The company continued to advance activities with its joint venture partners, Brightmark Fund Holdings LLC (Brightmark) and California Bioenergy, LLC. (CalBio), to produce and market dairy biomethane. In January 2022, Chevron’s joint venture with Brightmark announced plans to construct an anaerobic digestion project in February 2019California and in August 2022 it achieved first gas from the Athena Project in South Dakota. In October 2022, the company expanded its partnership with CalBio to build an olefins mixed-feed crackeradditional infrastructure for dairy biomethane projects in California. In December 2022, Chevron acquired full ownership of Beyond6, LLC and polyethylene unit within the existing refining and aromaticsits nationwide network of 55 compressed natural gas (CNG) stations to grow its renewable natural gas value chain.
In May 2022, Chevron formed a joint venture, Bunge Chevron Ag Renewables LLC, in which it holds a 50 percent working interest. The venture produces soybean oil from processing facilities in Yeosu, South Korea.Destrehan, Louisiana, and Cairo, Illinois. Soybean oil can be used as a renewable feedstock to make renewable diesel, biodiesel, and sustainable aviation fuel.
In June 2022, Chevron completed the acquisition of the Renewable Energy Group, Inc. (REG), which has 11 biofuel refineries located in the U.S. and Germany, 10 biofuel refineries producing biodiesel and one producing renewable diesel. Work commenced in August 2022 at the Emden refinery in Germany that is expected to reduce the carbon intensity of the biofuel produced at the facility. Expansion work at the Geismar renewable diesel plant in Louisiana continues to be on track, with full capacity expected in 2024.
Progress continues at the company’s El Segundo Refinery in California to increase its capacity to produce renewable fuels through fluid catalytic cracking unit co-processing of bio-feedstock and conversion of the diesel hydrotreater.
Chevron developed renewable base oil through our patented technology and partnership with Novvi and integrated this renewable base oil into Chevron’s lubricant product lines. Chevron developed Havoline© PRO-RS™, which has lifecycle emissions that are 35 percent lower than those of conventional motor oil of equal viscosity. During 2022, the company made this renewable based lubricant available to U.S. consumers.
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In April 2022, Chevron completed the purchase of the NEXBASE brand, associated qualifications and approvals, and related sales and marketing business from Neste Oyj. As part of the acquisition, Chevron maintains all current supply sources utilizing long-term offtake agreements. This addition of a fully approved global slate of Group III and renewable base oils complements Chevron’s Group II global slate.
Transportation
Pipelines Chevron owns and operates a network of crude oil, natural gas and product pipelines and other infrastructure assets in the United States. In addition, Chevron operates pipelines for its 50 percent-owned CPChem affiliate. The company also has direct and indirect interests in other U.S. and international pipelines.
Refer to pages 11 through 13Nigeria and Kazakhstan/Russia in the Upstream section for information on the West African Gas Pipeline the Baku-Tbilisi- Ceyhan Pipeline, and the Caspian Pipeline Consortium.
Shipping The company’s marine fleet includes both U.S. and foreign flagged vessels. The operated fleet consists of conventional crude tankers, product carriers and LNG carriers. These vessels transport crude oil, LNG, refined products and feedstock in support of the company’s global upstream and downstream businesses. In April 2022, Chevron joined the Global Centre for Maritime Decarbonisation (GCMD) as a strategic partner to the organization. The Singapore-based nonprofit was launched in August 2021 to help the International Maritime Organization meet its greenhouse gas emissions reduction goals for 2030 and 2050 by supporting cross-industry collaboration.
Other Businesses
The organization supports upstream and downstream businesses. The company conducts research, develops and qualifies technology, and provides technical services and competency development. The disciplines coverAreas of expertise include earth sciences, reservoir and production engineering, facilities engineering, reserve governance and reporting, capital projects, drilling and completions, facilities engineering, manufacturing, processasset performance, health, safety and environment, information technology, catalysis, technical computingtechnology ventures, and health, environmentdownstream technology and safety.services.
Chevron’s information technology organization integrates computing, telecommunications, data management, cybersecurity and network technology to provide a digital infrastructure to enable Chevron’s global operations and business processes.
The Chevron Technology Ventures (CTV) unit identifies and invests in externally developed technologies and new business solutions with the potential to enhance the way Chevron produces and delivers affordable, reliable, and ever-cleaner energy. CTV has more than two decades of being the on-ramp for external innovation into Chevron, including venture investing, with eight funds that have supported more than 120 startups and worked with more than 250 co-investors.
In 2019,addition to the company’s own managed funds, Chevron continued its involvement inalso makes investments indirectly through the following funds: the Oil and Gas Climate Initiative (OGCI), a global collaboration focused on Climate Investments’ Catalyst Fund I, which targets decarbonization within the industry’s efforts to take actions to accelerate and participate in the energy transition. OGCI members seek to lower carbon footprints of energy, industry, and transportation value chains. This includes work to reduce methane emissions, reduce the carbon intensity of upstream oil and gas, emissions,industrial, built environments and facilitate large-scale commercial investmenttransportation sectors; Emerald funds, one of which targets energy, water, food, mobility, industrial IT and advanced materials and another that focuses on sustainable packaging; Carbon Direct Capital, a growth equity investor in carbon capture, usemanagement technologies; and storage. OGCI Climate Investments is a $1 billion-plus investment fund set up by the OGCI memberHX Venture Fund that targets Houston, Texas high-growth start-up companies. OGCI Climate Investments focuses on three objectives: reducing methane emissions during the production, delivery and usage of oil and gas; reducing carbon dioxide emissions by increasing energy efficiency in power, industry and transport; and recycling and storing carbon dioxide produced during power generation or industrial processes by using it in products or storing it. As a member of OGCI, Chevron has committed to contribute $100 million to this fund.
Some of the investments the company makes in the areas described above are in new or unproven technologies and business processes, andprocesses; therefore, the ultimate technical or commercial successes of these investments are not certain. Refer to Note 25 on page 8927 Other Financial Information for a summaryquantification of the company’s research and development expenses.
Chevron New EnergiesThe new energies organization is designed to advance the company’s strategy by bringing together dedicated resources focused on developing new lower carbon businesses that have the potential to scale. Its initial focus includes commercialization opportunities in hydrogen, carbon capture and storage, carbon offsets and emerging technologies such as geothermal. These businesses are expected to support the company’s efforts to reduce its greenhouse gas emissions and are also expected to become high-growth opportunities with the potential to generate competitive returns.
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Environmental Protection The company designs, operates and maintains its facilities to avoid potential spills or leaks and to minimize the impact of those that may occur. Chevron requires its facilities and operations to have operating standards and processes and emergency response plans that address significant risks identified through site-specific risk and impact assessments. Chevron also requires that sufficient resources be available to execute these plans. In the unlikely event that a major spill or leak occurs, Chevron also maintains a Worldwide Emergency Response Team comprised of employees who are trained in various aspects of emergency response, including post-incident remediation.
To complement the company’s capabilities, Chevron maintains active membership in international oil spill response cooperatives, including the Marine Spill Response Corporation, which operates in U.S. territorial waters, and Oil Spill Response, Ltd., which operates globally. The company is a founding member of the Marine Well Containment Company, whose primary mission is to expediently deploy containment equipment and systems to capture and contain crude oil in the unlikely event of a future loss of control of a deepwater well in the Gulf of Mexico. In addition, the company is a member of
the Subsea Well Response Project, which has the objective to further develop the industry’s capability to contain and shut in subsea well control incidents in different regions of the world.
The company is committedaims to improving energy efficiency inlower the carbon intensity of its day-to-daytraditional oil and gas operations and is required to comply with the greenhouse gas-related laws and regulations to which it is subject. Refer to Item 1A. Risk Factors on pages 1820 through 2126 for further discussion of greenhouse gas regulation and climate change and the associated risks to Chevron’s business.
Refer to Management’sManagement Discussion and Analysis of Financial ConditionConditions and Results of Operations Business Environment and Outlook on pages 32 through 34 for further discussion of climate change related trends and uncertainties.
Refer to Management's Discussion and Analysis of Financial Conditions and Results of Operationson page 4451 for additional information on environmental matters and their impact on Chevron, and on the company’s 20192022 environmental expenditures. Refer to page 4451 and Note 224 Other Contingencies and Commitments2 beginning on page 87 for a discussion of environmental remediation provisions and year-end reserves.
Item 1A. Risk Factors
BUSINESS AND OPERATIONAL RISK FACTORS
Chevron is exposed to the effects of changing commodity prices Chevron is primarily in a commodities business that has a history of price volatility. The single largest variablemost significant factor that affects the company’s results of operations is the price of crude oil, which can be influenced by general economic conditions and level of economic growth, including low or negative growth; industry production and inventory levels,levels; technology advancements, including those in pursuit of a lower carbon economy; production quotas or other actions that might be imposed by the Organization of Petroleum Exporting Countries (OPEC) or other producers,producers; weather-related damage and disruptions due to other natural or human causes beyond our control (including without limitation due to the COVID-19 pandemic); competing fuel prices,prices; geopolitical risks; the pace of energy transition; customer and geopolitical risks.consumer preferences and the use of substitutes; and governmental regulations, policies and other actions regarding the development of oil and gas reserves, as well as greenhouse gas emissions and climate change. Chevron evaluates the risk of changing commodity prices as a core part of its business planning process. An investment in the company carries significant exposure to fluctuations in global crude oil prices.
Extended periods of low prices for crude oil can have a material adverse impact on the company’s results of operations, financial condition and liquidity. Among other things, the company’s upstream earnings, cash flows, and capital and exploratory expenditure programs could be negatively affected, as could its production and proved reserves. Upstream assets may also become impaired. Downstream earnings could be negatively affected because they depend upon the supply and demand for refined products and the associated margins on refined product sales. A significant or sustained decline in liquidity could adversely affect the company’s credit ratings, potentially increase financing costs and reduce access to capital markets. The company may be unable to realize anticipated cost savings, expenditure reductions and asset sales that are intended to compensate for such downturns.downturns, and such downturns may also slow the pace and scale at which we are able to invest in new business lines such as the lower carbon businesses associated with our Chevron New Energies organization. In some cases, liabilities associated with divested assets may return to the company when an acquirer of those assets subsequently declares bankruptcy. In addition, extended periods of low commodity prices can have a material adverse impact on the results of operations, financial condition and liquidity of the company’s suppliers, vendors, partners and equity affiliates upon which the company’s own results of operations and financial condition depends.
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The scope of Chevron’s business will decline if the company does not successfully develop resources The company is in an extractive business; therefore, if it is not successful in replacing the crude oil and natural gas it produces with good prospects for future organic opportunities or through acquisitions, the company’s business will decline. Creating and maintaining an inventory of projects depends on many factors, including obtaining and renewing rights to explore, develop and produce hydrocarbons; drilling success; reservoir optimization; ability to bring long-lead-time, capital-intensive projects to completion on budget and on schedule; partner alignment, including strategic support; and efficient and profitable operation of mature properties.
