Chevron 2010 Corporate Responsibility Report

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Learn more about how Chevron is doing in important areas of our corporate responsibility (C.R.) efforts in our latest C.R. Report.

Learn more about how Chevron is doing in important areas of our corporate responsibility (C.R.) efforts in our latest C.R. Report.

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  • 1. 2010 Corporate Responsibility Report
  • 2. Welcome3 4 10 14A Message Australia: Angola: California,From Our CEO A Natural Partnership Partnerships United States: The Gorgon Project and Possibilities Finding Common shows how energy Sustainable programs Ground in Richmond development and the in Angola will improve The Richmond environment coexist. the quality of life. Refinery works with the community to Climate Change 7 Social Investments 13 identify and address Executive Interview 9 local needs. The Environment 17On the Cover: Marine biologists Anthony Bougher (left) and Luke Skinner conduct an intertidal surveyin the Indian Ocean adjacent to the site of Chevron’s Wheatstone Project, which will process natural gasfrom fields offshore Western Australia.
  • 3. Partnering for Shared Progress We believe that business and society are interdependent. This belief drives our commitment to partnership to create mutual benefit, or shared progress. At Chevron, partnership is a value that we honor every day, wherever we operate, from our business to our social investments. We welcome your feedback. Thank you for your interest in Chevron.18 22 28 32 36Kazakhstan: U.S. Gulf of Mexico: Nigeria: Indonesia: AdditionalSea of Opportunity Oceans of Promise Healthy Employees, Cultivating InformationOur longstanding part- Our culture promotes Healthy Community Gotong Royong and Datanership with Kazakhstan safe operations, resulting In Nigeria, we work We provide economic Performance Datacontributes to economic in a safety record that with partners to combat opportunities for GRI and API/IPIECA Indexand social change. leads the industry. disease, and our efforts Indonesians through our Assurance Statement are making a difference. operations and support GlossaryDiversity 21 Operating With for local initiatives. About This Report Excellence 25 Human Rights 31 Renewable Energy 35 Executive Interview 27 1
  • 4. ‘Business and community partnerships that emphasize economic progress can help set countries on a better course.’
  • 5. A Message From Our CEOShared Progress We recognize that business success is deeply linked toEnergy is essential to human progress — it creates jobs, fuels society’s progress. Our investments in communities —innovation and powers virtually every element of the global developed in partnership with those communities — alsoeconomy. Providing that energy safely, reliably and economi- are investments in the long-term success of our company.cally is a great responsibility that we take seriously. We are This approach delivers mutual benefit and shared progress.proud that 2010 was the safest year in our company’s history, In 2010, we invested $197 million in our communities, moregiving us one of the best records for safety in our industry. than twice the amount we invested in 2006.Over the past few decades, our industry has changed We make community investments in the three areas thatdramatically. New technology and advanced skills have we believe are the foundation of working societies thecombined to unlock new production and growth in geologic world over — health, education and economic development.areas once beyond our reach. Our investments in health focus on training, testing and treatment for such diseases as HIV/AIDS, tuberculosis andOne of these frontiers, deepwater production, experienced malaria, which are critical economic and public health chal-a tragedy in the U.S. Gulf of Mexico, resulting in loss of lenges in some of our largest operating areas.precious life. It also took a toll on the economy and theecology of the Gulf Coast. Following the BP Macondo Business and community partnerships that emphasizeincident, Chevron led the joint-industry task force to raise economic progress can help set countries on a bettereven higher standards for deepwater operations across the course. One such investment is the Niger Delta Partnershipindustry. The incident reinforced our own safety imperative Initiative, launched in 2010 — an innovative, multipartnerto reach our goal of zero incidents wherever we operate. effort to promote economic development, conflict resolutionToward that goal, all of our projects are guided by our and capacity building. Our initial commitment is $50 million.strong safety culture. We leave nothing to chance becausewe have a deep, personal stake in operating safely — to Our investments in education can strengthen communities.sustain the public’s trust in our operations, to bring our As part of our California Partnership initiative, for example,employees safely home and to deliver value to those who we’ve teamed up with leading educational nonprofits toinvest in us. Our success rests on a culture true to our create opportunities in critical STEM subjects — science,Chevron Way values — getting results the right way. technology, engineering and math — for underserved students. In 2010, we reached more than 245,000 studentsCorporate responsibility at Chevron begins with safe opera- and 3,900 teachers in California.tions, but it doesn’t end there. Through multistakeholder collaboration, such as the Voluntary Principles on Security and Human Rights, we are promoting respect for global human rights. To empha- size the importance of our own commitment, in 2010 we developed plans and provided resources to implement our global Human Rights Policy. As you’ll read in this report, our community investments have increased, our partnerships are stronger and our impact is greater. These successes demonstrate shared progress for business and communities. John S. Watson Chairman of the Board and Chief Executive Officer May 2011 3
  • 6. Australia: A Natural Partnership A nature reserve is an unlikely site for a major new energy plant, but Chevron is showing how it can work. Barrow Island, offshore Western Australia, is the site of the Gorgon natural gas project. Chevron has been safely producing oil for more than 45 years on Barrow.4
  • 7. $56 10,000 No. 1billion jobs in size, the Gorgon CO2-injection project(AU$65 billion) will be will be created at peak is expected to be thecontributed to Australia’s construction world’s largestgross domestic product
  • 8. Barrow Island, a Class A nature Reducing Emissions 70%reserve off Australia’s west coast, Natural gas is the cleanest-burningwill be home to the Gorgon Project, fossil fuel. Gorgon will include thewhich will tap into vast natural gas world’s largest carbon dioxide– (CO2-)resources 43.5 miles (70 km) north- injection project, which will injectwest of the island. The island’s rich of construction con- 40 percent of the project’s GHGand unique biodiversity has remained emissions underground. This will makeintact since naturalist John Thomas tracts for workforce Gorgon one of the world’s least GHG-Tunney’s writings secured its designa- housing will go to firms intensive LNG facilities. The injectiontion as a wildlife refuge a century ago. in Western Australia project will separate the CO2, a naturalIts conservation is a national priority. component of produced gas, and inject it 1.6 miles (2.6 km) beneath the islandChevron is no stranger here, having into a deep sandstone reservoir. Thesuccessfully operated on Barrow for Australian government is a partnermore than 45 years while minimizing here, having contributed $51 mil-our footprint on the island. Building lion (AU$59 million) to the injectionon this environmental stewardship project as part of its Low Emissionsinvolves a mix of advanced technology Technology Demonstration Fund.and a commitment to detail, addressingeverything from greenhouse gas (GHG) The plan was recognized internation-emissions to local concerns over light ally by the Carbon Sequestrationlevels from our operations on Barrow’s Leadership Forum, a group ofnearby beaches where turtles lay 24 national governments and thetheir eggs. Our strong environmental European Commission. We willperformance has allowed us to expand share data from the project, whichoperations, resulting in a benefit to our will accelerate and enhance scien-business and the Australian economy. tific understanding of a technology Above: Environmental scientist some scientists believe could playStrengthening the Economy Daniel Joyce is at the site of the an important role in reducing globalAt $37 billion (AU$43 billion), the Wheatstone gas processing plant GHG emissions.Gorgon Project will be Chevron’s larg- in Western Australia.est investment, targeting 40 trillion Partnering With Residents ofcubic feet of gas. Gorgon represents Western Australiathe single biggest resource project Natural gas will be offloaded from We are taking steps to make surein Australia’s history. Independent Barrow Island as liquefied natural Gorgon benefits the residents ofconsulting firm ACIL Tasman estimates gas (LNG) and transported mostly to Australia, both economically andthat Gorgon will contribute $56 billion Asian markets, while gas for Western socially. Thus far, Gorgon has created(AU$65 billion) to Australia’s gross Australia’s consumption will be 4,000 jobs in Australia. At peak con-domestic product. More than $8 billion piped ashore. Gorgon precedes our struction, it will employ 10,000 people.(AU$9 billion) has already been com- Wheatstone Project, a second offshoremitted to companies in Australia — and natural gas project currently in the A $394 million (AU$458 million)total spending in Australia is targeted planning stages. construction village is being designedat $17 billion (AU$20 billion) over and built by a joint venture betweenfive years. Australia’s prime minister, Julia Gillard, companies in Australia — Thiess, Decmil toured the project site in March 2010 and Kentz. Thiess managing director“Many people don’t realize that and said, “Having been here and seen David Saxelby said a significant aspectthrough Gorgon, Chevron is providing Barrow Island and [the] Gorgon Project, of the contract was that it offeredopportunities and benefits on a scale it’s given me a real sense of the size enormous potential for local jobs,never seen before in this country,” said and scale of this project and what it is and up to 70 percent of the contractChevron Australia managing director going to mean to the nation’s future. . . . requirements would be sourced inRoy Krzywosinski. This is a great project for employment Western Australia. in this country.”6
  • 9. In 2009, Australia’s Ausco Modularwas laying off workers. In 2010, ithired 200 people to build offices, labsand control rooms worth $51 million(AU$59 million) for Gorgon. Already Climate Changesome 80 vessels, employing hundredsof workers, are supporting Gorgon’sdredging and the delivery of suppliesand materials. Gorgon’s CO2–injection project is one ofOther Australian companies have the many ways we are working to addressbenefited through hundreds of concerns about climate created in freight, construction,general utilities, accommodation, Now in its 10th year of implemen- energy companies for transpar-telecommunications and site prepara- tation, our Action Plan on Climate ency in monitoring and disclosuretion. Howard Porter, a local company, Change continues to guide our of our GHG emissions and carbonhad 70 employees building 300 trail- efforts in greenhouse gas (GHG) management practices.ers for Gorgon under a $17 million emissions reduction, improved(AU$20 million) contract that Porter energy efficiency, and research • As a member of the Global Gascalled the single biggest transport and development in innovative, Flaring Reduction Partnership, wemanufacturing order ever in West- low-carbon energy technologies. are working to minimize gas flar-ern Australia. ing and venting. As of late 2009 • Since 1992, we have reduced the in Kazakhstan, Tengizchevroil —Gorgon also is a magnet for talent. total energy consumption required in which Chevron is a 50 percentA recent Chevron employee meeting to perform all our business opera- partner — eliminated routinein Perth included many people who tions by 33 percent compared with flaring. In Nigeria, Angola andhad been on the job less than a week, the energy we would have used to elsewhere, we continue projectsbut that’s business as usual as the complete the same functions. to recover gas that would havecompany fills a new 13-story office been flared.tower with about 800 Gorgon workers. • We advise customers on energy efficiency improvements and • We deployed a new enterprise-Our collaborative approach played a renewable power, reducing their wide system for reporting GHGsignificant role in developing the native energy use by an average of emissions and energy efficiency,title agreements with the Kuruma nearly 30 percent. implemented a strategy to man-Marthudunera people in June 2010 age future carbon-market activityand the Yaburara Mardudhunera peo- • In 2010, the Carbon Disclosure growth, and conducted third-partyple in November 2010 for the Gorgon Project’s Leadership Index recog- verification of our GHG emissions.Project’s domestic gas pipeline. nized Chevron as a leader amongUnder the Chevron-operated GorgonProject Cultural Heritage Management For additional information on how we are addressing this issue, pleasePlan, Australian Aboriginal people visit involved to help the project avoidRight: Euros, or wallaroos (left), andperenties thrive on Barrow Island.Some native species now exist onlyon Barrow. 7