The company’s operations could be disrupted by natural or human causes beyond its control Chevron operates in both urban areas and remote and sometimes inhospitable regions. The company’s operations are therefore subject to disruption from natural or human causes beyond its control, including physical risks from hurricanes, severe storms, floods, andheat waves, other forms of severe weather, wildfires, ambient temperature increases, sea level rise, war or other military conflicts such as the ongoing conflict in Ukraine, accidents, civil unrest, political events, fires, earthquakes, system failures, cyber threats, terrorist acts and epidemic or pandemic diseases such as the coronavirus,COVID-19 pandemic, some of which may be impacted by climate change and any of which could result in suspension of operations or harm to people or the natural environment.
Chevron’s risk management systems are designed to assess potential physical and other risks to its operations and assets and to plan for their resiliency. While capital investment reviews and decisions incorporate potential ranges of physical risks such as storm severity and frequency, sea level rise, air and water temperature, precipitation, fresh water access, wind speed, and earthquake severity, among other factors, it is difficult to predict with certainty the timing, frequency or severity of such events, any of which could have a material adverse effect on the company's results of operations or financial condition.
Impacts of the continuation or further resurgences of the COVID-19 pandemic may have an adverse and potentially material adverse effect on Chevron’s financial and operating results The economic, business, and oil and gas industry impacts from the COVID-19 pandemic and the disruption to capital markets have been far reaching. While the oil and gas industry has witnessed a substantial recovery of commodity prices and demand for products, there continues to be uncertainty and unpredictability about the impact of the COVID-19 pandemic on our financial and operating results in future periods. The extent to which the COVID-19 pandemic adversely impacts our future financial and operating results, and for what duration and magnitude, depends on several factors that are continuing to evolve, are difficult to predict and, in many instances, are beyond the company’s control. Such factors include the duration and scope of the pandemic, including any further resurgences of the COVID-19 virus and its variants, and the impact on our workforce and operations; the negative impact of the pandemic on the economy and economic activity, including travel restrictions and prolonged low demand for our products; the ability of our affiliates, suppliers and partners to successfully navigate the impacts of the pandemic; the actions taken by governments, businesses and individuals in response to the pandemic; the actions of OPEC and other countries that otherwise impact supply and demand and, correspondingly, commodity prices; the extent and duration of recovery of economies and demand for our products after the pandemic subsides; and Chevron’s ability to keep its cost model in line with changing demand for our products. In-country conditions, including potential future waves of the COVID-19 virus and its variants in countries that appear to have reduced their infection rates, could impact logistics and material movement and remain a risk to business continuity.
In addition, further resurgences of the pandemic could precipitate or aggravate the other risk factors identified in this Form 10-K, which in turn could materially and adversely affect our business, financial condition, liquidity, results of operations and profitability, including in ways not currently known or considered by us to present significant risks.
Cyberattacks targeting Chevron’s process control networks or other digital infrastructure could have a material adverse impact on the company’s business and results of operations There are numerous and evolving risks to Chevron’s cybersecurity and privacy from cyber threat actors, including criminal hackers, state-sponsored intrusions, industrial espionage and employee malfeasance. These cyber threat actors, whether internal or external to Chevron, are becoming more sophisticated and coordinated in their attempts to access the company’s information technology (IT) systems and data, including the IT systems of cloud providers and other third parties with whom the company conducts business.business
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through, without limitation, malicious software; data privacy breaches by employees, insiders or others with authorized access; cyber or phishing-attacks; ransomware; attempts to gain unauthorized access to our data and systems; and other electronic security breaches. Although Chevron devotes significant resources to prevent unwanted intrusions and to protect its systems and data, whether such data is housed internally or by external third parties, the company has experienced and will continue to experience cyber incidents of varying degrees in the conduct of its business. Cyber threat actors could compromise the company’s process control networks or other critical systems and infrastructure, resulting in disruptions to its business operations, injury to people, harm to the environment or its assets, disruptions in access to its financial reporting systems, or loss, misuse or corruption of its critical data and proprietary information, including without limitation its intellectual property and business information and that of its employees, customers, partners and other third parties. Any of the foregoing can be exacerbated by a delay or failure to detect a cyber incident or the full extent of such incident. Further, the company has exposure to cyber incidents and the negative impacts of such incidents related to its critical data and proprietary information housed on third-party IT systems, including the cloud. Additionally, authorized third-party IT systems or software can be compromised and used to gain access or introduce malware to Chevron's IT systems duringthat can materially impact the normal coursecompany’s business. Regardless of business. The company has limited control and visibility over such third-party IT systems. Cyberthe precise method or form, cyber events could result in significant financial losses, legal or regulatory violations, reputational harm, and legal liability and could ultimately have a material adverse effect on the company’s business and results of operations.
The company’s operations have inherent risks and hazards that require significant and continuous oversight Chevron’s results depend on its ability to identify and mitigate the risks and hazards inherent to operating in the crude oil and natural gasenergy industry. The company seeks to minimize these operational risks by carefully designing and building its facilities and conducting its operations in a safe and reliable manner. However, failure to manage these risks effectively could impair our ability to operate and result in unexpected incidents, including releases, explosions or mechanical failures resulting in personal injury, loss of life, environmental damage, loss of revenues, legal liability and/or disruption to operations. Chevron has implemented and maintains a system of corporate policies, processes and systems, behaviors and compliance mechanisms to manage safety, health, environmental, reliability and efficiency risks; to verify compliance with applicable laws and policies; and to respond to and learn from unexpected incidents. In certain situations where Chevron is not the operator, the company may have limited influence and control over third parties, which may limit its ability to manage and control such risks.
The company does not insure against all potential losses, which could result in significant financial exposure The company does not have commercial insurance or third-party indemnities to fully cover all operational risks or potential liability in the event of a significant incident or series of incidents causing catastrophic loss. As a result, the company is, to a substantial extent, self-insured for such events. The company relies on existing liquidity, financial resources and borrowing capacity to meet short-term obligations that would arise from such an event or series of events. The occurrence of a significant incident, series of events, or unforeseen liability for which the company is self-insured, not fully insured or for which insurance recovery is significantly delayed could have a material adverse effect on the company’s results of operations or financial condition.
LEGAL, REGULATORY AND ESG-RELATED RISK FACTORS
Chevron’s business subjects the company to liability risks from litigation or government action The company produces, transports, refines and markets potentially hazardous materials, and it purchases, handles and disposes of other potentially hazardous materials in the course of its business. Chevron's operations also produce byproducts, which may be considered pollutants. Often these operations are conducted through joint ventures over which the company may have limited influence and control. Any of these activities could result in liability or significant delays in operations arising from private litigation or government action. For example, liability or delays could result from an accidental, unlawful discharge or from new conclusions about the effects of the company’s operations on human health or the environment. In addition, to the extent that societal pressures or political or other factors are involved, it is possible that such liability could be imposed without regard to the company’s causation of or contribution to the asserted damage, or to other mitigating factors.
For information concerning some of the litigation in which the company is involved, see Note 14 to the Consolidated Financial Statements, beginning on page 72.
Political instability and significant changes in the legal and regulatory environment could harm Chevron’s business The company’s operations, particularly exploration and production, can be affected by changing economic,political, regulatory and politicaleconomic environments in the various countries in which it operates. As has occurred in the past, actions could be taken by governments to increase public ownership of the company’s partially or wholly owned businesses, to force contract renegotiations, or to impose additional taxes or royalties. In certain locations, governments have proposed or imposed
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restrictions on the company’s operations, trade, currency exchange controls, burdensome taxes, and public disclosure requirements that might harm the company’s competitiveness or relations with other governments or third parties. In other countries, political conditions have existed that may threaten the safety of employees and the company’s continued presence in those countries, and internal unrest, acts of violence or strained relations between a government and the company or other governments may adversely affect the company’s operations. Those developments have, at times, significantly affected the company’s operations and results and are carefully considered by management when evaluating the level of current and future activity in such countries. Further, Chevron is required to comply with U.S. sanctions and other trade laws and regulations of the United States and other jurisdictions where we operate which, depending upon their scope, could adversely impact the company'scompany’s operations and financial results in certain countries. For example, with respect to our operations in Venezuela as discussed in Note 22 to the Consolidated Financial Statements, “Other Contingencies and Commitments - Other Contingencies,” future events could result in the environment in Venezuela becoming more challenged, which could lead to increased business disruption and volatility in the associated financial results. In addition, litigation or changes in national, state or local environmental regulations or laws, including those designed to stop or impede the development or production of oil and gas, such as those related to the use of hydraulic fracturing or bans on drilling, or any law or regulation that impacts the demand for our products, could adversely affect the company’s current or anticipated future operations and profitability.
Legislative or regulatory changes in tax laws may expose Chevron to additional tax liabilities Changes in tax laws and regulations around the world are regularly enacted due to political or economic factors beyond the company’s control. Chevron’s taxes in the jurisdictions where the company conducts business activities have been and may be adversely affected by changes in tax laws or regulations, including but not limited to, substantive changes in, reductions in, or the repeal or expiration of tax incentives, such as U.S. federal tax incentives for biodiesel blending, which expire in 2024. Furthermore, Chevron’s tax returns are subject to audit by taxing authorities around the world. There is no assurance that taxing authorities or courts will agree with the positions that Chevron has reflected on the company’s tax returns, in which case interest and penalties could be imposed that may have a material adverse effect on the company’s results of operations or financial condition.
During periods of high profitability for certain companies or industries, there are often calls for increased taxes on profits, often called “windfall profit” taxes. Governments in various jurisdictions, including California and Australia, have announced, proposed, or implemented windfall profit taxes for companies operating in the energy and oil and gas sectors. Such taxes may be imposed on us or may be increased in the future in these or other jurisdictions. The imposition of, or increase in, such windfall profit taxes could adversely affect the company’s current or anticipated future operations and profitability.
Legislation, regulation, and other government actions and shifting customer and consumer preferences and other private efforts related to greenhouse gas (GHG) emissions has increased and climate change could continue to increase Chevron’s operational costs and reduce demand for Chevron’s hydrocarbon and other products,In the years ahead, companies resulting in the energy industry, like Chevron, may be challenged by a further increase in international and domestic regulation relating to GHG emissions. Like any significant changes in the regulatory environment, GHG regulation could have the impact of curtailing profitability in the oil and gas sector or rendering the extraction of the company’s oil and gas resources economically infeasible. Although the IEA’s World Energy Outlook scenarios anticipate oil and gas continuing to make up a significant portion of the global energy mix through 2040 and beyond given their respective advantages in transportation and power generation, if a new onset of regulation contributes to a decline in the demand for the company’s products, this could have a material adverse effect on the companycompany’s results of operations and its financial condition.condition
Chevron has experienced and may be further challenged by increases in the impacts of international and domestic legislation, regulation, or other government actions relating to GHG emissions (e.g., carbon dioxide and methane) and climate change. International agreements and national, regional, and state legislation and regulatory measures that aim to directly or indirectly limit or reduce GHG emissions are currently in various stages of implementation. For example, the
Legislation, regulation, and other government actions related to GHG emissions and climate change could reduce demand for Chevron’s hydrocarbon and other products and/or continue to increase Chevron’s operational costs. The Paris Agreement went into effect in November 2016, and a number of countries are studying andin which we operate may adopt additional policies to meet their Paris Agreement goals. In some jurisdictions, the company is already subject to currently implemented programs such as the U.S. Renewable Fuel Standard program, the European Union Emissions Trading System, and the California cap-and-trade program and related low carbon fuel standard obligations. OtherGlobally, multiple jurisdictions are considering adopting or are in the process of implementing laws or regulations to directly regulate GHG emissions through similar or other mechanisms, such as for example, via a carbon tax, (e.g., Singapore and Canada) or via a cap-and-trade program, (e.g., California, Mexicoor performance standards, or to indirectly advance reduction of GHG emissions through restrictive permitting, trade tariffs, minimum renewable usage requirements, increased GHG reporting and China). The landscape continuesclimate-related disclosure requirements, or tax advantages or other incentives to be in a statepromote the use of constant re-assessment and legal challenge with respect to these laws and regulations, making it difficult to predict with certainty the ultimate impact they will have onalternative energy, fuel sources or lower-carbon technologies. For example, the company is currently subject to implemented programs in certain jurisdictions, such as the Renewable Fuel Standard program in the aggregate.
U.S., California’s Cap-and-Trade Program and Low Carbon Fuel Standard, and newly approved mandates such as the California Air Resources Board Advanced Clean Cars II regulations, as well as other indirect regulation of GHG emissions-related laws and related regulations and the effects of operating in a potentially carbon-constrained environmentemissions, which may, result in increased and substantial capital, compliance, operating and maintenance costs and could, among other things, reduce demand for hydrocarbons andban or restrict technologies or products that use the company’s hydrocarbon-based products, make the company’s products more expensive, adversely affect the economic feasibility of the company’s resources, and adversely affect the company’s sales volumes, revenues and margins.hydrocarbon products. GHG emissions (e.g., carbon dioxide and methane) that couldmay be directly regulated through such efforts include, among others, those associated with the company’s exploration and production of hydrocarbons such as crude oil and natural gas;
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hydrocarbons; the upgrading of production from oil sands into synthetic oil; power generation; the conversion of crude oil and natural gas into refined hydrocarbon products; the processing, liquefaction, and regasification of natural gas; the transportation of crude oil, natural gas, and related productsproducts; and customers’ and consumers’ or customers’ use of the company’s hydrocarbon products. In addition, the U.S. Inflation Reduction Act (IRA) implements various incentives for lower carbon activities, including carbon capture and storage and the production of hydrogen and sustainable aviation fuel. Although the IRA offers incentives that could support certain lower carbon lines of business, those same incentives could negatively impact demand for our traditional base business of oil and gas products in the future or any existing or future lower carbon business lines. Many of these activities, suchactions, as well as customers’ and consumers’ preferences and customers’ use of the company’s products andor substitute products, as well asand actions taken by the company’s competitors in response to such lawslegislation and regulations, are beyond the company’s control.
The ultimate effect of international agreements andagreements; national, regional, and state legislation and regulatory measuresregulation; and government and private actions related to limit GHG emissions and climate change on the company’s financial performance, and the timing of these effects, will depend on a number of factors. Such factors include, among others, the sectors covered, the GHG emissions reductions required, the extent to which Chevron would be entitled to receive emission allowance allocations or would need to purchase compliance instruments on the open market or through auctions, the price and availability of emission allowances and credits and the extent to which the company is able to recover, or continue to recover, the costs incurred through the pricing of the company’s products in the competitive marketplace. Further, the ultimate impact of GHG emissions-relatedemissions and climate change-related agreements, legislation, regulation, and measuresgovernment actions on the company’s financial performance is highly uncertain because the company is unable to predict with certainty, for a multitude of individual jurisdictions, the outcome of political decision-making processes, including the actual laws and regulations enacted, the variables and tradeoffs that inevitably occur in connection with such processes.processes, and market conditions.
Increasing attention to environmental, social, and governance (ESG) matters may impact our business Increasing attention to ESG matters, including those related to climate change and sustainability, increasing societal, expectationsinvestor and legislative pressure on companies to address climate change,ESG matters, and potential consumercustomer and customerconsumer use of substitutes to Chevron’s products may result in changes to the portfolio of company activities, increased costs, reduced demand for our products, reduced profits, increased investigations and litigation andor threats thereof, negative impacts on our stock price and access to capital markets.markets, and damage to our reputation. Increasing attention to climate change, for example, may result in demand shifts for our hydrocarbon products and additional governmental investigations and private litigation, or threats thereof, against the company. For instance, we have received investigative requests and demands from the U.S. Congress for information relating to climate change, methane leak detection and repair, and other topics, and further requests and/or demands are possible. At this time, Chevron cannot predict the ultimate impact any Congressional or other investigations may have on the company.
Some stakeholders, including but not limited to sovereign wealth, pension, and endowment funds, have been divesting and promoting divestment of or screening out of fossil fuel equities and urging lenders to limit funding to companies engaged in the extraction of fossil fuel reserves. Further, voluntary carbon-related and target-setting frameworks have developed, and continue to develop, that limit the ability of certain sectors, including the oil and gas sector, from participating, and may result in exclusion of the company’s equity from being included as an investment option in portfolios. In addition, some stakeholders, including some of our investors, have divergent views on our ESG-related strategies and priorities, vis-à-vis our traditional and lower carbon lines of business, calling for focus on increased production of oil and gas products
24
rather than new business lines and climate-related targets. These circumstances, among others, may result in pressure from activists on production; unfavorable reputational impacts, including inaccurate perceptions or a misrepresentation of our actual ESG policies and practices; diversion of management’s attention and resources; and proxy fights, among other material adverse impacts on our businesses.
In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters.matters, including climate change and climate-related risks (including entities commonly referred to as “raters and rankers”). Such ratings are used by some investors to inform their investment and voting decisions. Unfavorable ESG ratings and investment community divestment initiatives, among other actions, may lead to increased negative investor sentiment toward Chevron and our industry and to the diversion of investment to other industries, which could have a negative impact on our stock price and our access to and costs of capital. Additionally, evolving expectations on various ESG matters, including biodiversity, waste and water, may increase costs, require changes in how we operate and lead to negative stakeholder sentiment.
Our aspirations, targets and disclosures related to ESG matters subject us to numerous risks that may negatively impact our reputation and stock price or result in other material adverse impacts to the company Chevron has announced an aspiration to achieve net zero Scope 1 and 2 emissions in upstream by 2050. The company also has set nearer-term GHG emission-related targets for zero routine flaring, upstream carbon intensity, and portfolio carbon intensity. These and other aspirations, targets or objectives reflect our current plans and aspirations and are not guarantees that we will achieve them, particularly as we encounter new opportunities and/or limitations as our portfolio and market conditions evolve.
Our ability to achieve any aspiration, target or objective, including with respect to climate-related initiatives, our new lower carbon strategy outlined in the Management’s Discussion and Analysis of Financial Condition and Results of Operations, pages 32 through 34, and any lower carbon new energy businesses, is subject to numerous risks, many of which are outside of our control. Examples of such risks include: (1) the continuing progress of commercially viable technologies and low- or non-carbon-based energy sources; (2) the granting of necessary permits by governing authorities; (3) the availability and acceptability of cost-effective, verifiable carbon credits; (4) the availability of suppliers that can meet our sustainability and other standards; (5) evolving regulatory requirements affecting ESG standards or disclosures; (6) evolving standards for tracking and reporting on emissions and emission reductions and removals; (7) customers’ and consumers’ preferences and use of the company’s products or substitute products; and (8) actions taken by the company’s competitors in response to legislation and regulations.
The standards for tracking and reporting on ESG matters are relatively new, have not been harmonized and continue to evolve. Our selection of disclosure frameworks that seek to align with various voluntary reporting standards may change from time to time and may result in a lack of comparative data from period to period. In addition, our processes and controls may not always align with evolving voluntary standards for identifying, measuring, and reporting ESG metrics, our interpretation of reporting standards may differ from those of others, and such standards may change over time, any of which could result in significant revisions to our goals or reported progress in achieving such goals. Achievement of or efforts to achieve aspirations, targets, goals and objectives such as the foregoing and future internal climate-related initiatives may increase costs, require purchase of carbon credits, or limit or impact the company’s business plans, operations and financial results, potentially resulting in the reduction to the economic end-of-life of certain assets, an impairment of the associated net book value, among other material adverse impacts. Our failure or perceived failure to pursue or fulfill such aspirations, targets, goals and objectives or to satisfy various reporting standards within the timelines we announce, or at all, could have a negative impact on the company’s reputation, investor sentiment, ratings outcomes for evaluating the company’s approach to ESG matters, stock price, and cost of capital and expose us to government enforcement actions and private litigation, among other material adverse impacts.
GENERAL RISK FACTORS
Changes in management’s estimates and assumptions may have a material impact on the company’s consolidated financial statements and financial or operational performance in any given period In preparing the company’s periodic reports under the Securities Exchange Act of 1934, including its financial statements, Chevron’s management is required under applicable rules and regulations to make estimates and assumptions as of a specified date. These estimates and assumptions are based on management’s best estimates and experience as of that date and are subject to substantial risk and uncertainty. Materially different results may occur as circumstances change and additional information becomes known. Areas requiring significant estimates and assumptions by management include impairments to property, plant and equipment;equipment and investments in affiliates; estimates of crude oil and natural gas recoverable reserves; accruals for estimated
25
liabilities, including litigation reserves; and measurement of benefit obligations for pension and other postretirement benefit plans. Changes in estimates or assumptions or the information underlying the assumptions, such as changes in the company’s business plans, general market conditions, the pace of energy transition, or changes in the company’s outlook on commodity prices, could affect reported amounts of assets, liabilities or expenses.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
The location and character of the company’s crude oil and natural gas properties and its refining, marketing, transportation, and chemicals facilities are described beginning on page 3 under Item 1. Business. Information required by Subpart 1200 of Regulation S-K (“Disclosure by Registrants Engaged in Oil and Gas Producing Activities”) is also contained in Item 1 and in Tables I through VII on pages 9299 through 103. 111 and Note 16, “Properties,18 Properties, Plant and Equipment” to the company’s financial statements is on page 77..