  • 10. heritage sites. “When we were To prevent invasive species andsurveying our country with the other pests from being brought ontocompany [Chevron], we came across the island, we have a rigorous andseveral important sites in the desig- expansive quarantine plan, whichnated construction area,” Kuruma Western Australia’s EnvironmentalMarthudunera spokesperson Cyril Protection Authority said “likelyLockyer said. “And after talking with represents the best practice inChevron, the result is that the com- the quarantine management of apany will build the pipeline around large operation.”these areas and not destroy thesesites. This type of working relationship Our quarantine management proce-will help us preserve our heritage for dure, in place for more than 45 years,future generations.” has improved over time. Goods being shipped through the Dampier sup-With our commitment to Aboriginal ply base are tagged with one of threeemployment, construction contrac- colors to make sure the requiredtors and others are encouraged to procedures are taken. Nothing ishire Aboriginal people. Additionally, shipped to Barrow without a greenwe are working to identify longer-term tag. At the Australian Marine Complexcareer opportunities. Peter Eggleston, in Henderson is a quarantine wash-Chevron Australia’s External Affairs Top: Ann Hayes, of the local Aboriginal down area resembling a huge parkingmanager, said, “We’re now very much Thalanyji group, accompanies Chevron lot and a giant shed big enough toa part of and are engaged extensively contract botanist Jerome Bull on a cover a football field. There’s also awith Aboriginal communities in the botanical and indigenous heritage larger-than-life hair dryer that cleansareas near our operations.” survey at the Wheatstone site. Bottom: vehicles and goods bound for the Equipment headed for Barrow Island is island. And the process doesn’t endBusiness and Nature Coexist shrink-wrapped during quarantining. when the freight is put on ships. At theBarrow Island, once attached to the island, inspectors can stop goods andcontinent of Australia, now lies about return them to the mainland on the43.5 miles (70 km) offshore, having We minimized the project’s footprint next barge. Today, Barrow is the onlybeen separated from the mainland on the island itself. The seismic survey island in the region free from intro-and becoming a sort of living ark. It of the underground geology where duced species such as cats, rabbits,is home to more than 350 species of CO2 will be injected was also modified. rats and mice.native plants, 14 species of mammals, A conventional survey, consisting of100 species of birds and 54 species of clearing paths to accommodate heavy Yet another environmental con-reptiles. Some of them are found no trucks that haul necessary equipment, sideration is the nighttime lightingother place on Earth. would have disturbed about 700 acres necessary for the new LNG plant. Four (283 ha). Instead, a freight helicopter species of sea turtles nest on Barrow,We have been working with Harry did most of the heavy lifting — approxi- and light can cause them and theirButler, Ph.D., one of Australia’s pre- mately 15,000 separate lifts — while hatchlings stress.mier conservationists, throughout lighter equipment was carried by foot.oil production and Gorgon develop- By the end, fewer than 47 acres (19 ha) Daniela Ratcheva, a senior envi-ment to minimize any impact to the were disturbed. ronmental engineer with Chevronisland ecology. Australia, delivered a detailed presen- Donna Parker, CO2-injection project tation to a conference in Queensland“Today, all the species I experienced manager, is one of those who are proud in September 2010. She demonstratedwhen I first visited Barrow Island in of the achievement. “This extraordi- how we engineered the plant’s lighting1963 remain,” he said. “When you have nary effort by all involved was vital to systems to not disturb turtles and toa world-class quarantine process sup- delivering baseline survey results and comply with the stringent environmen-ported by a workforce that truly cares maintaining our reputation as an envi- tal approval conditions and applicablefor the environment, this is what you ronmental champion of Barrow Island,” safety laws and standards while notcan achieve.” she said. compromising safe operability.8
  • 11. Executive InterviewWhat How WhenWhat is the biggest How are you addressing When will the Gorgon Projectchallenge that you face? that challenge? become a reality?By 2030, world demand for energy The development of Chevron’s Benefits already are being expected to grow by approximately world-class gas resources will provide Though production of natural gas33 percent — with Australia’s neigh- Australia and the countries receiving is not planned until 2014, billions ofbor, Asia, predicted to account for the project’s LNG with opportunities dollars in contracts have been awarded,60 percent of that growth. Chevron is to affect their greenhouse gas emis- putting people to work. Approximatelyfortunate to find itself in Australia, sur- sions. Compared with the use of coal 1,500 are employed on location onrounded by natural gas resources on to generate electricity, natural gas Barrow Island, and 4,000 acrossthe doorstep of the growing demand from the Gorgon Project will have the Australia are employed as a result ofin the region. The Gorgon Project alone same effect on global emissions as Gorgon. Those numbers will grow asis set to increase the supply of domes- removing two-thirds of the vehicles the project gathers pace.tic gas to Western Australia by about from Australian roads.30 percent. We must link energy supply The Greater Gorgon Area gas fieldsto energy demand while addressing Most supply-demand forecasts predict contain enough energy to power athe risks posed by climate change. that natural gas will play an integral city of 1 million people for 800 years. role in the energy mix as the world The Gorgon Project is long term and transitions to a lower-carbon future. will benefit generations to come. The Gorgon Project and Australia are set to be global leaders in the appli- cation of underground CO2-injection technology. We are committed to shar- ing information from the monitoring program at Gorgon to assist in building a greater understanding around this emerging and important technology.Roy Krzywosinski became managingdirector of Chevron Australia inJanuary 2008 and helped steer theGorgon Project to a final investmentdecision about 18 months later.Roy KrzywosinskiManaging Director, Chevron Australia 9
  • 12. 624,000 5,500 200,000 people were vaccinated farmers received safe blood transfusions against polio in Cabinda technical assistance were administered in December 2010 and almost doubled through Chevron’s their yields between support 2007 and 2009Chevron medical director in Angola, Dr. Ana Ruth Luis, consults at the company’sLuanda Clinic, which offers primary medical care to retirees, employees and theirdependents. Nuno Miquel Baptista is an X-ray technician at the clinic.10
  • 13. Angola:Partnershipsand PossibilitiesAngola’s South Atlantic coast, a land of rainforests, savannasand agricultural highlands, is rich in natural resources andpossibility. Our business operations and community partnershipsthere offer support to a population trying to improve itsinfrastructure and grow its economy.The Peace Agreement of April 2002 Following the Angola Partnership We are also pioneering businessmarked the end of a nearly 27-year Initiative model, we are working to programs for high school students.civil war that devastated the economy promote robust micro, small and Working with the National Instituteand increased Angola’s dependence on medium-size businesses outside the for Educational Research and Develop-the oil industry. As the country recov- oil industry. For example, we support ment and the United Nations Industrialers, Chevron has been responding to the Luanda Business Incubator, a pro- Development Organization, our $1 mil-community needs. Our investments in gram to strengthen the operational lion contribution in 2010 is helpinghealth, education and economic devel- and technical capabilities of service launch an entrepreneurship curriculumopment in Angola improve livelihoods providers. The program has trained for more than 2,000 students in nineand foster stable operating environ- more than 200 entrepreneurs in provinces. The Ministry of Educationments that contribute to our ability to business planning and helped create plans to roll out the curriculum nation-conduct business. 143 new jobs in 2010. wide, reaching 500,000 students by 2013.Partnering for Sustainable “To many Angolans, the conceptEconomic Growth of entrepreneurship is new and In 2010, with support from the Euro-In 2002, we launched the Angola needs nurturing,” said Eunice de pean Union, UNESCO and UNICEF,Partnership Initiative, with $25 million Carvalho, Policy, Government and we partnered with the Ministry ofand a commitment to address needs Public Affairs general manager for Education and donated $1.5 million tobeyond those near the vicinity of our Chevron in Angola. implement a teacher training program.operations, focusing particularly on Nearly 400 teachers and administra-regions most damaged by the war. tors attended. 11
  • 14. The ProAgro project, funded jointlyPartnership by Chevron and the U.S. Agency for International Development from 2006With the Global Fund through 2010, facilitated sustainable business relationships between produc- ers, banks, processors and distributorsChevron’s partnership saving lives and improving • About 380,000 people com- of cash crops. The project providedwith the Global Fund to health care in countries pleted voluntary HIV/AIDS technical assistance to more thanFight AIDS, Tuberculosis where we operate. counseling and testing. 5,500 farmers, who almost doubledand Malaria has helped • About 1 million malaria nets their yields between 2007 and 2009.improve the health and Through our first three were distributed.well-being of millions of years of investment inpeople in Africa and Asia. Global Fund grants in • More than 1 million rapid- Fighting DiseaseWe made an initial $30 mil- Angola, Nigeria, South diagnostic tests for malaria Since 2008, when we funded alion investment in the Africa, Thailand, Indonesia were distributed. $350,000 vaccination campaignGlobal Fund between 2008 and the Philippines, weand 2010. The Global Fund’s contributed to significant In 2010, we announced a in Uige and Cabinda provinces, weperformance-based funding results, including the commitment of an addi- have partnered with Angolan healthmodel and rigorous meas- following: tional $25 million to the authorities and UNICEF to provide vac-urement and evaluation Global Fund, raising our cinations against the wild poliovirus. • As many as 3.4 millionsystem have demonstrated six-year investment in the people were directlythat our investment has Global Fund to $55 million. reached through HIV/AIDS Through these campaigns and theyielded high-impact results, prevention programs. country’s other efforts, polio was thought to have been eradicated in Angola and neighboring Republic of the Congo for a decade. But in Novem-Promoting Economic Diversity ber 2010, an outbreak erupted inIn 2007, Chevron became a minor- Chevron is the largest Brazzaville, Congo. By December, itity partner in Banco Africano de had killed an estimated 220 people. foreign oil-industryInvestimentos Micro Finanças (BMF),formerly called NovoBanco. Since employer in Angola; We responded by sending peoplethen, BMF has made approximately and financial resources to prevent the 88%$54 million in loans to Angolan entre- disease from spreading into Angola,preneurs. From 2006 to 2010, BMF supporting an emergency campaignopened 10 branches in five Angolan that vaccinated 624,000 peopleprovinces, and in 2010, BMF provided in Cabinda in December 2010 and$9.9 million in loans to Angolan micro of Chevron’s employees donating $950,000 to the nationaland small entrepreneurs. Also in 2010, campaign to fight polio, specificallywe contributed $500,000 to expand in the country are for the provinces of Cabinda, Lunda-BMF’s operations in Cabinda. Angolans Norte, and Lunda-Sul. More than 15,000 Chevron employees, familyJoaquina Manuel, an entrepreneur members and contractors based inwho exemplifies the country’s opti- Cultivating Angola’s Fertile Land Cabinda province were vaccinated asmism, established a wholesale and While the country was once a recipi- part of the campaign.retail business in the 1980s, but a ent of global food assistance, Angola’snational currency crisis drove it into fertile soil, plentiful water, conducive Polio is just one of the diseases thatbankruptcy. She started over with a climate and hardworking farmers led our programs address.$3,000 loan. Success bred success, many donors to end support for food aidand additional loans allowed her to programs. But despite more of Angola’s “In the past 20 years, Chevron andexpand her business. farmers cultivating the land, most are partners have invested more than producing at a subsistence level. Still, $29 million in medical training and“These loans were like a rebirth for they have enormous potential to trans- treatment for and education aboutmy business,” said Manuel. form their operations into businesses. infectious diseases and in support for12