Item 3. Legal Proceedings
As previously disclosed, the refinery in Pasadena, Texas acquired by Chevron on May 1, 2019 (Pasadena Refining System, Inc.California Department of Fish and PRSI Trading LLC) has multiple outstanding NoticesGame, Office of Spill Prevention and Response issued a Complaint - Notice of Violation (NOVs) that were issued by the Texas
As previously disclosed, the California Department of Conservation, California Geologic Energy Management Division (CalGEM) (previously known as the Division of Oil, Gas and Geothermal Resources) promulgated revised rules pursuant to the Underground Injection Control program that took effect April 1, 2019. Subsequent to that date, CalGEM issued NOVs and two orders to Chevron related to seeps that occurred in the Cymric Oil Field in Kern County, California. An October 2, 2019 CalGEM order seeks a civil penalty of approximately $2.7 million. Chevron has filed an appeal of this order. Other state agencies may become engagedChevron is currently in this matter as well. Resolution of this matter may resultdiscussions with CalGEM to explore a global settlement to resolve the order and all past and present seeps in the paymentCymric Field, which would increase the amount of civil penalties of $100,000 or more.penalty paid.
Item 4. Mine Safety Disclosures
Not applicable.
Information about our Executive Officers
Information relating to the company’s executive officers is included under “Information about our Executive Officers” in Part III, Item 10, “Directors,Directors, Executive Officers and Corporate Governance” on page 24,Governance, and is incorporated herein by reference.
PART II
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
The company’s common stock is listed on the New York Stock Exchange (trading symbol: CVX). As of February 10, 2020,2023, stockholders of record numbered approximately 118,000.104,000. There are no restrictions on the company’s ability to pay dividends. The information on Chevron’s dividends are contained in the Quarterly Results tabulations on page 48. tabulation.
Chevron Corporation Issuer Purchases of Equity Securities for Quarter Ended December 31, 20192022
| Total Number | Average | Total Number of Shares | Approximate Dollar Values of Shares that | |||||||||||
| of Shares | Price Paid | Purchased as Part of Publicly | May Yet be Purchased Under the Program | |||||||||||
| Period | Purchased 1,2 | per Share | Announced Program | (Billions of dollars) 2 | ||||||||||
| October 1 – October 31, 2022 | 7,582,842 | $165.65 | 7,582,805 | $9.4 | ||||||||||
| November 1 – November 30, 2022 | 6,967,090 | $183.00 | 6,966,715 | $8.1 | ||||||||||
| December 1 – December 31, 2022 | 6,972,807 | $174.82 | 6,972,807 | $6.9 | ||||||||||
| Total October 1 – December 31, 2022 | 21,522,739 | $174.24 | 21,522,327 | |||||||||||
| Total Number | Average | Total Number of Shares | Approximate Dollar Values of Shares that | |
| of Shares | Price Paid | Purchased as Part of Publicly | May Yet be Purchased Under the Program | |
| Period | Purchased 1,2 | per Share | Announced Program | (Billions of dollars) 2 |
| Oct. 1 – Oct. 31, 2019 | 3,997,504 | $115.73 | 3,997,500 | $22.1 |
| Nov. 1 – Nov. 30, 2019 | 3,334,204 | $119.48 | 3,334,204 | $21.7 |
| Dec. 1 – Dec. 31, 2019 | 3,280,855 | $118.57 | 3,280,855 | $21.3 |
| Total Oct. 1 – Dec. 31, 2019 | 10,612,563 | $117.78 | 10,612,559 | |
2Refer to Liquidity and Capital Resources for additional detail regarding the company's authorized stock repurchase program. |
Item 6. Selected Financial Data[Reserved]
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The index to Management’s Discussion and Analysis of Financial Condition and Results of Operations Consolidated Financial Statements and Supplementary Data is presented on page 27.in the Financial Table of Contents.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The company’s discussion of interest rate, foreign currency and commodity price market risk is contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations — “FinancialFinancial and Derivative Instrument Market Risk,” beginning on page 42Instruments and in Note 8 to the Consolidated10 Financial Statements, “Financial and Derivative Instruments” beginning on page 66..
Item 8. Financial Statements and Supplementary Data
The index to Management’s Discussion and Analysis, Consolidated Financial Statements and Supplementary Data is presented on page 27.in the Financial Table of Contents.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures The company’s management has evaluated, with the participation of the Chief Executive Officer and the Chief Financial Officer, the effectiveness of the company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (Exchange Act)) as of the end of the period covered by this report. Based on this evaluation, management concluded that the company’s disclosure controls and procedures were effective as of December 31, 2019.2022.
(b) Management’s Report on Internal Control Over Financial Reporting The company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f). The company’s management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the company’s internal control over financial reporting based on the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the results of this evaluation, the company’s management concluded that internal control over financial reporting was effective as of December 31, 2019.2022.
The effectiveness of the company’s internal control over financial reporting as of December 31, 2019,2022, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in its report included herein.
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(c) Changes in Internal Control Over Financial Reporting During the quarter ended December 31, 2019,2022, there were no changes in the company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the company’s internal control over financial reporting.
Item 9B. Other Information
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
Information about our Executive Officers at February 21, 202023, 2023
Members of the Corporation’s Executive Committee are the Executive Officers of the Corporation:
| Name | Age | Current and Prior Positions (up to five years) | Primary Areas of Responsibility | ||||||||
| Michael K. Wirth | Chairman of the Board and Chief Executive Officer (since Feb 2018) | Chairman of the Board and Chief Executive Officer | |||||||||
| Vice President and Chief Financial Officer (since Apr 2019) Executive Vice President, Downstream (Jan 2016 - Mar 2019) | Finance; Procurement | ||||||||||
| A. Nigel Hearne | 55 | Executive Vice President, 2020 - Oct 2022) President, Chevron Asia Pacific Exploration & Production (Jan - Managing Director, Australia Business Unit (July 2016 - Dec 2018) | Upstream - Worldwide Exploration and Downstream - Worldwide Manufacturing, Marketing, Lubricants, and Chemicals; Midstream - Worldwide | ||||||||
| Mark A. Nelson | Vice Chairman and Executive Vice President, Strategy, Policy & Development (since Feb 2023) Executive Vice President, Strategy, Policy & Development (Oct 2022 - Feb 2023) Executive Vice President, Downstream (since Mar Vice President, Midstream, Strategy and Policy (Feb 2018 - Feb 2019) | Strategy & Sustainability; Corporate Affairs; Corporate Business Development | |||||||||
| Eimear P. Bonner | 48 | Vice President (since Aug 2021), Chief Technology Officer and President of Chevron Technical Center (since Feb 2021) General Director of Tengizchevroil (Dec 2018 - Jan 2021) General Manager of Operations of Tengizchevroil (Nov 2015 - Nov 2018) | Information Technology; Subsurface; Global Reserves; Wells; Asset Performance and Process Safety; Facilities Designs and Solutions; Capital Projects; Health, Safety and Environment; Downstream Technology | ||||||||
| Jeff B. Gustavson | 50 | Vice President, Lower Carbon Energies (since Aug 2021) Vice President, (Feb 2018 - | |||||||||
President, Supply and Trading (Jun 2013 - Feb 2019) | |||||||||||
| Rhonda J. Morris | Vice President and Chief Human Resources Officer (since Feb 2019) Vice President, Human Resources (Oct 2016 - Jan 2019) | Human Resources; Diversity and Inclusion | |||||||||
| R. Hewitt Pate | 60 | Vice President and General Counsel (since Aug 2009) | Law, Governance and Compliance | ||||||||
The information about directors required by Item 401(a), (d), (e) and (f) of Regulation S-K and contained under the heading “Election of Directors”directors” in the Notice of the 20202023 Annual Meeting of Stockholders and 20202023 Proxy Statement, to be filed pursuant to Rule 14a-6(b) under the Exchange Act in connection with the company’s 20202023 Annual Meeting (the 20202023 Proxy Statement), is incorporated by reference into this Annual Report on Form 10-K.
The information required by Item 406 of Regulation S-K and contained under the heading “Corporate Governancegovernance — Business Conductconduct and Ethics Code”ethics code” in the 20202023 Proxy Statement is incorporated by reference into this Annual Report on Form 10-K.
The information required by Item 407(d)(4) and (5) of Regulation S-K and contained under the heading “Corporate Governancegovernance — Board Committees”committees” in the 20202023 Proxy Statement is incorporated by reference into this Annual Report on Form 10-K.
Item 11. Executive Compensation
The information required by Item 402 of Regulation S-K and contained under the headings “Executive Compensation,compensation,” “Director compensation” and “CEO Pay Ratio” and “Director Compensation”pay ratio” in the 2020 Proxy Statement is incorporated by reference into this Annual Report on Form 10-K.
The information required by Item 407(e)(5) of Regulation S-K and contained under the heading “Corporate Governancegovernance — Management Compensation Committee Report”compensation committee report” in the 20202023 Proxy Statement is incorporated herein by reference into this Annual Report on Form 10-K. Pursuant to the rules and regulations of the SEC under the Exchange Act, the information under such caption incorporated by reference from the 20202023 Proxy Statement shall not be deemed to be “soliciting material,” or to be “filed” with the Commission, or subject to Regulation 14A or 14C or the liabilities of Section 18 of the Exchange Act, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by Item 403 of Regulation S-K and contained under the heading “Stock Ownership Informationownership information — Security Ownershipownership of Certain Beneficial Ownerscertain beneficial owners and Management”management” in the 20202023 Proxy Statement is incorporated by reference into this Annual Report on Form 10-K.
The information required by Item 201(d) of Regulation S-K and contained under the heading “Equity Compensation Plan Information”compensation plan information” in the 20202023 Proxy Statement is incorporated by reference into this Annual Report on Form 10-K.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by Item 404 of Regulation S-K and contained under the heading “Corporate Governancegovernance — Related Person Transactions”person transactions” in the 20202023 Proxy Statement is incorporated by reference into this Annual Report on Form 10-K.
The information required by Item 407(a) of Regulation S-K and contained under the heading “Corporate Governancegovernance — Director Independence”independence” in the 20202023 Proxy Statement is incorporated by reference into this Annual Report on Form 10-K.
Item 14. Principal AccountingAccountant Fees and Services
The information required by Item 9(e) of Schedule 14A and contained under the heading “Board Proposalproposal to Ratifyratify PricewaterhouseCoopers LLP as the Independent Registered Public Accounting Firmindependent registered public accounting firm for 2020”2023” in the 20202023 Proxy Statement is incorporated by reference into this Annual Report on Form 10-K.
| Financial Table of Contents | ||||||||
Financial Ratios and Metrics | |||||||||
31
| Management's Discussion and Analysis of Financial Condition and Results of Operations | ||||||||
Key Financial Results
| Millions of dollars, except per-share amounts | 2022 | 2021 | 2020 | ||||||||||||||
| Net Income (Loss) Attributable to Chevron Corporation | $ | 35,465 | $ | 15,625 | $ | (5,543) | |||||||||||
| Per Share Amounts: | |||||||||||||||||
| Net Income (Loss) Attributable to Chevron Corporation | |||||||||||||||||
| – Basic | $ | 18.36 | $ | 8.15 | $ | (2.96) | |||||||||||
| – Diluted | $ | 18.28 | $ | 8.14 | $ | (2.96) | |||||||||||
| Dividends | $ | 5.68 | $ | 5.31 | $ | 5.16 | |||||||||||
| Sales and Other Operating Revenues | $ | 235,717 | $ | 155,606 | $ | 94,471 | |||||||||||
| Return on: | |||||||||||||||||
| Capital Employed | 20.3 | % | 9.4 | % | (2.8) | % | |||||||||||
| Stockholders’ Equity | 23.8 | % | 11.5 | % | (4.0) | % | |||||||||||
| Earnings by Major Operating Area | |||||||||||||||||
| Millions of dollars | 2022 | 2021 | 2020 | ||||||||||||||
| Upstream | |||||||||||||||||
| United States | $ | 12,621 | $ | 7,319 | $ | (1,608) | |||||||||||
| International | 17,663 | 8,499 | (825) | ||||||||||||||
| Total Upstream | 30,284 | 15,818 | (2,433) | ||||||||||||||
| Downstream | |||||||||||||||||
| United States | 5,394 | 2,389 | (571) | ||||||||||||||
| International | 2,761 | 525 | 618 | ||||||||||||||
| Total Downstream | 8,155 | 2,914 | 47 | ||||||||||||||
| All Other | (2,974) | (3,107) | (3,157) | ||||||||||||||
Net Income (Loss) Attributable to Chevron Corporation1,2 | $ | 35,465 | $ | 15,625 | $ | (5,543) | |||||||||||
1 Includes foreign currency effects: | $ | 669 | $ | 306 | $ | (645) | |||||||||||
2 Income net of tax, also referred to as “earnings” in the discussions that follow. | |||||||||||||||||
| Millions of dollars, except per-share amounts | 2019 | 2018 | 2017 | ||||||||
| Net Income (Loss) Attributable to Chevron Corporation | $ | 2,924 | $ | 14,824 | $ | 9,195 | |||||
| Per Share Amounts: | |||||||||||
| Net Income (Loss) Attributable to Chevron Corporation | |||||||||||
| – Basic | $ | 1.55 | $ | 7.81 | $ | 4.88 | |||||
| – Diluted | $ | 1.54 | $ | 7.74 | $ | 4.85 | |||||
| Dividends | $ | 4.76 | $ | 4.48 | $ | 4.32 | |||||
| Sales and Other Operating Revenues | $ | 139,865 | $ | 158,902 | $ | 134,674 | |||||
| Return on: | |||||||||||
| Capital Employed | 2.0 | % | 8.2 | % | 5.0 | % | |||||
| Stockholders’ Equity | 2.0 | % | 9.8 | % | 6.3 | % | |||||
| Earnings by Major Operating Area | |||||||||||
| Millions of dollars | 2019 | 2018 | 2017 | ||||||||
| Upstream | |||||||||||
| United States | $ | (5,094 | ) | $ | 3,278 | $ | 3,640 | ||||
| International | 7,670 | 10,038 | 4,510 | ||||||||
| Total Upstream | 2,576 | 13,316 | 8,150 | ||||||||
| Downstream | |||||||||||
| United States | 1,559 | 2,103 | 2,938 | ||||||||
| International | 922 | 1,695 | 2,276 | ||||||||
| Total Downstream | 2,481 | 3,798 | 5,214 | ||||||||
| All Other | (2,133 | ) | (2,290 | ) | (4,169 | ) | |||||
Net Income (Loss) Attributable to Chevron Corporation1,2 | $ | 2,924 | $ | 14,824 | $ | 9,195 | |||||
1 Includes foreign currency effects: | $ | (304 | ) | $ | 611 | $ | (446 | ) | |||
2 Income net of tax, also referred to as “earnings” in the discussions that follow. | |||||||||||
Refer to the “ResultsResults of Operations”Operations section beginning on page 32 for a discussion of financial results by major operating area for the three years ended December 31, 2019.2022. Throughout the document, certain totals and percentages may not sum to their component parts due to rounding.
Business Environment and Outlook
Chevron Corporation is a global energy company with substantial business activities in the following countries: Angola, Argentina, Australia, Azerbaijan, Bangladesh, Brazil, Canada, China, Colombia, Indonesia,Egypt, Equatorial Guinea, Israel, Kazakhstan, Myanmar, Mexico, Nigeria, the Partitioned Zone between Saudi Arabia and Kuwait, the Philippines, Republic of Congo, Singapore, South Korea, Thailand, the United Kingdom, the United States, and Venezuela.
The company’s objective is to safely deliver higher returns, lower carbon and superior shareholder value in any business environment. Earnings of the company depend mostly on the profitability of its upstream business segment. The most significant factor affecting the results of operations for the upstream segment is the price of crude oil, which is determined in global markets outside of the company’s control. In the company’s downstream business, crude oil is the largest cost component of refined products. It is the company’s objective to deliver competitive results and stockholder value in any business environment. Periods of sustained lower commodity prices could result in the impairment or write-off of specific assets in future periods and cause the company to adjust operating expenses, including employee reductions, and capital and exploratory expenditures, along with other measures intended to improve financial performance. Similarly, impairments
Governments, companies, communities, and other stakeholders are increasingly supporting efforts to address climate change. International initiatives and national, regional and state legislation and regulations that aim to directly or write-offs may occurindirectly reduce GHG emissions are in various stages of design, adoption, and implementation. These policies and programs, some of which support the global net zero emissions ambitions of the Paris Agreement, can change the amount of energy consumed, the rate of energy-demand growth, the energy mix, and the relative economics of one fuel versus another. Implementation of jurisdiction-specific policies and programs can be dependent on, and can affect the pace of, technological advancements, the granting of necessary permits by governing authorities, the availability of cost-effective, verifiable carbon credits, the availability of suppliers that can meet sustainability and other standards, evolving regulatory or other requirements affecting ESG standards or other disclosures, and evolving standards for tracking and reporting on emissions and emission reductions and removals.
Some of these policies and programs include renewable and low carbon fuel standards, such as a result of managerial decisions not to progress certain projectsthe Renewable Fuel Standard program in the company's portfolio.U.S. and California’s Low Carbon Fuel Standard; programs that price GHG emissions, including
32
| Management's Discussion and Analysis of Financial Condition and Results of Operations | ||||||||
California’s Cap-and-Trade Program; performance standards, including methane-specific regulation such as the U.S. EPA’s forthcoming New Source Performance Standard and Emissions Guidelines for Existing Sources; and measures that provide various incentives for lower carbon activities, including carbon capture and storage and the production of hydrogen and sustainable aviation fuel, such as the U.S. Inflation Reduction Act. Requirements for these and other similar policies and programs are complex, ever changing, program specific and encompass: (1) the blending of renewable fuels into transportation fuels; (2) the purchasing, selling, utilizing and retiring of allowances and carbon credits; and (3) other emissions reduction measures including efficiency improvements and capturing GHG emissions. While these compliance policies and programs may have negative impacts on the company now and in the future including, but not limited to, the displacement of hydrocarbon and other products, these policies have also enabled opportunities for Chevron as it grows and aims to further grow its lower carbon businesses. For example, the acquisition of Renewable Energy Group, Inc. (REG) in 2022 grew the company’s renewable fuels production capacity and increased the company’s carbon credit generation activities. Although we expect the company’s costs to comply with these policies and programs to continue to increase, these costs currently do not have a material impact on the company’s financial condition or results of operations.
Significant uncertainty remains as to the pace in which the transition to a lower carbon future will progress, which is dependent, in part, on further advancements and changes in policy, technology, and customer and consumer preferences. The level of expenditure required to comply with new or potential climate change-related laws and regulations and the amount of additional investments needed in new or existing technology or facilities, such as carbon capture and storage, is difficult to predict with certainty and is expected to vary depending on the actual laws and regulations enacted, available technology options, customer and consumer preferences, the company’s activities, and market conditions. As discussed below, in 2021, the company announced planned capital spend of approximately $10 billion through 2028 in lower carbon investments. Although the future is uncertain, many published outlooks conclude that fossil fuels will remain a significant part of an energy system that increasingly incorporates lower carbon sources of supply for many years to come.
Chevron supports the Paris Agreement’s global approach to governments addressing climate change and continues to take actions to help lower the carbon intensity of its operations while continuing to meet the demand for energy. Chevron believes that broad, market-based mechanisms are the most efficient approach to addressing GHG emission reductions. Chevron integrates climate change-related issues and the regulatory and other responses to these issues into its strategy and planning, capital investment reviews, and risk management tools and processes, where it believes they are applicable. They are also factored into the company’s long-range supply, demand, and energy price forecasts. These forecasts reflect estimates of long-range effects from climate change-related policy actions, such as electric vehicle and renewable fuel penetration, energy efficiency standards, and demand response to oil and natural gas prices.
The company will continue to develop oil and gas resources to meet customers’ and consumers’ demand for energy. At the same time, Chevron believes that the future of energy is lower carbon. The company will continue to maintain flexibility in its portfolio to be responsive to changes in policy, technology, and customer and consumer preferences. Chevron aims to grow its traditional oil and gas business, lower the carbon intensity of its operations and grow lower carbon businesses in renewable fuels, hydrogen, carbon capture, offsets, and other emerging technologies. To grow its lower carbon businesses, Chevron plans to target sectors of the economy where emissions are harder to abate or that cannot be easily electrified, while leveraging the company’s capabilities, assets and customer relationships. The company’s traditional oil and gas business may increase or decrease depending upon regulatory or market forces, among other factors.
In 2021, Chevron announced the following aspiration and targets that are aligned with its lower carbon strategy:
2050 Net Zero Upstream Aspiration Chevron aspires to achieve net zero for upstream production Scope 1 and 2 GHG emissions on an equity basis by 2050.The company believes accomplishing this aspiration depends on, among other things, partnerships with multiple stakeholders including customers, continuing progress on commercially viable technology, government policy, successful negotiations for carbon capture and storage and nature-based projects, availability and acceptability of cost-effective, verifiable offsets in the global market, and granting of necessary permits by governing authorities.
2028 Upstream Production GHG Intensity TargetsThese metrics include Scope 1, direct emissions, and Scope 2, indirect emissions from imported electricity and steam, and are net of emissions from exported electricity and steam. The targeted 2028 reductions from 2016 on an equity ownership basis include a:
•40 percent reduction in oil production GHG intensity to 24 kilograms (kg) carbon dioxide equivalent per barrel of oil-equivalent (CO2e/boe),
•26 percent reduction in gas production GHG intensity to 24 kg CO2e/boe,
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•53 percent reduction in methane intensity to 2 kg CO2e/boe, and
•66 percent reduction in flaring GHG intensity to 3 kg CO2e/boe.
The company also targets no routine flaring by 2030. We have set 2016 as our baseline to align with the year the Paris Agreement entered into force, and the company plans to update the metrics every five years in line with the Paris Agreement stocktakes. We believe these updates will provide additional transparency on the company’s progress toward its net zero aspiration.
2028 Portfolio Carbon Intensity TargetThe company also introduced a portfolio carbon intensity (PCI) metric, which is a measure of the carbon intensity across the full value chain of Chevron’s entire business. This metric encompasses the company’s upstream and downstream business and includes Scope 1 (direct emissions), Scope 2 (indirect emissions from imported electricity and steam), and certain Scope 3 (primarily emissions from use of sold products) emissions. The company’s PCI target is 71 grams (g) carbon dioxide equivalent (CO2e) per megajoule (MJ) by 2028, a greater than five percent reduction from 2016.