  • 15. blood banks and the construction ofhealth facilities all over the country,”said Dr. Ana Ruth Luis, Chevron’s medi-cal director in Angola. SocialWe remain committed to helpingstop the spread of disease through Investmentsunsafe blood. With our partners — theAngola Ministry of Health, the SafeBlood for Africa Foundation, and theU.S. Centers for Disease Control andPrevention — we established a safe Our success as a business is inextricablyblood program in Cabinda province.Our nearly 20 years of support for this linked to the well-being of our employees andblood bank has allowed for more than our communities.200,000 safe transfusions.Fighting malaria remains an important Social investments at Chevron Social Investment Spendingbattle in Angola. In 2010, we sponsored aim to foster economic stability In millionsthe first entomological course on and improve quality of life. They $197malaria in the country. Organized by the are delivered through partici-Global Business Coalition on HIV/AIDS, patory partnerships that build $156Tuberculosis and Malaria and by the foundations for positive, last- $144Corporate Alliance on Malaria in Africa, ing results. We invest in health, $119the course brought 41 health specialists education and economic devel- $91from all 18 provinces to learn mosquito opment — the building blocks ofcontrol techniques. In 2010, Cabinda’s strong communities.program treated 25,317 children underage 5 and 5,408 pregnant women. In 2010, we made $197 million in social investments to help build“It takes community action and effec- community programs around 06 07 08 09 10tive partnerships to fight a disease the world. YEAR 0 6 07 08 09 10like malaria,” said Alan Kleier, manag-ing director of Chevron’s SouthernAfrica operations in 2010. “We intendto continue working with the Ministry For additional information, please visit Health and other partners towardprevention and treatment.”Left: Prompted by Chevron’s localcontent program, NASA ComercialImportação e Exportação. Lda. partici-pated in supplier development trainingto support the oil and gas industry.Nascimento Alberto is the managingdirector of NASA. Right: JoaquinaManuel’s business was expanded withChevron-supported microfinancing. 13
  • 16. 97% 245,000 60% reduction in flaring at California students or more of the water the Richmond Refinery benefited from the Richmond Refinery has been achieved Chevron’s partnerships uses daily is treated since 2007 in 2010 or reclaimedThrough, Chevron provides funds to Nystrom Elementary School inRichmond, California. Here, students observe butterflies during a science project.14
  • 17. The century-old relationship between Chevronand the city of Richmond is on a new path tostrengthen the company and the community.California, United States:Finding CommonGround in RichmondChevron and the city of Richmond, “We listened to those concerns,” saidCalifornia, share a rich history that Mike Coyle, refinery general manager,stretches back more than a century. “and in 2008, we began efforts toThe refinery sits on about 2,900 acres strengthen local relationships. This is(1,174 ha) 15 miles (24 km) north- helping us overcome challenges thateast of San Francisco and was built affect our business and the community.”before Richmond was incorporatedin 1905. Richmond then was a small We commissioned an independentbut growing industrial area of about nonprofit organization to interview2,000 people. Today, it’s a city with community leaders. Coyle said thea diverse economy of industrial, tech- results proved enlightening. Among thenological and maritime businesses findings: Citizen groups and nonprofitand 103,000 residents. leaders felt that our community inter- actions had decreased and that peopleTogether — through booms and reces- were unaware of our long history ofsions, 19 U.S. presidents, and economic involvement. Many wanted us to beand social changes — the relationship more active in helping the city addressbetween the refinery and the people social and economic problems.of Richmond has evolved. Over thepast two decades, there has been a As a result, we are in the midst of angrowing interest in refinery activities. effort to renew and strengthen ourSome citizens have expressed concerns relationships. We meet regularly withabout insufficient communication on residents and leaders, and based onissues such as community support, their input, we’ve invested in job crea-emissions and flaring. tion, public safety and K–12 education. 15
  • 18. Contra Costa Unified School District. “There’s a deep connection between Chevron and our students. Working together on science, math, engineering and other programs, we’re changing the student culture to raise expecta- tions so that our students see college as the next step after high school.” Harter said program support instills a sense of optimism that can start with something as simple as new micro- scopes. Science teacher CatherineChevron Humankind Vanier needed lab materials to teach cellular biology to her seventh grade students at Richmond’s Lovonya DeJean Middle School. With the helpOur employees are active in Throughout our opera- began in 2008, 19,000nonprofits that strengthen tions in the United States, participants plus com- of Chevron’s Fuel Your School programcommunities where we live employees participate in pany matches contributed and, Vanier wasand work. In Richmond, for Chevron Humankind, the more than $74 million able to buy the sorely needed sup-example, we mentor high company’s U.S. employee to support more than plies. In addition, the school receivedschool students interested and retiree giving and 12,000 nonprofits. a $25,000 Chevron classroom science, engineering, volunteer program. Contri-math and other technical butions made to nonprofits Above: Chevron employee As a result, Chevron “has made acareers; serve meals at through the program are Brent Tippen volunteers significant difference in the educationlocal homeless shelters; generally matched dollar in a class to teach English of our students for years to come,”and participate in commu- for dollar by the company. as a second language in Vanier said.nity improvement projects. Since Chevron Humankind Richmond. Our focus on supporting STEM (science, technology, engineering and math) education in California has resulted inWe also increased transparency. We more than 245,000 students and 3,900 70%responded to the call for information teachers benefiting from our commu-by creating public communications nity programs in 2010.platforms, and for the first time in30 years, we held an open house andtour to allow the community to see our reduction Another priority that residents voiced was economic opportunity. Chevronoperations for themselves. The com- in regulated air responded by supporting nonprofitmunity had the opportunity to engage emissions has been organizations that increase localwith us directly, and we could clarify achieved at the refinery employment.misconceptions about our operations. For example, we awarded the non-Investing in Our Community in 2010 to nonprofits in Richmond and profit Stride Center a $211,000 grantIn West Contra Costa County, unem- the county for education, youth leader- in 2009 to create a job-trainingployment is more than 18 percent. ship programs, economic development program. David Benjamin, once anTwenty-two percent of families in and job training. But our investment in unemployed high school dropout, nowRichmond have incomes below the the community goes beyond financial has a promising future in technologyU.S. federal poverty level, and 40 per- contributions. after receiving computer training fromcent of adults did not graduate from the center. “I wasn’t doing too muchhigh school. “Support from Chevron and its volun- with my life and was in and out of trou- teers comes with accountability and ble,” he explained. Now, he said, he’ll beTo help the community address these an expectation of mutual benefit,” said qualified for jobs in computer technicalchallenges, we granted $3.7 million Bruce Harter, superintendent of West support and software installation.16
  • 19. The Environment Our efforts to reduce flaring and increaseAbove: The marshland at the refinery is a nourishing habitat for protected and water efficiency inendangered species. Great blue herons (left), egrets and mallards are some of Richmond illustrate ourthe animals that make it their home. continued commitment to minimize pollution and waste, conserveImproving Operations enough drinking water to serve about natural resources, andWe continually strive to minimize air a quarter of Richmond’s population reduce the environ-emissions and waste, use resources and could reduce severe rationingand energy efficiently, and minimize in future droughts. “This coopera- mental impact of ourenvironmental impact. tive effort,” said Lesa McIntosh, an operations. elected board director of EBMUD,The Richmond Advanced Recycled “will benefit water customers well Across the company, we devel-Expansion (RARE) Water Project is into the future.” oped a corporate environmentalone example of our collaborative stewardship process that pro-approach. In drought-prone California, Refinery air emissions have been a vides a consistent, systematic,fresh water has always been a valu- source of concern for the community. risk-based approach to manag-able commodity. Population growth By installing new technologies and run- ing aspects of the environment,and stringent environmental regula- ning plants more efficiently, we have including air, water, biodiversitytions have increased its value. Water reduced regulated air emissions by and also an essential component in oil 70 percent since the 1970s. A refinery-refining, with each gallon of oil refined wide flare-minimization program that For example, in 2010, we devel-requiring one gallon of high-quality began in 2007 has helped decrease oped an integrated, corporatewidewater. We are the San Francisco flaring by more than 97 percent. As the freshwater management planBay Area’s largest refinery and thus region’s largest refinery, the Richmond to enhance current activities onthe largest water customer for the Refinery represents approximately water stewardship.East Bay Municipal Utility District 38 percent of oil refining capacity in(EBMUD), requiring about 11 million the Bay Area but less than 1 percentgallons a day. of the volume of vented gas flared in 2009.To reduce water use, the refinery and To learn more about our environ-EBMUD completed a plant in 2010 to While we have made progress, there is mental stewardship, please visittreat municipal wastewater for our still work to be done. “Reestablishing boilers. Each day, a strong relationship and trust won’tRARE sends 3.5 million gallons of happen overnight, and we are deeplytreated wastewater to the refinery, committed to fulfilling that goal,” Coylein addition to the 4 million gallons said. “We’ve recently taken some sig-of reclaimed water already used in nificant steps, but this commitment is athe refining process. RARE saves marathon, not a sprint.” 17
  • 20. Kazakhstan:Sea of OpportunityIn 1979, geologists discovered a 1-mile-thick (1.6-km) oil fieldnear the windswept Caspian Sea. They named it “Tengiz,”Kazakh for “sea,” a fitting description considering its locationand potential.Today, Chevron is Kazakhstan’s “If you want to do business here, or A Commitmentlargest private oil producer, holding anywhere else, you have two respon- to Human Potentialstakes in the nation’s two biggest sibilities — business and community,” Longtime Kazakhstani employees stilloil-producing projects — the Tengiz said Jay Johnson, president of talk about adapting to Chevron’s busi-and Karachaganak fields. We hold a Chevron Europe, Eurasia and Middle ness and engineering standards. Berik50 percent interest in Tengizchevroil East Exploration and Production Ltd. Dyussenov, TCO’s Health, Environment(TCO), which operates the supergiant “We satisfy both by encouraging our and Safety coordinator, said stand-Tengiz Field. Kazakhstani employees to continue ards today are more stringent than to develop their skills. That is why we what he saw during Tengiz’s infancy.Our commitment to the region began work closely with local schools and uni- Chevron’s decision “to partner within 1993 with the formation of TCO and versities. As the community benefits, Kazakhstan on the Tengiz project wasthe five-year, $50 million Atyrau Bonus so does our business.” made shortly after Kazakhstan’s inde-Fund that developed infrastructure pendence,” he said. “The partnershipprojects. Since then, we have continued At year-end 2010, 85 percent of TCO’s brought new opportunities to us work-to cultivate opportunities that result workforce was Kazakhstani. TCO spent ing in Tengiz and contributed greatly toin economic and social change for nearly $1.35 billion on Kazakhstani our country’s economy.”many Kazakhstanis. Our business is services and materials. Ongoing train-enhanced by strong local suppliers and ing and education programs contributea skilled workforce. to the high number of Kazakhstan citizens among TCO’s workforce and in leadership positions.18
  • 21. 85% 23 $645 of Tengizchevroil’s workforce in 2010 was technical universities in Kazakhstan were million Kazakhstani introduced to an energy has been spent by efficiency course Tengizchevroil on social developed by Chevron programs since 1993Gulbarshyn Matniyazova (left) and Kulyan Zhangutty are participants and trainers in theChevron-sponsored Kazakhstan Artisan Business Development Program. Here, they arecreating felt souvenirs for the Olympic Council of Asia’s 2011 Winter Games. 19
  • 22. intern explored ways to improve the injection performance for disposing of the field’s wastewater. “My internship helped me apply the theoretical knowledge I obtained in college and expand my under- standing of petroleum engineering,” said Texas A&M graduate Merey Shinikulova, now a TCO production engineer. “I worked on interest- ing and challenging projects, andUniversity Partnership Program I was impressed that my projects were actually used after I left the internship.”Chevron’s University In the United States, United Kingdom. FurtherPartnership Program we support more than efforts are under way to Of the 12 new reservoir manage-engages with key universi- 75 schools in areas critical finalize partnerships with ment employees in 2010, 11 cameties throughout the world to our energy future, such universities in Angola and from the program. Three of themby providing scholarships, as engineering, earth to explore partnerships in completed master’s degrees atgrants and employee science, finance, infor- Poland and Bangladesh. the Colorado School of Mines withinvolvement. Through these mation technology and We also pair programs atefforts, we have provided environmental science. world-class institutions with funding from Chevron’s Universityapproximately $18 million in These programs include less developed ones in order Partnership Program.funding per year, support- efforts to increase minority to strengthen the facultying research and academic participation. and curriculum of the less Supporting Businessexcellence to help develop developed programs. Developmentthe professionals needed Internationally, we focusin the energy industry. We our involvement in locations Above: The student chapter Fostering emerging small businessesconsider these educational of our strategic operations, of the KazNTU Society of and suppliers is an important goalpartnerships also to be including Indonesia, West- Petroleum Engineers plans that we and our government andstrategic investments in ern Australia, Kazakhstan, for the 8th International Oil nongovernment partners share.local communities. Thailand, Brazil and the and Gas Youth Forum in 2011. Since 1997, TCO has provided more than $7.8 million to small business development loan programs that have helped entrepreneurs in agri-During his career, Dyussenov visited Development. This new course was culture, catering, and medical andChevron facilities across the United introduced to all 23 technical univer- community services.States and Canada and credits Chevron sities in Kazakhstan.programs for offering Kazakhstani Jay Johnson cited Byelkamit, a localspecialists an opportunity to receive In 2010, TCO began working with company that has been workingstate-of-the-art training and learn best Kazakhstan’s Bolashak (“future” with TCO since 1997. In addition topractices in environmental safety. in Kazakh) program, which allows numerous other projects in 2009, talented students to study abroad Byelkamit was the prime contractorOur program at the Kazakh National with full government scholarships. on a large fixed-roof crude-oil storageTechnical University (KazNTU) Mike Sullivan, a reservoir surveillance tank and employed 600 local workersstarted in 2007 and has provided coordinator, began an aggressive at peak construction. Prior to thisscholarships for 150 graduate and program to recruit Bolashak students project, a Kazakhstani contractor hadundergraduate students. Working with for internships. never built a tank this large, a newthe university and international and capability for the country’s industry,local environmental nongovernmental Students were paired with senior developed with TCO’s help.organizations, we introduced a major mentors at TCO and were givenaddition to the country’s curriculum: a problem that required original “We prefer to buy locally wheneverEnergy Efficiency and Sustainable research to solve. For example, one we can,” said Johnson. “Byelkamit20
  • 23. produces high-quality equipment tointernational standards, delivers itsproducts reliably and sells them atcompetitive prices.” DiversityFueling Social ProgramsSince 1993, TCO has invested morethan $645 million in social programsin the Atyrau Oblast. In 2010, TCO We need the diverse talents and fullspent $20 million on its Egilik (Kazakhfor “benefit”) social infrastructure potential of every individual employee inprogram, and Karachaganak Petroleum order for Chevron to excel as a leader inOperating, in which Chevron holds a20 percent interest, also contributed the global marketplace. We recognize the$20 million to social programs in the benefits of maintaining a workforce thatWestern Kazakhstan Oblast. reflects the composition of the communitiesWe and our affiliates have continually where we operate.supported health programs, includingcurrent efforts to combat high rates Our commitment to diversity and • We encourage managers andof cardiovascular disease, a leading inclusion is more than words, more selection teams to hire from acause of death in Kazakhstan. than a set of goals. Our actions diverse slate of candidates who speak for themselves. represent a range of backgrounds.The Kazakhstan Association ofFamily Physicians and TCO are part- • Approximately 22,500 Chevron • We have a robust suppliernering to educate the local medical employees participate in Employee diversity program. In 2010 in thecommunity and public about how to Networks, which help eliminate United States, we spent moreprevent cardiovascular disease. In barriers, improve communication than $2 billion on products andone program, more than 100 doctors among employees and cultivate services from small businesses.are being trained to diagnose and links with communities. We spent $364 million on productsimprove treatment. Another program, and services from women-ownedfor doctors at the Atyrau Cardiovas- • Diversity councils help promote a businesses, and $254 millioncular Hospital, provided mentoring work environment in which every on products and services fromby surgeons from the Astana Cardio- employee has the opportunity to minority-owned businesses.vascular Center. contribute to company goals.Left: In 2010, TCO funded cardio- For additional information, please visit disease training for Atyraudoctors at the Astana CardiovascularCenter. Here, radiography surgicalnurse Aizhan Saurbekova assists dur-ing a medical test. Right: At Chevron’spolyethylene pipe plant in Atyrau, allemployees are Kazakhstan nationals.Chevron plans to build a new plantin Atyrau to produce valves thatcurrently have to be imported. Fromfront to back are operator MaratImangaliev, manufacturer’s representa-tive Jorg Kahl and operator AlimzhanKuanshaliyev. 21
  • 24. Chevron is a recognized leader in deepwater drilling. Our success inthe deepwater Gulf of Mexico began more than 10 years ago when wetapped the Genesis Field 2,600 feet (792 m) below the water’s surface.Throughout that time, we have continued to drill safely by combining ourtechnological know-how with a proven organizational culture of safetythat begins with management and extends to employees and contractors.U.S. Gulf of Mexico:Oceansof Promise22
  • 25. 2010 13,000 27% was another year with Chevron employees is the approximate no recordable incidents live and work in the amount of U.S. oil supply for Chevron’s Gulf of Gulf States that is produced in the Mexico shorebase and Gulf of Mexico maritime transportation operationsTransocean’s Discoverer Clear Leader is on lease to Chevron in the Gulf of Mexico.Workers are seen here on the drillship’s helipad. 23
  • 26. Below the earth’s surface under in 2010 after the BP Macondo wellmore than 2,000 feet (610 m) of incident in the Gulf of Mexico. “Chevron 375water rests a vast promise of global will adopt any new standards it doesn’tenergy. Below this depth, the global already apply.” He also stressed ouroil industry tripled its offshore capacity commitment “to advancing safe opera-to 5 million barrels a day in the past tions through enhanced prevention,decade and ultimately could double better well containment and interven- deepwater wells havethat number by 2015. In the United tion, and improved spill response.”States, production in the outer conti- been drilled safely bynental shelf, almost all of which is in Chevron around the Practicing Safetythe Gulf of Mexico, currently accounts In 2010, the company had a record-low world since 1987for 27 percent of the nation’s oil and injury and illness rate.15 percent of its natural gas. “At Chevron, one goal overrides allWhile offshore resources hold the others: making sure everyone goespromise of energy and profit, there are home safe every day,” Watson said.risks that have to be addressed. One example of our safety culture“We know we can only operate with is our regularly held “safety stand-the public’s confidence that the energy downs” with drilling personnelwe need will be produced safely and and rig crews to reinforce safetyreliably,” said Chevron Chairman and practices. We share these exten-CEO John Watson. “We have a very sive reviews of drilling processes,personal stake in operating safely well-control contingency plans andbecause it is our home, too.” risk management plans across our global operations.One Team, One GoalOur commitment to safe drilling Since 1987, we have safely drilledbegins with a corporatewide dedica- 375 deepwater wells around thetion to operational excellence. This Above: Drilling engineer Jeremy Sokol world. Deepwater drilling is par-emphasis translates into specific (left) and subsea operations engineer ticularly challenging because of theprograms and standards, such as Zachary Schneider do a routine safety pressures involved, but our expertiseempowering workers to stop work walk on the Discoverer Clear Leader. with blowout prevention was evidentwhenever they sense potentially during the task force work. A blowoutunsafe operations, thus creating lay- preventer (BOP) is a series of valvesers of protection in drilling practices, while the reservoir itself is more than that prevent a well’s fluids from escap-well design and construction. 23,000 feet (7,010 m) below the water’s ing from the well. We have an in-house surface. Our team had to upgrade eight team of employees dedicated solely toDavid Payne, Chevron’s vice president separate technologies just to finish understanding BOPs and subsea wellof Drilling and Completions, said, “We its test well. interventions. We also operate ouraddress anticipated risks before we own well-control school, have drillingstart, and we’re prepared to handle any In 2010, we helped lead the joint- specialists overseeing every major wellothers that come up during drilling.” industry task force that made recom- and constantly partner with suppliers mendations to the U.S. Department of on equipment quality. And we have theThis approach was crucial at the the Interior to raise industry stand- only operator-owned cement lab inTahiti Field. Discovered in 2002, ards on offshore equipment, operating North America.Tahiti, which is estimated to contain procedures and subsea well control to400 million to 500 million barrels of even higher levels. Operating a deepwater rig costs moreoil-equivalent recoverable reserves, than $1 million a day, and activat-represented a complex and dramatic “A majority of these standards are ing the BOP causes delays. “Butchallenge because it lies in more already embedded in Chevron’s opera- we’d rather activate a BOP eventhan 4,000 feet (1,219 m) of water, tions,” Watson told the U.S. Congress when it isn’t necessary than risk a24
  • 27. blowout,” said Payne. He sees BOPslike seat belts: It’s important that theyexist and are used, but it’s alwaysbetter if they’re not needed. OperatingRick Graff, who spent the past 13 yearson Chevron’s Gulf of Mexico rigs as a With Excellencedeepwater drilling engineer, said hisfirst boss taught him constant respectfor high-pressure reservoirs in deepwater. “We take great care as we drillto keep them safely contained with cas- Our industry-leading performance is due toing, cement, drilling mud and constantmonitoring,” Graff said. “In my view, our commitment to excellence, from projectthe human element is just as important design through the mechanical.” Chevron’s Operational Excellence know what it means conceptually. Management System (OEMS) was We are incredibly fortunate to work ‘At Chevron, developed to systematically man- in an enterprise where protecting one goal overrides age all aspects of safety, health, people and the environment is both all others: making the environment, reliability and a practice and a heartfelt value,” efficiency to achieve industry- he said. sure everyone leading performance. The system goes home safe provides specific expectations for Over the past decade, our safety every day.’ all employees and contractors to record has gone from trailing participate in promoting safety, the industry to leading it. Our caring for the environment, and Days Away From Work Rate has John Watson making sure the company’s opera- dropped 90 percent, and nearly Chairman and CEO tions run reliably and efficiently. 800 fewer workers were injured in 2010 than were injured a decade Chuck Taylor, vice president of ago. Since 2001, we’ve reducedAt our Covington, Louisiana, operations Corporate Health, Environment the number of spills by 50 percentcenter, offshore installation managers and Safety in 2010, said protecting and reduced our spill volume bysuch as Mark Davis train on a simula- people and the environment is a nearly 80 percent. And since 1992,tor that is unique to our industry. The company priority and a core value. we’ve improved our own energysimulator mirrors high-tech control “Many companies say this and efficiency by 33 percent.rooms on production platforms in theGulf of Mexico. For additional information, please visit andThe training creates scenarios as as fluctuating pressures onequipment, changing flow rates, andloss of communications between com-puter and equipment.Right: Transocean drillship DiscovererInspiration in the Gulf of Mexico iscapable of drilling wells in 12,000 feet(3,658 m) of water to a total depth of40,000 feet (12,192 m). 25