Planned Lower-Carbon Capital Spend through 2028In 2021, the company established planned capital spend of approximately $10 billion through 2028 to advance its lower carbon strategy, which includes approximately $2 billion to lower the carbon intensity of its traditional oil and gas operations, and approximately $8 billion for lower carbon investments in renewable fuels, hydrogen and carbon capture and offsets. We anticipate setting additional capital spending targets as the company progresses toward its 2050 upstream production Scope 1 and 2 net zero aspiration and further grows its lower carbon business lines.
During 2021 and 2022, the company spent $4.8 billion in lower carbon investments, including $2.9 billion associated with the acquisition of REG.
Refer to “Risk Factors” in Part I, Item 1A, on pages 20 through 26 for further discussion of GHG regulation and climate change and the associated risks to Chevron’s business, including the risks impacting Chevron’s lower carbon strategy and its aspirations, targets and plans.
Income Taxes The effective tax rate for the company can change substantially during periods of significant earnings volatility. This is due to the mix effects that are impacted by both by the absolute level of earnings or losses and whether they arise in higher or lower tax rate jurisdictions. As a result, a decline or increase in the effective income tax rate in one period may not be indicative of expected results in future periods. Note 15 providesAdditional information related to the company’s effective income tax rate is included in Note 17 Taxes to the Consolidated Financial Statements.
The Inflation Reduction Act (IRA), enacted in the United States on August 16, 2022, imposes several new taxes that will be effective in 2023, including a 15 percent minimum tax on book income and a 1 percent excise tax on stock repurchases. The IRA also implements various incentives for lower carbon activities, including carbon capture and storage and the production of hydrogen and sustainable aviation fuel, and extends the federal biodiesel mixture excise tax credit through December 31, 2024. We do not currently expect the IRA to have a material impact on our results of operations.
Supply Chain and Inflation ImpactsThe company is actively managing its contracting, procurement, and supply chain activities to effectively manage costs and facilitate supply chain resiliency and continuity in support of the company’s operational goals. Third party costs for capital, exploration, and operating expenses can be subject to external factors beyond the company’s control including, but not limited to: severe weather or civil unrest, delays in construction, global and local supply chain distribution issues, inflation, tariffs or other taxes imposed on goods or services, and market-based prices charged by the industry’s material and service providers. Chevron utilizes contracts with various pricing mechanisms, which may result in a lag before the company’s costs reflect changes in market trends.
Inflation continued to be a key factor impacting the economy over the last three years.year. For key oil and gas industry inputs (e.g. rigs, well services, etc.), markets are likely to remain tight with any upward pressure tied directly to possible increases in activity. In contrast, inflationary pressures have started to reduce for non-oil and gas specific goods and services as a result of reduced supply chain disruptions and a slowdown in economic activity. Chevron’s 2023 capital expenditure budget assumes cost inflation that averages in the mid-single digits with certain areas higher, such as in the Permian Basin that assumes low double-digit cost inflation. Chevron believes it is well positioned to manage its costs for 2023, in large part due to indexed contracts and secured supplies for critical inputs.
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Refer to the “Cautionary Statements Relevant to Forward-Looking Information” on page 2 and to “Risk Factors” in Part I, Item 1A, on pages 1820 through 2126 for a discussion of some of the inherent risks that could materially impact the company’s results of operations or financial condition.
Other Impacts The company continually evaluates opportunities to dispose of assets that are not expected to provide sufficient long-term value orand to acquire assets or operations complementary to its asset base to help augment the company’s financial performance and value growth. Asset dispositions and restructurings may result in significant gains or losses in future periods. The company’s
The company closely monitors developments in the financial and credit markets, the level of worldwide economic activity, and the implications for the company of movements in prices for crude oil and natural gas. Management takes these developments into account in the conduct of daily operations and for business planning.
Earnings trends for the company’s major business areas are described as follows:
Upstream Earnings for the upstream segment are closely aligned with industry prices for crude oil and natural gas. Crude oil and natural gas prices are subject to external factors over which the company has no control, including product demand connected with global economic conditions, industry production and inventory levels, technology advancements, production quotas or other actions imposed by the Organization of Petroleum Exporting Countries (OPEC) or other producers,OPEC+ countries, actions of regulators, weather-related damage and disruptions, competing fuel prices, natural and human causes beyond the company’s control such as the COVID-19 pandemic, and regional supply interruptions or fears thereof that may be caused by military conflicts, civil unrest or political uncertainty. Any of these factors could also inhibit the company’s production capacity in an affected region. The company closely monitors developments in the countries in which it operates and holds investments and seeks to manage risks in operating its facilities and businesses.
The longer-term trend in earnings for the upstream segment is also a function of other factors, including the company’s ability to find or acquire and efficiently produce crude oil and natural gas, changes in fiscal terms of contracts, the pace of energy transition, and changes in tax, environmental and other applicable laws and regulations.
Caspian Pipeline Consortium (CPC), an equity affiliate, operates a 935-mile crude oil export pipeline from the Tengiz Field in Kazakhstan to tanker-loading facilities at Novorossiysk on the Russian coast of the Black Sea, providing the main export route for crude oil production from TCO, Karachaganak and natural gas canother producing fields in Kazakhstan. The tanker loading facilities at Novorossiysk consist of three single point mooring facilities, with availability of two or more required to operate at full capacity. CPC is capable of operating at approximately 70 percent of capacity with one single point mooring facility in service. Two of the three offshore loading moorings at the CPC marine terminal were taken out of service during August 2022 for equipment repairs identified during normal maintenance. Repairs were completed in fourth quarter 2022. Production at TCO was not impacted by this CPC outage given turnaround activity at TCO and at other regional producers that ship through CPC. However, there is a risk that production from TCO could be subjectcurtailed in the future should availability of export facilities be constrained.
Governments (including Russia) have imposed and may impose additional sanctions and other trade laws, restrictions and regulations that could lead to external factors beyonddisruption in our ability to produce, transport and/or export crude in the region around Russia and could have an adverse effect on CPC operations and/or the company’s controlfinancial position. The financial impacts of such risks, including butpresently imposed sanctions, are not limited to:currently material for the general level of inflation, tariffscompany; however, it remains uncertain how long these conditions may last or other taxes imposed on goods or services, and commoditized prices charged by the industry’s material and service providers.how severe they may become.
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Commodity Prices The spot markets for many services and materials fell as overall industry drilling activity in North America declined in 2019, particularly onshore. However, as industry activity contracts, financial pressure on suppliers has increased, which may limit further de-escalation and/or lead to consolidation across the supplier community impacting costs. The international and offshore rig markets are also showing some signs of weaknesses as activity has pulled back; however, pricing for some products and services remains resilient as many suppliers have reset expectations of higher industry spend and instead are looking to higher pricing and margins on a more limited scope of work. Chevron utilizes contracts with various pricing mechanisms, so there may be a delay in when the company’s costs reflect the changes in market trends.
Crude prices increased in 2022 driven by geopolitical risk, supply decisions by OPEC+ and continued demand recovery due to the further easing of COVID-19 restrictions. The Brent price averaged $64company’s average realization for U.S. crude oil and natural gas liquids in 2022 was $77 per barrel, for the full-year 2019, compared to $71 in 2018. Brent prices increased through the first half of 2019 due to OPEC production cuts and U.S. sanctions on Iran and Venezuela. Prices then started to decline due to heightened concerns about a slowing macro economy and weakening oil demand growth amid trade tensions between the
from 2021. The WTI price averaged $57 per barrel for the full-year 2019, compared to $65 in 2018. WTI traded at a discount to Brent throughout 2019. Differentials to Brent have ranged between $4 to $10 in 2019, primarily due to pipeline infrastructure constraints which have restricted flows of inland crude to export outlets on the Gulf Coast. Variability in other factors impacting supply and demand of each benchmark crude also affect price differential. As of mid-February 2020, the WTI price was $52 per barrel.
In contrast to price movements in the global market for crude oil, price changesprices for natural gas are more closely aligned with seasonal supply-and-demandalso impacted by regional supply and demand and infrastructure conditions in local markets. In the United States, prices at Henry Hub averaged $2.53$6.36 per thousand cubic feet (MCF) during 2019,2022, compared with $3.12$3.85 per MCF during 2018.2021. As of mid-February 2020,2023, the Henry Hub spot price was $1.84$2.40 per MCF. Increased production in(See page 43 for the Permian Basin has resulted in insufficient gas pipeline and fractionation capacity in the near-term, and over-supply conditions, leading to depressed natural gas and natural gas liquids prices in West Texas. A sizable portion of Chevron’s U.S. natural gas production comes from the Permian Basin, resulting incompany’s average natural gas realizations that are significantly lower thanfor the Henry Hub price.U.S.).
Outside the United States, price changesprices for natural gas also depend on a wide range of supply, demand and regulatory circumstances. Chevron sells natural gas into the domestic pipeline market in many locations. In some locations, Chevron has invested in long-term projects to produce and liquefy natural gas for transport by tanker to other markets. The company’s long-term contract prices for liquefied natural gas (LNG) are typically linked to crude oil prices. Most of the equity LNG offtake from the operated Australian LNG projects is committed under binding long-term contracts, with the remainder to besome sold in the Asian spot LNG market. The Asian spot market reflects the supply and demand for LNG in the Pacific Basin and is not directly linked to crude oil prices. International natural gas realizations averaged $5.83$9.75 per MCF during 2019,2022, compared with $6.29$5.93 per MCF during 2018. (See page 37 for the company’s average natural gas realizations for the U.S. and international regions.)2021, mainly due to higher LNG prices.
ProductionThe company’s worldwide net oil-equivalent production in 2019 averaged 3.0582022 was 3 million barrels per day. About 1527 percent of the company’s net oil-equivalent production in 20192022 occurred in the OPEC-memberOPEC+ member countries of Angola, Equatorial Guinea, Kazakhstan, Nigeria, the Partitioned Zone between Saudi Arabia and Kuwait and Republic of Congo and Venezuela. OPEC quotas had no material effect on the company’s net crude oil production in 2019 or 2018.Congo.
The company estimates thatits net oil-equivalent production in 2020 will grow up to 3 percent compared to 2019,2023, assuming a Brent crude oil price of $60$80 per barrel, and excluding the impact of anticipated 2020 asset sales.to be flat to up 3 percent compared to 2022. This estimate is subject to many factors and uncertainties, including quotas or other actions that may be imposed by OPEC; tariffs and trade sanctions;OPEC+; price effects on entitlement volumes; changes in fiscal terms or restrictions on the scope of company operations; delays in construction; reservoir performance; greater-than-expected declines in production from mature fields; start-up or ramp-up of projects; fluctuations in demand for crude oil and natural gas in various markets; weather conditions that may shut in production; civil unrest; changing geopolitics; delays in completion of maintenance turnarounds; storage constraints or economic conditions that could lead to shut-in production; or other disruptions to operations. The outlook for future production levels is also affected by the size and number of economic investment opportunities and the time lag between initial exploration and the beginning of production. The company has increased its investment emphasis on short-cycle projects.