  • 28. “The simulator hones our skills toGulf Relief operate safely and is a unique tool to improve response through practice during the training,” said Davis. “TheWe provided $10 million to “Our collaboration with which supported hard- simulator is not just about reading afive Gulf Coast community Chevron allowed us to hit commercial fishing procedure, it’s about doing it.”organizations that par- inform and mobilize volun- communities along theticipated in environmental teers across the country,” Louisiana coast, whereand economic relief, spill said Audubon President we have major facilities; Stop-Work Authorityresponse and cleanup after David Yarnold. “We provided and Greater New Orleans, The authority to stop work on athe BP Macondo well inci- much needed relief efforts Inc., which applied funding project is another critical factor indent in the Gulf of Mexico. and built a corps of citizen to economic recovery in keeping workers safe, and this author- scientists committed to the concert with the Louisiana ity extends to every employee andOne group was the long-term conservation of Economic DevelopmentNational Audubon Society. coastal bird populations and Department. contractor. It includes five steps: StopOur Pascagoula, Missis- habitats across the Gulf.” the unsafe or at-risk act with thosesippi, refinery helped the “These community part- potentially at risk, notify a supervisorgroup establish the Gulf Other groups we funded ners had immediate needs if he or she is present, address theCoast Audubon Volunteer were The Nature Con- to mobilize and respond issue, resume work after the issueResponse Center to man- servancy and America’s to impacts on localage more than 35,000 WETLAND Foundation, residents,” said Warner has been resolved, and share whatinquiries by volunteers which used funding to Williams, vice president of is learned with others.wanting to assist in Loui- address coastal restora- Chevron’s Gulf of Mexicosiana, Mississippi, Florida tion; the Committee for operations, “and we con- Barry Smith, who was the offshoreand Alabama. Plaquemines Recovery, tinue to work with them.” installation manager for Chevron’s Tahiti project in 2010, said the team reviews stop-work cases before every shift. “We discuss the incident to learnEvery employee and contractor from it and to positively recognize those who used stop-work author-has the authority and responsibility ity,” Smith said. “We want everyone to understand there are no negativeto stop work when he or she sees repercussions for taking the time to do things right.”an unsafe act or condition. During the Tahiti hookup and com- missioning phase, which lasted eight months, the Tahiti workforce logged stop-work authority more than 1,400 times, about five a day, for issues as diverse as hurricane-force weather and a shipping container that had arrived without a proper seal. Smith said there were almost 120 work stop- pages onboard Tahiti in 2010. “On Tahiti, I estimate that 60 percent to 70 percent of our work stoppages are called by our contractors,” Smith said. “This is a testament to our safety culture and to our business partners’Above: Offshore installation managers John Naquin (left) and Mark Davis train understanding that when we say it, weon simulators at Chevron’s Covington, Louisiana, operations center. The simula- mean it. Our contractors notice thattors replicate the control room on the Blind Faith production platform. we ‘walk the talk.‘”26
  • 29. Executive Interview Gary Luquette President, Chevron North America Exploration and Production Co.Gary Luquette became president of Chevron North America Explorationand Production Co. in April 2006. He chaired the governing board thatoversaw four joint-industry task forces formed after the BP Macondo wellincident in the U.S. Gulf of Mexico.What Why WhenWhat was the biggest Why is it important that When will the results of thesechallenge you faced in we return to work now task forces become a reality?the aftermath of the BP in the Gulf of Mexico?Macondo well incident? We have made significant progress. Oil and natural gas will be primary In addition to submitting numerousWhile this incident was the responsi- energy sources for decades to come. reports on lessons learned to thebility of a single operator, the entire Production in the outer continental U.S. Department of the Interior, weindustry felt the impact. We needed shelf — almost all of which is in the made recommendations in such keyan immediate and unified industry Gulf of Mexico — accounts for 27 per- areas as well design, cementing andresponse to learn from this tragedy cent of U.S. oil and 15 percent of U.S. safety. Many of these recommenda-and make sure it would never be natural gas supplies. Chevron alone tions evolved into regulations thatrepeated. That’s why the industry has more than 13,000 employees are helping companies operate at acalled together hundreds of experts living and working in Gulf States. We higher form four joint-industry task forces provide jobs, economic growth andto identify tangible improvements that government revenue. And even after we submit our finalcould be made in blowout prevention, reports from the task forces, thewell intervention and oil spill response. industry will continue to work togetherI was asked to chair the governing to improve operations and incidentboard that oversaw their work, and response. We committed to a numberI assumed this role because I felt of initiatives that will show sustainedstrongly that the industry needed to improvements through technology,take quick and decisive action in order research and development, and train-to earn the right to return to drilling in ing. We are safer today than we everthe deepwater Gulf of Mexico. have been, and we will continue to improve in the years ahead. 27
  • 30. Nigeria:Healthy Employees,Healthy CommunityChevron’s business interests and community interestsare linked, so our efforts to fight disease benefit all.Chevron Nigeria Ltd. reaches out nongovernmental organizations, Reducing the stigma associatedeach day to people in Nigeria’s bus- youth groups, congregations, shop- with the HIV infection is important totling cities and small towns to improve keepers, and others active in the battling it, according to Okala. “A fewhealth through workplace and com- diverse communities of Nigeria. months ago,” she said, “a colleaguemunity-based HIV/AIDS, malaria and said he had overcome his fears andtuberculosis programs. While combat- A fundamental element to operating had an HIV test. He tested positive,ing disease, we encounter prevailing successfully is a healthy workforce. but in the same breath added that hemyths and misconceptions, a social “The threat of HIV/AIDS to our wasn’t worried because he knew hefabric that leaves women and children employees is inseparable from the and his family would be fine, thanksespecially vulnerable, and a geography threat it presents to communities to the training on HIV he’d receivedthat makes it difficult to reach people. around our operations. Taking a lead from us. When I saw his smile, I knew position in the fight against AIDS in his case we had made progress.”“We believe we can make a difference is the right thing to do, and it is goodthrough our health programs, that business,” said Andrew Fawthrop, Reaching Women and Childrenwe can save lives and give back hope,” chairman and managing director of In Africa, HIV/AIDS disproportionallysaid Femi Odumabo, Policy, Govern- Chevron’s Nigeria and mid-Africa affects women, increasing the risk ofment and Public Affairs general operations. mother-to-child transmission. Mostmanager for Chevron Nigeria Ltd. of the 57,000 babies born HIV-positive Information, Creating Hope in Nigeria each year become infectedMany of the programs Chevron As medical protocols for HIV/AIDS by their mothers. Through our invest-Nigeria Ltd. supports are part of have evolved, communication, educa- ment in a Global Fund to Fight AIDS,our global strategies to help com- tion and access remain hurdles. “While Tuberculosis and Malaria grant inbat disease. In Nigeria, Chevron’s many people in urban centers are Nigeria, we have helped 50,213 HIV-partnerships and programs target informed, you still meet people in rural infected pregnant women receiveemployees, contractors, suppliers areas who don’t know anything about a complete course of antiretroviraland communities. We work together the disease,” said Dr. Chinwe Okala, a treatment to prevent mother-to-childwith local leaders, governments and Chevron public health physician. transmission. And to empower women28
  • 31. $5 million 50,000 400 in scholarships was HIV-infected pregnant communities benefit awarded by Chevron and women have received from programs created its Agbami partners to treatment to prevent by Global Memorandums students in medical fields mother-to-child trans- of Understanding between mission of the disease Chevron, communities and state governmentsEmployees at the Escravos gas plant in the Niger Delta region include (from left) electricaltechnicians Abigail Bateren and Akinfe Samuel, maintenance technician Adewale Adegbayi,and control systems technician Otokini Doore. 29
  • 32. who have HIV/AIDS, we provideEmpowering Communities microcredit to help them develop employment opportunities.for Their Own Progress Promoting Wellness We partner with the National Agency for the Control of AIDS to deliver aSince 2005, we’ve engaged (RDC) that advocates for government budgeting,various communities near community interests and lobbying processes and workplace wellness program to smallour operations through leads spending decisions. community relations. In and medium-size businesses in Lagos.Global Memorandums of Each RDC’s subcommittees 2010, 849 people had One of these organizations is the LadyUnderstanding (GMOUs). monitor accounting, con- been trained. Mechanics Foundation, an auto-repairThe GMOUs are multiyear flict resolution and project training program that empowers youngagreements between the management. The benefits from thecommunities, Chevron and GMOUs now reach more women. Along with learning a skill, thestate governments. The participatory, capacity- than 400 communities, women learn about disease prevention building approach is visibly villages and chiefdoms, and treatment. Peer educators, includ-Local participation in the changing these communi- involving 600,000 people ing employee volunteers from Chevron,company’s social invest- ties. Since 2005, Chevron in economic, health, educa- provide disease-awareness trainingment decisions is vital. “It’s Nigeria Ltd. has disbursed tion and environmentalhow we’re giving greater more than $56.7 million to projects. In 2010 alone, to the staff, who in turn help educateownership of development the RDCs for a wide range we contributed more than the community.activities to local communi- of projects, including build- $10 million to eight newties,” said Dennis Flemming, ing bridges, constructing GMOU projects. Efforts include distributing mosquitocommunity engagement solar-powered water facili- nets to fight malaria. During a visitadvisor for Chevron Nigeria ties, equipping hospitals Also in 2010, we launchedLtd. in 2010. with medical supplies and the Niger Delta Partnership to Ejigbo (a Lagos suburb) to demon- leading youth workshops. Initiative, with an initial strate net installation, Chevron andThe eight GMOUs cover investment of $50 million Lady Mechanics volunteers visitedprojects in five states To further improve the for economic develop- a mother in her home. “Today she isof the Niger Delta. Each RDCs’ effectiveness, in ment, conflict resolution showing others how to install the net,agreement has a Regional 2010, we ran a series of and capacity building inDevelopment Committee workshops on subjects such the region. and this is creating a multiplier effect as financial management, in awareness and good health care practices,” said Sunday Okegbemiro, Chevron Corporate Responsibility coordinator. “Knowing that theseSupporting Women and Children relatively inexpensive nets could very well save someone’s life is remarkable and unforgettable.”“Chevron operates in some executive vice president and health. In coun- Different Roads to Treatmentof the most challenging, for Policy and Planning. tries such as Brazil and The Chevron-sponsored Riverboatcomplex and dynamic Kazakhstan, training Clinic, now a decade old, has becomeplaces in the world. We The United Nations programs resulted inbelieve that empowering Millennium Development job placements, and in crucial in delivering primary healthwomen and children with Goals 3, 4 and 5 were Bangladesh, programs ledthe resources, knowledge established to empower to handmade goods beingand tools they need to be women and children sold in markets around thesuccessful members of through gender equality world. We contribute to thetheir communities creates and maternal and child Global Fund to Fight AIDS,healthier communities. health. Our efforts align Tuberculosis and Malaria,And healthy communities with these goals. whose grants have createdenable us to form long- anchor programs thatterm relationships in the Internationally, our initia- produce results in AIDSgeographies in which we tives to promote gender education, treatment andconduct business,” said equity have focused on train- reducing mother-to-childRhonda Zygocki, Chevron ing, economic development transmission rates.30