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Proved ReservesNet proved reserves for consolidated companies and affiliated companies totaled 11.411.2 billion barrels of oil-equivalent at year-end 2019,2022, a slight decrease of 5 percent from year-end 2018.2021. The reserve replacement ratio in 20192022 was 4497 percent. The 5 and 10 year reserve replacement ratios were 10692 percent and 10199 percent, respectively. Refer to Table V beginning on page 96 for a tabulation of the company’s proved net oil and gas reserves by geographic area, at the beginning of 20172020 and each year-end from 20172020 through 2019,2022, and an accompanying discussion of major changes to proved reserves by geographic area for the three-year period ending December 31, 2019.2022.
Refer to the “Results of Operations” section on pages 32 through 3439 and 40 for additional discussion of the company’s upstream business.
Downstream Earnings for the downstream segment are closely tied to margins on the refining, manufacturing and marketing of products that include gasoline, diesel, jet fuel, lubricants, fuel oil, fuel and lubricant additives, petrochemicals and petrochemicals.renewable fuels. Industry margins are sometimes volatile and can be affected by the global and regional supply-and-demand balance for refined products and petrochemicals, and by changes in the price of crude oil, other refinery and petrochemical feedstocks, and natural gas. Industry margins can also be influenced by inventory levels, geopolitical events, costs of materials and services, refinery or chemical plant capacity utilization, maintenance programs, and disruptions at refineries or chemical plants resulting from unplanned outages due to severe weather, fires or other operational events.
Other factors affecting profitability for downstream operations include the reliability and efficiency of the company’s refining, marketing and petrochemical assets, the effectiveness of its crude oil and product supply functions, and the volatility of tanker-charter rates for the company’s shipping operations, which are driven by the industry’s demand for crude oil and product tankers. Other factors beyond the company’s control include the general level of inflation and energy costs to operate the company’s refining, marketing and petrochemical assets, and changes in tax, environmental, and other applicable laws and regulations.
Refining margins were higher in 2022 because of recovering demand for refined products, low product inventories, lower industry refining capacity and lower product exports from Russia and China. Refining utilization was strong in 2022 to keep pace with demand growth. Although refining margins were elevated and still remain above historical levels, they fell considerably in late 2022. There are signs that higher refined product prices and concerns over macroeconomic conditions are slowing demand.
The company’s most significant marketing areas are the West Coast and Gulf Coast of the United States and Asia.Asia Pacific. Chevron operates or has significant ownership interests in refineries in each of these areas. Additionally, the company has a growing presence in renewable fuels after acquiring REG.
Refer to the “Results of Operations” section on pages 32 through 34page 40 for additional discussion of the company’s downstream operations.
All Other consists of worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities and technology companies.
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Key operatingnoteworthy developments and other events during 20192022 and early 20202023 included the following:
Australia Received permits, as part of joint ventures, to assess carbon storage for three blocks totaling nearly 7.8 million acres in offshore Australia.
Canada Invested in Aurora Hydrogen, a company developing emission-free hydrogen production technology.
Egypt Made a significant gas discovery at the Nargis block offshore Egypt in the eastern Mediterranean Sea.
Finland Acquired Neste Oyj’s Group III base oil business, including its related sales and marketing business, and NEXBASETM brand.
Israel Approved a project to expand the company’s Tamar gas field in offshore Israel.
Namibia Entered Namibia by acquiring an agreement80 percent working interest in a deepwater oil and gas exploration lease.
Nigeria Extended Agbami and Usan leases to sell2042.
Qatar Reached final investment decision with QatarEnergy on Ras Laffan Petrochemicals Complex through the company’s 50 percent owned affiliate, Chevron Phillips Chemical Company LLC (CPChem).
Republic of Congo Extended the Haute Mer production sharing contract to 2040.
United States Completed the sale of the company’s interest in the Azeri-Chirag-Gunashli fields and Baku-Tbilisi-Ceyhan pipeline.
United KingdomStates CompletedApproved the sale of interestBallymore project in the Rosebank field.deepwater U.S. Gulf of Mexico. The field is planned to be produced through an existing facility with an allocated capacity of 75,000 barrels of crude oil per day.
United KingdomStates Completed Project Canary pilot to independently certify operational and environment performance and earned highest certification rating for almost all participating Permian and DJ basins upstream assets, positioning the sale of Central North Seacompany to market responsibly sourced natural gas from the certified assets.
United States AnnouncedAcquired a 50 percent stake in an expanded joint venture to develop the sanctionBayou Bend Carbon Capture and Sequestration (CCS) hub, with the goal of a waterflood projectthe hub becoming one of the first offshore CCS projects in the St. Malo fieldUnited States.
United States Formed a joint venture with Bunge North America, Inc. to develop renewable fuel feedstocks, leveraging Bunge’s expertise in oilseed processing and farmer relationships and Chevron’s expertise in fuels manufacturing and marketing.
United States Acquired REG, becoming the second largest producer of bio-based diesel in the United States.
United States Awarded 34 exploration leases in the Gulf of Mexico.
United StatesAnnounced final investment decisionin a new joint venture with California Bioenergy LLC to build infrastructure for the Anchor fieldcompany’s dairy biomethane projects in the Gulf of Mexico.
United States Commenced a project expected to increase light crude oil processing capacity to 125,000 barrels per day at the company’s Pasadena, Texas refinery.
United States Reached final investment decision on a major integrated polymer project (Golden Triangle Polymers) in the U.S. Gulf Coast at its 50 percent owned affiliate, CPChem.
United StatesCompleted the acquisitionconstruction of a refineryjoint venture solar energy project to generate renewable energy for the company’s oil and gas operations in Pasadena, Texas.the Permian Basin.
United States Announced collaboration with Raven SR Inc. and Hyzon Motors to produce hydrogen from green waste.
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United States Announced agreements or investments in companies to jointlyaccess and possibly develop petrochemical complexes in Qatarlower carbon technologies, including Iwatani Corporation (hydrogen fueling sites), Carbon Clean Solutions Limited (carbon capture), TAE Technologies (nuclear fusion) and the U.S. Gulf Coast.
Common Stock Dividends The 20192022 annual dividend was $4.76$5.68 per share, making 20192022 the 32nd35th consecutive year that the company increased its annual per share dividend payout. In January 2020,2023, the company’s Board of Directors approved a $0.10increased its quarterly dividend by $0.09 per share, increase in the quarterly dividendapproximately six percent, to $1.29$1.51 per share payable in March 2020, representing an increase of 8.4 percent.2023.
Common Stock Repurchase Program The company purchased $4repurchased $11.25 billion of its common stock in 20192022 under its stock repurchase programs. The company currently expects to repurchase $5 billion of itsprogram. For more information on the common stock in 2020.repurchase program, see Liquidity and Capital Resources.
Results of Operations
The following section presents the results of operations and variances on an after-tax basis for the company’s business segments – Upstream and Downstream – as well as for “All Other.” Earnings are also presented for the U.S. and international geographic areas of the Upstream and Downstream business segments. Refer to Note 12, beginning on page 68,14 Operating Segments and Geographic Data for a discussion of the company’s “reportable segments.” This section should also be read in conjunction with the discussion in “BusinessBusiness Environment and Outlook” on pages 28 through 32.Outlook. Refer to the “SelectedSelected Operating Data” table on page 37Data for a three-year comparison of production volumes, refined product sales volumes and refinery inputs. A discussion of variances between 20182021 and 20172020 can be found in the “Results of Operations” section on pages 3239 through 3440 of the company’s 20182021 Annual Report on Form 10-K filed with the SEC on February 22, 2019.24, 2022.
 |
U.S. Upstream
| Millions of dollars | 2022 | 2021 | 2020 | |||||||||||||||||
| Earnings (Loss) | $ | 12,621 | $ | 7,319 | $ | (1,608) | ||||||||||||||
| Millions of dollars | 2019 | 2018 | 2017 | |||||||||
| Earnings | $ | (5,094 | ) | $ | 3,278 | $ | 3,640 | |||||
U.S. upstream recorded a lossreported earnings of $5.09$12.6 billion in 2019,2022, compared with earnings of $3.28$7.3 billion in 2018.2021. The decrease in earningsincrease was largely due to $8.17higher realizations of $6.6 billion in 2019 impairment charges primarily associated with Appalachia shale and Big Foot, partially offset by the absencehigher sales volumes of 2018 write-offs and impairments of $660 million, largely due to the Tigris Project in the Gulf of Mexico. Also contributing to the decrease was lower crude oil and natural gas prices of $1.72 billion, higher operating expenses of $260 million and the absence of several 2018 asset sale gains totaling $220$380 million, partially offset by higher crude oiloperating expenses of $1.1 billion largely due to an early contract termination at Sabine Pass and natural gas productionlower asset sale gains of $1.33 billion.$670 million.
The company’s average realization for U.S. crude oil and natural gas liquids in 20192022 was $48.54$76.71 per barrel compared with $58.17$56.06 in 2018.2021. The average natural gas realization was $1.09$5.55 per thousand cubic feet in 2019,2022, compared with $1.86$3.11 in 2018.2021.
Net oil-equivalent production in 20192022 averaged 929,0001.18 million barrels per day, up 174 percent from 2018.2021. The production increase was largelyprimarily due to shale and tight propertiesnet production increases in the Permian Basin in Texas and New Mexico.Basin.
The net liquids component of oil-equivalent production for 20192022 averaged 724,000888,000 barrels per day, up 173 percent from 2018.2021. Net natural gas production averaged 1.231.76 billion cubic feet per day in 2019, up 182022, an increase of 4 percent from 2018.2021.
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| Management's Discussion and Analysis of Financial Condition and Results of Operations | ||||||||
International Upstream
| Millions of dollars | 2019 | 2018 | 2017 | Millions of dollars | 2022 | 2021 | 2020 | |||||||||||||||||||||||||
Earnings* | $ | 7,670 | $ | 10,038 | $ | 4,510 | ||||||||||||||||||||||||||
Earnings (Loss)* | Earnings (Loss)* | $ | 17,663 | $ | 8,499 | $ | (825) | |||||||||||||||||||||||||
*Includes foreign currency effects: | $ | (323 | ) | $ | 545 | $ | (456 | ) | *Includes foreign currency effects: | $ | 816 | $ | 302 | $ | (285) | |||||||||||||||||
International upstream reported earnings were $7.67of $17.7 billion in 2019,2022, compared with $10.04$8.5 billion in 2018. Lower crude oil and natural gas2021. The increase was primarily due to higher realizations of $1.4$10.0 billion, lower operating expenses, lower depreciation, depletion and amortization related to end of concessions in Indonesia and Thailand of $1.3 billion and $830 million, respectively, wereasset sale gains of $220 million. This was partially offset by lower depreciationsales volumes of $1.3 billion (also largely associated with the end of concessions in Indonesia and tax expenses of $560 millionThailand) and $280 million, respectively. There were also a number of special items that largely offset each other in 2019 and 2018. Included in 2019 earnings were items totaling $800 million for write-offswrite-off and impairment charges of $2.2 billion associated with Kitimat LNG and other gas projects partially offset by a gain of $1.2 billion on the sale of the U.K. Central North Sea assets and a benefit of $180 million related to a reduction in the corporate income tax rate in Alberta, Canada. Offsetting these items were the absence of 2018 special items of $920 million associated with impairments, write-offs, a receivable write-down and a contractual settlement.$1.1 billion. Foreign currency effects had an unfavorablea favorable impact on earnings of $868$514 million between periods.