  • 33. care and disease intervention tothousands of people in 33 towns alongthe Escravos and Benin rivers in theNiger Delta. The floating clinic carriesdoctors and nurses, who bring medi- Human Rightscines and perform surgeries. Servicesinclude prevention education, malariaprograms for pregnant women and Our commitment to respecting human rightschildren under 5, and free immuniza-tions for approximately 1,000 women is embodied in The Chevron Way. To furtherand children yearly. this commitment, we adopted a Human RightsWe annually give $1.5 million for Policy in 2009.the boat and medical supplies, and theDelta State government provides the The policy, which replaced our community investment programsmedical staff. Without the riverboat 2006 Human Rights Statement, is and participation in voluntarydocked in these communities, the near- now a standing corporate policy in initiatives are complementary andest facility would be a hospital more our Business Conduct and Ethics help reinforce our commitment tothan 62 miles (100 km) away, accessible Code. All employees are required respecting human rights in eachonly through serpentine delta creeks. to comply with the policy. In 2010, of these areas. we developed tools and processesEducation: A Disease-Fighting associated with implementing the For example, human rights con-Investment policy, and full implementation is siderations are embedded in ourTo address Nigeria’s need for skilled expected by 2013. These efforts Operational Excellence Manage-health professionals, we and our are governed by an executive lead- ment System; our Environmental,Agbami deepwater partners created ership body and guided by a global Social and Health Impact Assess-the merit-based Agbami Medical cross-functional team. ment; our leadership in industryProfessionals Scholarship. Over the collaboration; and our participa-past two years, Chevron gave $5 mil- The policy addresses four tion in the Voluntary Principleslion to students of medicine, dentistry, human rights areas relevant to on Security and Human Rights.nursing and laboratory sciences from our business: employees, secu- Ongoing engagement with ourthe Delta, Ondo, Bayelsa, Rivers, Lagos, rity providers, the community stakeholders provides us withImo, Akwa Ibom, Abia, Cross River and and suppliers. Our corporate valuable input on the implemen-Edo states. The deepwater partners policies, management processes, tation of our policy.also spent $6 million to build andequip 20 laboratories across Nigeria,in institutions from grammar schoolsto universities. For additional information, please visit, and page: Dr. Chinwe Okala, aChevron public health physician inNigeria, educates employees and thecommunity about HIV/AIDS and malaria.Left: Imagbe Igbinoba is general man-ager of Light Level, a small businessthat benefited from wellness training.Right: Favour Thompson, a member ofthe Ejigbo community in Lagos, attends awellness session offered by peer educa-tors — employee volunteers from Chevronand the Lady Mechanics Foundation. 31
  • 34. Indonesia: Cultivating Gotong Royong In Indonesia in 1924, we took our first significant step in exploration and production in Asia. So, too, began our journey of shared progress in the region. 97% 4,600 No. 1 of Chevron managers small businesses is Chevron’s position and employees in were helped by Chevron as the world’s largest Indonesia are nationals in several provinces in producer of renewable Indonesia geothermal energyKi Odo’s sheep breeding business is helped by Chevron’s support of small businessesin the Pamijahan subdistrict of Bogor Regency, near Chevron’s geothermal operations.32
  • 35. In Indonesia, two simple words, that supply our operations, we help Supporting Local Businessesgotong royong, convey the complex support a diversity of ventures, such Our investments in Indonesia createidea of cooperation, of offering assis- as agriculture, fisheries and home- a diversity of jobs. About 97 percenttance, sharing burdens and working based businesses.” of our employees and managers arewith others. For decades, we have Indonesian nationals, while many otherembraced gotong royong, working with Chevron’s operations range from nationals are employed by our localIndonesians to strengthen economic crude oil and natural gas to geo- suppliers. These businesses play anopportunities that benefit operations thermal projects in West Java. Our important role in providing the servicesand local communities. Salak and Darajat projects, together and supplies we need to operate. with our geothermal projects in the“Helping improve social and economic Philippines, make us the world’s larg- Through education, training and fund-conditions beyond our operations est producer of geothermal energy, ing, we work with businesspeople suchpromotes a better standard of living a renewable resource that turns the as Erinawati, a maintenance contractorand expands our ability to conduct earth’s steam to electricity while in Minas who wanted to become partbusiness,” said Steve Green, manag- producing almost no greenhouse of our supply chain. She said, “At firsting director of Chevron’s IndoAsia gas emissions. I knew nothing about projects like this.operations in 2010. “In addition to Then I attended a workshop organizedproviding opportunities to businesses by Chevron. We were shown how to prepare proposals and bids.” 33
  • 36. Erinawati learned that to work with from $1.3 million in 2001 to more than “Microfinancing is about enablingChevron, businesses must meet certain $123 million in 2010. people to build businesses and employstandards of production, technology others, resulting in stronger com-and safety. She earned a Chevron Local Since LBD began, more than 815 small munities,” said Ted Etchison, ChevronBusiness Development (LBD) certifi- suppliers have been certified, 3,600 senior vice president for operations incate, qualifying her to bid on contracts contracts have been awarded and 7,200 Kalimantan. “Microfinance is not char-for fence painting and drainage. “I’m jobs have been created. In all, we have ity. It’s about building capability andnow able to empower not only myself purchased $52 million in local goods empowerment, and it places the respon-but also the many people on my team — and services. The Indonesian Ministry sibility for success on the neighbors and young people from of Energy and Mineral Resources recog- We help plant the seed. The people thenaround here,” Erinawati said. nized the success of the program with develop their own livelihoods.” its Padma Community DevelopmentThe LBD program has helped more Award, the second time Chevron has In East Kalimantan and West Java, wethan 4,600 small companies and received this award. partnered with government-ownedcooperatives in Riau, East Kalimantan financial institutions Permodalanand West Java. Workshops provide Microfinancing Grows Businesses Nasional Madani and Baitulmaaltraining in health and safety, environ- Microfinancing provides Indonesians Muamalat to form the Communitymental management, procurement, with business opportunities. The pro- Enterprise Development program,business ethics, project management, grams we support, through the delivery offering access to low-cost loans andtechnology and financial management. of low-cost loans, reach a variety of management training to community-LBD participants grew their businesses enterprises outside of our operations. based business groups and small businesses. “Before [microfinancing], it was dif-Educating Professionals ficult just to keep my small business running, but now I can make a tidy profit,” said Wistiningsih, a vegetableSince 2001, Chevron has the polytechnic, studying between Chevron, the seller at Petukan Market in Balikpapan.sponsored Politeknik Caltex construction, electrical governments of Aceh “The money we earn every day can beRiau, the province’s first installation and comput- and Nias, and the U.S. used as capital to buy vegetables topolytechnic university. ers — obtaining skills that Agency for International sell. Thanks to the help we’ve received,More than 880 students would help them rebuild Development — a secondhave graduated, and their communities. About polytechnic opened its my children have been able to goabout 85 percent found 80 percent of these gradu- doors, offering courses to school.”jobs within three months ates are now employed in in disciplines essential toof graduation. Aceh, and several started industry, such as electron- In Salak and Darajat, home to our geo- their own businesses, ics engineering, robotics thermal operations, we helped establishFollowing the 2004 tsunami, employing others. and information technology.more than 300 students Currently, Politeknik Aceh farmers’ networks, where farmersfrom Aceh completed a In September 2008 — has 580 students. The first turn idle land into fields of abundantthree-month program at through a partnership class will graduate in 2011. crops. We provide training, and the34
  • 37. Left: Chevron-funded training anddevelopment for local suppliers helpedErinawati’s maintenance businessqualify to work with Chevron. RenewableBelow left: Darajat geothermal opera-tions, West Java, Indonesia. Right: Near EnergyChevron’s Salak geothermal operations,Aah Sutiah Elia benefits from a mush-room farming project that has helpedthe local economy since 2007. To meet the need for affordable andfarmers support and share knowledge reliable energy, the world will have to relywith each other. In Pasirwangi, Garut on all sources.Regency, we initiated the pioneering,mosque-based Muamalat CommunityMicro Enterprise program. Currently, While applying new technologies to develop oil and natural gasfour mosques participate, providing resources, we also are investing in renewables.entrepreneurs with low-cost loans. We are the world’s largest producer of geothermal energy, and wePromoting Entrepreneurship continue to explore for more geothermal resources in Indonesia andWe are committed to helping create sus- the Philippines.tainable livelihoods and self-sufficiency.Those livelihoods come in many forms. Our investments in renewables focus on technology that can operate at industrial scale without subsidies. For example, Catchlight Energy LLC,In Dumai, known for its exquisite Malay our joint venture with Weyerhaeuser Co., is working to commercializetextiles, we support a program to pre- advanced biofuels made from forest-based resources.serve the traditional art of weaving. Weprovided training, hand looms, and the In California, we are developing and demonstrating solar technologyconstruction of a center and gallery. that will produce steam needed for production operations at our Coalinga oil field.In Garut Regency, we support goatbreeding; farmers earn money not onlyby selling goats but by selling goatmanure as fertilizer to organic farmers. To learn more, please visit and our efforts to preserve the MountHalimun Salak National Park, we andour community partners helped launchventures such as organic gardeningand rabbit breeding to help peopledevelop more sustainable livelihoods.Traders and craftspeople, for example,are encouraged to switch from makingfurniture from park timber to cultivat-ing vegetables and fruits.Each day in Indonesia, we embracegotong royong — a chance for businessand communities to work togetherand thrive. 35
  • 38. Additional Information and DataOur success is driven by our peopleand their unrelenting focus on deliveringresults the right way — by operatingresponsibly, performing with excellence,applying innovative technologiesand capturing new opportunities forprofitable growth.Global Geographic Breakdownof Employees at Year-End 2010At year-end 2010, Chevron’s worldwide employee staffing North America 46.2%was 58,267 (excluding 3,929 service station employees). Asia-Pacific 27.3%This represents a decrease of 3.11 percent over the previous Africa 14.7%year. U.S. workers numbered 26,428, and approximately13.3 percent were represented by unions. Europe/Middle East 8.1% South America 3.7%36
  • 39. 33% 58,267 100% is the amount Chevron employees worked rating was achieved has improved its own for Chevron at by Chevron on the global energy efficiency year-end 2010 Human Rights Campaign since 1992 Corporate Equality Index for the 6th consecutive yearAs of year-end 2010, Chevron was the third-largest producer of oil in Argentina. Project engineerFlorencia Rodriguez Aponte and plant supervisor Jorge Nelson Paz are seen here at the El TrapialField in western Argentina. In 2010, the workforce in Argentina received 11,000 hours of training. 37
  • 40. Performance DataGHG Emissions by Source 1 GHG Emissions by Sector 1 Total GHG Emissions by Type 1, 2Millions of metric tons of CO2 equivalent Millions of metric tons of CO2 equivalent Millions of metric tons of CO2 equivalent Combustion Flaring and venting Other Upstream Downstream Other Grid Direct Indirect Credits Net2010 41.9 2010 35.6 2010 62.1 —2.9 0.0 59.2 13.4 22.4 2009 60.3 —2.4 —0.9 57.0 3.9 1.2 2008 62.7 —2.4 —1.0 59.22009 2009 2007 63.7 —2.9 —0.5 60.3 40.3 31.8 12.2 24.0 2006 65.4 —3.0 —0.9 61.5 4.5 1.12008 41.3 2008 34.4 13.2 23.5 Energy Efficiency Performance 3 4.8 1.4 Percentage improvement since 1992 baseline2007 41.0 2007 35.9 14.6 22.8 2010 33 4.7 1.5 2009 302006 39.8 2006 37.1 2008 28 16.4 23.2 2007 27 5.3 1.3 2006 27Air Emissions 4, 5 Air Emissions by Sector 4, 5 Average Oil ConcentrationMetric tons Metric tons in Discharges to Water 6 Upstream Downstream Other Parts per millionVOCs Upstream Downstream Other Upstream Manufacturing and Chemicals2010 248,770 VOCs 2010 215,578 32,732 4612009 265,819 2009 225,949 39,630 240 2010 13.062008 221,734 2008 201,209 18,648 1,878 2.112007 260,640 2007 240,716 18,788 1,136 2009 11.282006 383,914 2006 357,727 26,100 87 3.87 2008 12.94SOX 3.732010 155,618 SO X 2010 137,676 17,514 428 2007 15.642009 142,052 2009 125,520 15,997 536 3.702008 125,036 2008 97,731 18,496 8,810 2006 32.032007 91,644 2007 63,223 20,451 7,970 4.512006 118,210 2006 82,922 25,574 9,714NOX2010 135,939 NOX 2010 122,825 11,852 1,2622009 122,911 2009 110,068 12,133 7112008 134,785 2008 95,717 12,282 26,7852007 144,676 2007 121,378 14,041 9,2572006 138,104 2006 113,001 16,020 9,083Improvements in reporting methodology during the reporting period make year-to-year comparisons difficult.Petroleum Spills 7, 8 Petroleum Spills 8 Fines and Settlements 9Volume in barrels Number of spills Environmental, Health and Safety Fines and Settlements Spills to land Secondary containment Spills to water Volume recovered2010 YEAR 06 07 08 09 10 12,139 2010 639 10,390 2009 798 Total number 699 684 564 460 5242009 9,368 2008 760 7,512 2007 8262008 17,492 2006 803 14,3992007 9,245 6,9202006 6,099 3,923 Footnotes are on page 41.38
  • 41. GHG EmissionsIn 2010, our total emissions were 59.2 million metric tons of CO2 equivalent, exceeding our goalof 59.0 million metric tons.1 In 2010, the reporting basis for total GHG emissions Chevron usedwas revised to exclude power generation grid credits to align with industry best practices. If thegrid credits of 0.9 had been included, the net emissions of 58.3 would have achieved the goal.Our GHG emissions intensity in 2010 was approximately 33 metric tons of CO2 equivalent per1,000 barrels of net oil-equivalent production from our Upstream operations, up from 32 metrictons in 2009. Our Downstream intensity was approximately 34 metric tons of CO2 equivalentper 1,000 barrels of crude oil that was input into our refineries, down from 36 in 2009.Our preliminary goal for 2011 is 60.0 million metric tons of CO2 equivalent. We expect to achievefurther emissions reductions through energy efficiency improvements and reduced flaringand venting. We also expect normal production levels and emissions to resume in areas wheredisruptions occurred in 2010; and we expect emissions from new facilities that will begin opera-tion in 2011.We estimate that combustion of our products resulted in emissions of approximately 418 millionmetric tons of CO2 in 2010, approximately 2 percent more than the 410 million metric tons in 2009.We calculate product emissions based on total 2010 Upstream liquids, gas and coal production.The emissions factors used are from the American Petroleum Institute’s Compendium ofGreenhouse Gas Emissions Methodologies for the Oil and Natural Gas Industry,2 publishedin 2004 and revised in 2009. When compared with the International Energy Agency’s Key WorldEnergy Statistics (2010 edition), these emissions represent approximately 1.4 percent of globalCO2 emissions from fossil fuels, which is lower than the 1.7 percent of global CO2 emissions whenwe first began estimating the GHG emissions from our products in 2002.WasteIn 2009, we began reporting a total waste metric to track the amount of total hazardous andnonhazardous waste that is recycled (which includes reused and recovered) from our operations.In 2010, total recycling was 59 percent of generated hazardous waste and 42 percent of generatednonhazardous waste. 39
  • 42. Performance Data Total Recordable Incident Rate 10 Lost-Time Incident Frequency 10 Days Away From Work Rate 10 Incidents per 200,000 work hours Days Away From Work incidents and Incidents per 200,000 work hours fatalities per million work hours YEAR 06 07 08 09 10 YEAR 06 07 08 09 10 YEAR 06 07 08 09 10 Workforce 0.42 0.35 0.36 0.27 0.24 Workforce 0.50 0.37 0.27 0.25 0.18 Workforce 0.09 0.07 0.05 0.05 0.03 Benchmark 0.59 0.56 0.55 0.40 N/A Benchmark 0.72 0.65 0.64 0.44 N/A Benchmark 0.14 0.13 0.12 0.09 N/A Employees 0.34 0.40 0.31 0.32 0.22 Employees 0.41 0.48 0.33 0.33 0.17 Employees 0.08 0.09 0.07 0.07 0.03 Benchmark 0.51 0.49 0.47 0.42 N/A Benchmark 0.64 0.57 0.57 0.52 N/A Benchmark 0.13 0.11 0.11 0.10 N/A Contractors 0.46 0.34 0.37 0.26 0.24 Contractors 0.53 0.33 0.25 0.23 0.19 Contractors 0.10 0.06 0.05 0.04 0.03 Benchmark 0.64 0.61 0.59 0.39 N/A Benchmark 0.78 0.71 0.67 0.39 N/A Benchmark 0.15 0.14 0.13 0.07 N/A Work-Related Fatalities Process Safety In 2010, there were a total of 95 loss-of-primary-containment incidents of significance (ANSI/API12 Recommended Practice 754 Tier 1) across the company, compared with 104 incidents in 2009. Of the 95 inci- dents, 63 occurred in Upstream and 32 in Downstream, which includes Manufacturing and Chemicals. There were no fatalities resulting from loss-of-primary-containment incidents. YEAR 06 07 08 09 10 Workforce 12 17 5 9 5 Employees 1 3 0 0 0 Global Diversity Contractors 11 14 5 9 5 YEAR 09 10 Women in total workforce 22.9% 23.1% Women represented at midlevel and above 11.7% 11.8% Women and non-Caucasian men represented at senior executive levels 26.5% 27.0% Motor Vehicle Safety 11 Company vehicle incidents per million miles driven U.S. Equal Employment Opportunity Commission Statistics2010 0.012009 0.06 2008 0.06 YEAR 07 08 09 102007 0.10 Minorities among total employees 33.9% 35.3% 34.9% 35.4%2006 0.11 Women among total employees 29.0% 29.2% 28.9% 29.3% Minorities among executives and senior managers 9.6% 11.0% 11.2% 11.1% Minorities among first- and midlevel managers 26.5% 26.9% 27.5% 27.4% Women among executives and senior managers 14.1% 15.0% 14.4% 15.3% Women among first- and midlevel managers 25.6% 24.7% 27.4% 26.9% Minorities among professionals 29.1% 30.6% 31.4% 31.7% Women among professionals 32.0% 32.4% 32.4% 32.8% Footnotes are on page 41. 40
  • 43. Notes to pages 38 and 391 In 2010, Chevron deployed a new greenhouse 2 Direct emissions come from sources within a 6 Global Upstream average oil concentration gas (GHG) and energy reporting system. The facility. Indirect emissions come from electricity in discharges to water increased in 2010 new system incorporates the reorganization of and steam Chevron imports, less the emissions mainly due to pit maintenance and a new Global Downstream and emissions estimation credits from electricity and steam Chevron procedure driven by regulatory requirements methodologies from mandatory GHG report- exports. Grid credits account for the electricity for testing oil-in-water concentration in ing requirements imposed in the U.S. state Chevron exports that is produced more effi- IndoAsia operations. of California and nationally in Australia, the ciently than electricity from the regional or Manufacturing and Chemicals average oil con- European Union and the United States. Going national grid. centration in discharges to water decreased forward, these systematic changes will make mainly due to the construction of a new efflu- comparing emissions with years prior to 2010 3 In 2010, Chevron’s total energy consumption for ent treatment plant that came fully on line in difficult. Nevertheless, the 2009 to 2010 net Chevron’s operated assets was 747 trillion Btu November 2009 at the Pascagoula Refinery. increase of approximately 2.2 million metric tons (approximately 788 million gigajoules), based of CO2-equivalent emissions can be attributed upon a lower heating value. This performance to several factors. Beginning in 2010, in conform- 7 Secondary containment volume — which is is an improvement over 2009’s consumption ance with industry best practices, Chevron no not released to the environment — is included of 770 trillion Btu (approximately 812 million longer accounts for grid credits in its power in the total volume listed at the end of each gigajoules). 2009 numbers have been restated. generation emissions, which increased emissions bar. Approximately 21 percent, or 2,529 barrels, In 2010, Chevron changed its reporting of energy by more than 0.9 million metric tons. Azerbaijan of the total volume was spilled to secondary consumption from including nonoperated joint- International Operating Co. is now included in containment in 2010. venture refineries to reporting on operated the corporate inventory, resulting in an emis- refineries only. sions increase of more than 0.4 million metric 8 All spills to water are included. Spills to land tons. Operationally, flaring emissions in Angola and secondary containment that are greater increased due to turnaround activity, and emis- 4 Volatile organic compounds (VOCs) derive than or equal to one barrel are included. sions in U.S. Midcontinent operations increased primarily from fugitive emissions from equip- due to new gas processing. Improved data col- ment (such as valves, pumps and compressors), lection and accounting also account for the flaring and venting, and flashing gas. Nitrogen 9 Environmental fines and settlements increased emissions from the Canadian Upstream oxides (NOX) and sulfur oxides (SOX) occur during were $93.9 million in 2010 and accounted operations as well as from Shipping operations, combustion. for 3.24 percent of our total environmental which now account for time-chartered vessels. expenditures. Total environmental expendi- Emissions increases were offset largely by flare tures were $2.9 billion, of which capital 5 In 2010, Chevron improved its estimation meth- reductions in Nigeria and at Tengiz in Kazakhstan expenditures were $1.4 billion and noncapital odology and updated the emission factors in and by decreased emissions at the Pascagoula expenditures were $1.5 billion. its guidance documents and tools. The updated Refinery, which experienced high turnaround methodologies resulted in variances in reporting Health and safety fines and settlements activity in 2010. Other emissions offsets resulted compared with 2009. accounted for approximately 0.2 percent of from the shutdown of a mine in New Mexico and the total fines and settlements, representing the sale of marketing assets. 2010 reported VOC emissions were lower than $0.19 million. in 2009. The VOC emissions from Nigeria/Mid- The 2010 flaring and venting emissions number Africa operations decreased due to the use of is based on flare gas volume of approximately updated methodologies, and International and Notes to page 40 846 million cubic feet per day plus any venting Americas Products emissions decreased due to of gas in terms of CO2 equivalents. divestitures of our transportation fleet and facili- 10 American Petroleum Institute’s Benchmarking Chevron’s GHG emissions data are reported ties. This decrease was somewhat offset by Asia Survey of Occupational Injuries, Illnesses, and on an equity basis for all businesses in which South operations, which reported an increase Fatalities in the Petroleum Industry data are used Chevron has an interest, except as noted due to a change in flaring operations. as industry benchmarks. 2010 benchmark data below. The following entities are not currently were not available at the time of publication. 2010 NOX and SOX emissions were each reported included in the Chevron corporate GHG inven- to be higher than 2009. In each case, a signifi- tory: Chevron Phillips Chemical Co., the Caspian cant portion of the increase can be attributed to 11 Data include catastrophic and major incidents only. Pipeline Consortium, the Chad/Cameroon Shipping operations, which updated its emission pipeline joint venture, Caltex Australia Ltd.’s factors to better account for the fuel and engine Lytton and Kurnell refineries, and other refiner- 12 American National Standards Institute/American types specifically used by ships. ies in which Chevron has an equity interest of Petroleum Institute. 16 percent or less. These are entities over which Other increases resulted from power operations Chevron does not have full operational control in the IndoAsia region, which began reporting or which do not generally follow Chevron’s NOX emissions in 2010. Saudi Arabia/Partitioned corporate GHG inventory protocol or a compat- Zone reported an increase in SOX emissions due ible protocol. to an improved method for tracking gas sent to flares. Chevron’s 2007–2009 emissions have been restated, primarily due to a data revision by one Global Gas, previously reported as “other,” business unit, resulting in an annual emissions was included with Upstream in 2009 and 2010. reduction of nearly 0.3 million metric tons. “Other” includes Chemicals, Chevron Business and Real Estate Services, Chevron Mining Inc., Due to rounding, individual numbers may not Chevron Environmental Management Co., and sum to the total numbers. Corporate Aviation. Due to rounding, individual numbers may not sum to the total numbers. 41
  • 44. GRI and API/IPIECA IndexThis index refers to: • 2006 Sustainability Reporting Guidelines of the Global Reporting Initiative (GRI), Version 3.0 • American Petroleum Institute/International Petroleum Industry Environmental Conservation Association (API/IPIECA) Oil and Gas Industry Guidance on Voluntary Sustainability Reporting, 2nd edition, 2010 For more information on GRI and API/IPIECA reporting guidelines, please visit and GRI API/IPIECA Where ReportedProfile DisclosuresStrategy and Analysis 1.1 1.2 3Organizational Profile 2.1 2.22 2.32 2.42 2.52 2.62 2.72 2.82 2.92 2.10Report Parameters Report Profile 3.1 3.2 3.3 3.4 41 Report Scope and Boundary 3.5 3.6 3.7 3.8 3.9 3.10 3.11 36–45 GRI Content Index 3.12 42 Assurance 3.13Governance, Commitments Governance 4.13 4.2 3 4.32 4.42 4.52 4.62 4.72 4.8 4 SE182 1, 25and Engagement 4.95 4.102 Commitments to External Initiatives 4.11 4.122 4.132 Stakeholder Engagement 4.141 4.151, 5 4.161, 5 4.17 1, 5Economic Economic Performance EC13 EC2 3 EC33 EC43 EC53 SE135 Market Presence EC66 EC76 SE4 SE7 1, 6 18–21 Indirect Economic Impacts EC87, 8 EC9 1, 7, 8 13Environmental Materials EN1 EN2 Energy EN3 EN4 EN59, 10 EN69, 10 EN72, 9 E2 E311 7, 35, 38, 39 Water EN8 EN9 EN1012 E6 17 Biodiversity EN1113 EN12 13 EN1313 EN1413 EN1513 E513 6, 8, 17, 26 Emissions, Effluents and Waste EN16 EN17 EN1814 EN19 E8 E9 E1 E414 E10 E7 7, 17, 38, 39 EN20 EN2112 EN22 EN23 EN24 EN25 Products and Services EN2612 EN27 EN29 Compliance EN28 39 Overall EN30SocialLabor Practices and Employment LA1 LA2 LA3 SE6 11–13, 18–21, 36, 40Decent Work Employee Satisfaction SE16 Labor/Management Relations LA45 LA5 Occupational Health and Safety LA6 LA7 LA815 LA9 HS1 HS2 15 HS3 HS5 24–26, 28–31, 40 Training and Education LA10 LA11 LA12 SE17 Diversity and Equal Opportunity LA132, 6 LA14 21, 40Human Rights Investment and Procurement Practices HR116 HR2 HR3 SE816 SE9 16 31 Nondiscrimination HR4 SE156 21 Freedom of Association and Collective Bargaining HR5 Child Labor HR6 Forced and Compulsory Labor HR7 Security Practices HR816 SE1016 31 Indigenous Rights HR9 SE2 16 8Society Community SO11, 7 SE11 SE3 SE41, 7 SE51 13, 40 Corruption SO2 SO35 SO4 SE115 SE125 Public Policy SO517 SO65 SE145, 17 Compliance SO7 SO8Product Responsibility Customer Health and Safety PR14 PR5 HS4 4, 18 25 Product and Service Labeling PR318 Marketing Communications PR6 Compliance PR2 PR4 PR7 PR8 PR9Key to Indicators: Information responsive to 1 Throughout print and online report 7 13 reported in 2010 these indicators appears on 2 8 14 reported in 2010 our websites: 3 9 15 covered in 2010 4 10 16 5 11 17 6 12 18