The company’s average realization for international crude oil and natural gas liquids in 20192022 was $58.14$90.71 per barrel compared with $64.25$64.53 in 2018.2021. The average natural gas realization was $5.83$9.75 per thousand cubic feet in 20192022 compared with $6.29$5.93 in 2018.2021.
International net oil-equivalent production was 2.131.82 million barrels per day in 2019, essentially unchanged2022, down 7 percent from 2018. Production increases from Wheatstone2021. The decrease was primarily due to lower production following expiration of the Erawan concession in Thailand and major capital projects were offset by normal field declines and the impact of asset salesRokan concession in 2019.Indonesia.
The net liquids component of international oil-equivalent production was 1.14 million831,000 barrels per day in 2019, down 22022, a decrease of 13 percent from 2018.2021. International net natural gas production of 5.935.92 billion cubic feet per day in 2019 increased 12022, a decrease of 2 percent from 2018.2021.
U.S. Downstream
| Millions of dollars | 2019 | 2018 | 2017 | Millions of dollars | 2022 | 2021 | 2020 | |||||||||||||||||||||||||
| Earnings | $ | 1,559 | $ | 2,103 | $ | 2,938 | ||||||||||||||||||||||||||
| Earnings (Loss) | Earnings (Loss) | $ | 5,394 | $ | 2,389 | $ | (571) | |||||||||||||||||||||||||
U.S. downstream earned $1.56reported earnings of $5.4 billion in 2019,2022, compared with $2.10$2.4 billion in 2018.2021. The decreaseincrease was primarily due to lowerhigher margins on refined product sales of $300 million,$4.4 billion, partially offset by lower equity earnings from the 50 percent-owned CPChem of $140$790 million and higher depreciation expenseoperating expenses of $100$790 million, following first production at the new hydrogen plant at the Richmond refinery.largely due to planned turnarounds.
Total refined product sales of 1.251.23 million barrels per day in 2019 were up 32022 increased 8 percent from 2018.2021, mainly due to higher renewable fuel sales following the REG acquisition and higher jet fuel demand.
International Downstream
| Millions of dollars | 2019 | 2018 | 2017 | Millions of dollars | 2022 | 2021 | 2020 | |||||||||||||||||||||||||
Earnings* | $ | 922 | $ | 1,695 | $ | 2,276 | Earnings* | $ | 2,761 | $ | 525 | $ | 618 | |||||||||||||||||||
*Includes foreign currency effects: | $ | 17 | $ | 71 | $ | (90 | ) | *Includes foreign currency effects: | $ | 235 | $ | 185 | $ | (152) | ||||||||||||||||||
International downstream earned $922$2.8 billion in 2022, compared with $525 million in 2019, compared with $1.70 billion in 2018.2021. The decreaseincrease in earnings was mainly due to lowerhigher margins on refined product sales of $570$2.7 billion and a favorable swing in foreign currency effects of $50 million lower gains on asset sales of $300 million, primarily due to the absence of the 2018 gains from the southern Africa asset sale,between periods, partially offset by favorable tax itemshigher operating expenses of $100 million. Foreign currency effects had an unfavorable impact on earnings of $54$650 million, between periods.largely due to transportation costs.
Total refined product sales of 1.331.39 million barrels per day in 20192022 were down 8up 5 percent from 2018, primarily2021, mainly due to higher jet fuel demand as travel restrictions associated with the sale of the southern Africa refining and marketing business in third quarter 2018.COVID-19 pandemic continue to ease.
All Other
| Millions of dollars | 2019 | 2018 | 2017 | Millions of dollars | 2022 | 2021 | 2020 | |||||||||||||||||||||||||
Net charges* | $ | (2,133 | ) | $ | (2,290 | ) | $ | (4,169 | ) | Net charges* | $ | (2,974) | $ | (3,107) | $ | (3,157) | ||||||||||||||||
*Includes foreign currency effects: | $ | 2 | $ | (5 | ) | $ | 100 | *Includes foreign currency effects: | $ | (382) | $ | (181) | $ | (208) | ||||||||||||||||||
All Other consists of worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities, and technology companies.
Net charges in 20192022 decreased $157$133 million from 2018.2021. The change between periods was mainly due to receipt of the Anadarko merger termination fee,lower pension settlement expense, loss on early debt retirement and lower interest expense, partially offset by the absence of 2021 favorable tax items and higher tax items.interest income. Foreign currency effects decreasedincreased net charges by $7$201 million between periods.
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| Management's Discussion and Analysis of Financial Condition and Results of Operations | ||||||||
Consolidated Statement of Income
Comparative amounts for certain income statement categories are shown below. A discussion of variances between 20182021 and 20172020 can be found in the “Consolidated Statement of Income” section on pages 34 through 3639 and 40 of the company’s 20182021 Annual Report on Form 10-K.
| Millions of dollars | 2022 | 2021 | 2020 | |||||||||||||||||
| Sales and other operating revenues | $ | 235,717 | $ | 155,606 | $ | 94,471 | ||||||||||||||
| Millions of dollars | 2019 | 2018 | 2017 | |||||||||
| Sales and other operating revenues | $ | 139,865 | $ | 158,902 | $ | 134,674 | ||||||
Sales and other operatingoperating revenues decreasedincreased in 20192022 mainly due to lowerhigher refined product, crude oil, and natural gas prices and lower crude oil andhigher refined product sales volumes.
| Millions of dollars | 2022 | 2021 | 2020 | |||||||||||||||||
| Income (loss) from equity affiliates | $ | 8,585 | $ | 5,657 | $ | (472) | ||||||||||||||
| Millions of dollars | 2019 | 2018 | 2017 | |||||||||
| Income from equity affiliates | $ | 3,968 | $ | 6,327 | $ | 4,438 | ||||||
Income from equity affiliates decreasedimproved in 20192022 mainly due to lowerhigher upstream-related earnings from Tengizchevroil in Kazakhstan Petroboscan and Petropiar in Venezuela,Angola LNG and lowerhigher downstream-related earnings from GS Caltex in South Korea. In addition, two upstream affiliates were written-down in 2019.
Korea, partially offset by lower earnings from CPChem. Refer to Note 13, beginning on page 71,15 Investments and Advances for a discussion of Chevron’s investments in affiliated companies.
| Millions of dollars | 2019 | 2018 | 2017 | Millions of dollars | 2022 | 2021 | 2020 | |||||||||||||||||||||||||
| Other income | $ | 2,683 | $ | 1,110 | $ | 2,610 | Other income | $ | 1,950 | $ | 1,202 | $ | 693 | |||||||||||||||||||
Other income increased in 20192022 mainly due to a favorable swing in foreign currency effects, higher interest income and lower charges associated with the receiptearly retirement of the Anadarko merger termination fee and higher gains from asset sales,debt, partially offset by unfavorable swings in foreign currency effects.lower gains on asset sales.
| Millions of dollars | 2019 | 2018 | 2017 | Millions of dollars | 2022 | 2021 | 2020 | |||||||||||||||||||||||||
| Purchased crude oil and products | $ | 80,113 | $ | 94,578 | $ | 75,765 | Purchased crude oil and products | $ | 145,416 | $ | 92,249 | $ | 52,148 | |||||||||||||||||||
Crude oil and product purchases decreased $14.5 billionincreased in 2019,2022 primarily due to lowerhigher crude oil, volumesnatural gas, and prices, and lowerrefined product prices and volumes.prices.
| Millions of dollars | 2019 | 2018 | 2017 | Millions of dollars | 2022 | 2021 | 2020 | |||||||||||||||||||||||||
| Operating, selling, general and administrative expenses | $ | 25,528 | $ | 24,382 | $ | 23,237 | Operating, selling, general and administrative expenses | $ | 29,026 | $ | 24,740 | $ | 24,536 | |||||||||||||||||||
Operating, selling, general and administrative expenses increased $1.1 billion in 2019. The increase is mainly2022 primarily due to higher servicestransportation expenses, early contract termination charge at Sabine Pass and fees, materials and supplies expense and higher transportation expense, partially offset by the absence of a 2018 receivable write-down and contractual settlement.costs associated with planned refinery turnarounds.
| Millions of dollars | 2019 | 2018 | 2017 | Millions of dollars | 2022 | 2021 | 2020 | |||||||||||||||||||||||||
| Exploration expense | $ | 770 | $ | 1,210 | $ | 864 | Exploration expense | $ | 974 | $ | 549 | $ | 1,537 | |||||||||||||||||||
Exploration expenses in 2019 decreased2022 increased primarily due to lowerhigher charges for well write-offs, partially offset by higher geological and geophysical expenses.write-offs.
| Millions of dollars | 2019 | 2018 | 2017 | Millions of dollars | 2022 | 2021 | 2020 | |||||||||||||||||||||||||
| Depreciation, depletion and amortization | $ | 29,218 | $ | 19,419 | $ | 19,349 | Depreciation, depletion and amortization | $ | 16,319 | $ | 17,925 | $ | 19,508 | |||||||||||||||||||
Depreciation, depletion and amortization expenses increaseddecreased in 2019 mainly2022 primarily due to higher impairments,lower rates and lower production, and well write-offs, partially offset by lower rates.higher impairment and write-off charges.
| Millions of dollars | 2019 | 2018 | 2017 | Millions of dollars | 2022 | 2021 | 2020 | |||||||||||||||||||||||||
| Taxes other than on income | $ | 4,136 | $ | 4,867 | $ | 12,331 | Taxes other than on income | $ | 4,032 | $ | 3,963 | $ | 2,839 | |||||||||||||||||||
Taxes other than on income decreasedincreased in 2019 mainly2022 primarily due to lower local and municipalhigher taxes and licenses as a result of the company’s divestment of its downstream interest in southern Africa in third quarter 2018,on production, partially offset by higher U.S. state carbon emissions regulatory expenses.lower excise taxes.
| Millions of dollars | 2019 | 2018 | 2017 | Millions of dollars | 2022 | 2021 | 2020 | |||||||||||||||||||||||||
| Interest and debt expense | $ | 798 | $ | 748 | $ | 307 | Interest and debt expense | $ | 516 | $ | 712 | $ | 697 | |||||||||||||||||||