  • 45. Assurance Statement Scope of the Assurance Conclusions and Findings Lloyd’s Register Quality Assurance, Inc. (LRQA) was engaged To form our conclusions, LRQA obtained sufficient evidence by Chevron U.S.A. Inc. to assure the reporting processes used considered necessary for us to give limited assurance of in the creation of Chevron’s 2010 Corporate Responsibility Chevron’s HES reporting processes. Based on the scope of the Report (“the Report”). The objectives of the review were to assurance and the data and information presented for review, validate the integrity of Chevron’s reporting processes and to nothing has come to our attention that would cause LRQA evaluate consistency with the IPIECA/API Oil and Gas Industry not to believe that Chevron’s reporting process is effective in Guidance on Voluntary Sustainability Reporting (2010). LRQA delivering HES indicators for the purpose of evaluating and has reviewed Chevron’s Corporate Responsibility Report communicating corporate performance in these areas. reporting processes since 2008 (for the 2007 Corporate Responsibility Report). Our other conclusions: • Processes are in place that ensure that sites contributing to The LRQA scope of assurance was limited to processes for core HES metrics understand corporate reporting procedures the reporting of health, environmental and safety (HES) and requirements. performance indicators. Verification of the accuracy of data and information was not included in the assurance scope. • The methods to be used for calculating each HES performance The Report has been prepared and approved by Chevron metric are clearly defined and communicated. management, who are solely responsible for the collection, • Chevron’s reporting requirements for HES metrics are under- presentation, and accuracy of all data and information con- stood and carried out. Data collected at the site/local and tained within it. business unit levels are checked and aggregated into corpora- tionwide metrics. Approach LRQA’s assurance approach was risk-based and undertaken • Responsibility for annually reviewing and updating reporting as a sampling exercise. It covered the following activities: guidelines is clear, with improvement in methodology regularly undertaken.• Visiting Chevron’s Global Upstream and Gas facility in Midland, Texas, and Chevron’s Downstream refinery in Pascagoula, Mis- • Chevron’s reporting process is effective in delivering HES sissippi, to assess local understanding and implementation of indicators that are useful for assessing corporate performance Chevron’s HES reporting requirements. and reporting information consistent with IPIECA/API/OGP Oil and Gas Industry Guidance on Voluntary Sustainability• Visiting Chevron’s Downstream and Chemicals headquarters in Reporting (2010). San Ramon, California, to assess business unit understanding and implementation of Chevron’s HES reporting requirements. Observations and areas for potential improvement are provided• Interviewing key personnel to identify and gain an understand- in a report to Chevron management. These observations do not ing of Chevron’s reporting requirements. affect our conclusions.• Reviewing the documented reporting requirements to validate consistency of scope, definition and reporting for each of the HES performance indicators.• Reviewing the processes used at the corporate level to aggregate data and information for inclusion in the final report. Andrea Bockrath On behalf of Lloyd’s Register Quality Assurance, Inc. March 24, 2011 Third-Party Liability LRQA, its affiliates and subsidiaries and their respective officers, employees or agents are, individually and collectively, referred to in this clause as the “Lloyd’s Register Group.” The Lloyd’s Register Group assumes no responsibility and shall not be liable to any person for any loss, damage or expense caused by reliance on the information or advice in this document or howsoever provided unless that person has signed a contract with the relevant Lloyd’s Register Group entity for the provision of this information or advice, and, in that case, any responsibility or liability is exclusively on the terms and conditions set out in that contract. LRQA’s Competence and Independence LRQA ensures the selection of appropriately qualified individuals based on a rigorous appraisal of their training, qualifications and experience. The team conducting the assurance of the Report was multidisciplinary and has been involved in assurance assessments from the outset of external verification of nonfinancial performance reports. LRQA’s internal systems have been designed to manage and review assurance and certification assessments. This involves independent review by senior management of the outcome derived from the process applied to the assurance of corporate reports. Independence of LRQA From Chevron LRQA and Chevron operate as discrete and independent legal entities. LRQA provides Chevron with third-party attestation assess- ment services to ISO 14001 and OHSAS 18001 as well as certification assessment services to other ISO standards. The assurance, attestation and certification assessment services are the only work undertaken by LRQA for Chevron. Conflict of Interest LRQA is part of the Lloyd’s Register Group. Lloyd’s Register Group entities recognize that potential conflicts of interest may exist that could have an impact on its independent assurance and certification activities. Lloyd’s Register Group entities are committed to identifying and managing such conflicts so that they do not adversely affect its independence and impartiality. To protect the integrity, neither LRQA nor any other Lloyd’s Register Group entity will provide services that create a conflict and compromise the independence and impartiality of third-party assurance and certification. The Lloyd’s Register Group entities will never verify their own solutions to a customer’s problem. 43
  • 46. GlossaryAa Dd Ll PpAPI Downstream Liquefied natural gas (LNG) PartnerAmerican Petroleum Institute The industry term for operations Natural gas that is liquefied In this report, partner is used related to refining crude oil into under extremely cold tem- in its broad sense to mean aBb finished petroleum products, peratures to facilitate storage person or organization associ-Biodiversity and for marketing crude oil or transportation in specially ated with another in a commonRefers to the diversity of life and the many products derived designed vessels. activity or one that shares aon the planet. It encompasses from petroleum. mutual interest. It does notgenera, species, habitats and Nn imply a member of a contrac-ecosystems, and the processes Ff Nongovernmental tual partnership in which thethat support them. Flaring and venting organization (NGO) partners jointly own and carry The burning or release of natu- An organization that is indepen- on a business and proportion-Cc ral gas that is often produced dent from government, generally ally share in liabilities, profitsCapacity building in association with crude oil, a a nonprofit organization devoted or losses of the business.A key area of focus for Chevron’s process that typically occurs to providing assistance to orcommunity engagement efforts, when there is no market or onsite advancing a particular cause Rrwhich means targeting support use for the gas. or issue. Renewable energytoward programs that help indi- Energy resources that are notviduals and institutions develop Gg Oo depleted when consumed orthe skills, capabilities and exper- Geothermal energy OGP converted into other formstise they need to succeed. A renewable source of energy International Association of Oil & of energy (for example, solar, that uses the heat energy of the Gas Producers geothermal, ocean and tide,Carbon sequestration wind, hydroelectric power, and earth for heating or to createCapturing and storing carbon OHSAS 18001:2007 biofuels). electricity.dioxide in various ways, such An international Occupationalas capture by vegetation or by Greenhouse gases (GHGs) Health and Safety Assessment Ssinjection into geologic forma- Gases that trap heat in the Series management system Stakeholdertions for long-term storage, so atmosphere; such gases include specification. At Chevron, defined as thosethat it does not enter or remain water vapor, ozone, carbon who affect, are affected by, or Operational Excellencein the atmosphere as a green- dioxide, methane, nitrous oxide, have a legitimate interest in our Management System (OEMS)house gas. hydrofluorocarbons, perfluoro- company’s performance. Chevron’s standard approach carbons and sulfur hexafluoride.The Chevron Way to systematic managementExplains our values: who we are, of safety, health, the environ- Uuwhat we do, what we believe and Ii ment, reliability and efficiency Upstream IPIECA The industry term for opera-what we plan to accomplish. in order to achieve world-class International Petroleum Industry tions related to exploring for, performance. Environmental Conservation developing and producing Association crude oil and natural gas; for ISO 14001:2004 marketing natural gas; and for Environmental management transporting crude oil, natural system standard developed by gas and petroleum products by the International Organization pipeline and marine vessel. for Standardization. Biodiversity The pig-tailed macaque (Macaca nemestrina) is commonly found near PT Chevron Pacific Indonesia’s operations in Rumbai and Minas, Sumatra, where production operations coexist with healthy vegetation and pristine forests.44
  • 47. We embrace shared progress across our operationsaround the world. To learn more, please This ReportThis report covers 2010 data and activities. We also occasionally mention activities that took place before 2010 and in early2011 when they help provide a clearer picture of our performance. This report covers our owned or operated businesses anddoes not address the performance of our suppliers, contractors or partners unless otherwise noted. All financial informationis presented in U.S. dollars unless otherwise noted. Our previous report was published in May 2010 and covers 2009 dataand activities.We continue to be informed by reporting frameworks and guidelines that include the Global Reporting Initiative (GRI) andthe Oil and Gas Industry Guidance on Voluntary Sustainability Reporting, 2nd edition, published in 2010 by the InternationalPetroleum Industry Environmental Conservation Association (IPIECA) and the American Petroleum Institute (API). We includedan index to help readers find information corresponding to the GRI and API/IPIECA indicators (see page 42).This report, previous editions of our report and additional information can be found at welcome your comments and feedback.Ms. Silvia GarrigoChevron Corporation6001 Bollinger Canyon RoadSan Ramon, CA 94583-2324Cautionary Statement Relevant to Forward-Looking Information WRITER Peter Bartelme PHOTO CREDITSThis Corporate Responsibility Report by Chevron Corporation contains forward-looking statements Cover: Robert Garvey/BKAY Designrelating to the manner in which Chevron intends to conduct certain of its activities, based on manage- Page 3: Eric Myerment’s current plans and expectations. These statements are not promises or guarantees of future Pages 4 & 5: Jeremy Ashton Page 6: Simon Westlakeconduct or policy and are subject to a variety of uncertainties and other factors, many of which are Page 7 (from left): Jeremy Ashton; Mike Edmondsonbeyond our control. Page 8 (from top): Robert Garvey/BKAY Design; Jen O’Reilly Page 9: Tom Rovis HermannTherefore, the actual conduct of our activities, including the development, implementation or continu- Pages 10 & 13: Marc Marriott Pages 14 & 15: Marilyn Hulbertation of any program, policy or initiative discussed to forecast in this report, may differ materially in Page 16: Myla Domingothe future. The statements of intention in this report speak only as of the date of this report. Chevron Page 17: Tina Toriello Pages 19–21: Marc Marriottundertakes no obligation to publicly update any statements in this report. Pages 22–25: Ken Childress Page 26: Elizabeth RyanAs used in this report, the term “Chevron” and such terms as “the company,” “the corporation,” “their,” Page 27: John Smallwood“our,” “its,” “we,” and “us” may refer to one or more of Chevron’s consolidated subsidiaries or affiliates Pages 29–31: P.J. Raval Pages 32–35: Oetomo Wiropranotoor to all of them taken as a whole. All these terms are used for convenience only and are not intended Page 37: Chevron Argentinaas a precise description of any of the separate entities, each of which manages its own affairs. Page 44: Budi Koesoemo
  • 48. 2010 Annual Report 2010 Supplement 2010 Corporate Responsibility Report to the Annual Report2010 Annual Report 2010 Supplement to the Annual Report 2010 Corporate Responsibility Report Learn More Online The printed report was printed on Forest Stewardship The Annual Report, the Supplement to the Annual Report Council–certified Mohawk Options 100, made from and the Corporate Responsibility Report are available on 100 percent post-consumer waste. It is processed the Internet at elemental chlorine-free and produced using wind energy. Printed by Lithographix, Inc., whose rooftop solar © 2011 Chevron Corporation. All rights reserved. panels are expected to offset the company’s energy 913-0386H 5/11 (20M) demands by 30 percent. Design: Sequel Studio, New YorkChevron Corporation6001 Bollinger Canyon RoadSan Ramon, CA