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Chevron Downstream
 

Chevron Downstream

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    Chevron Downstream Chevron Downstream Presentation Transcript

    • Downstream Mike Wirth Executive Vice President Downstream © 2008 Chevron Corporation
    • What We Accomplished in 2007 Improved Base Business Record Safety Major Asset Divestments Reliability Refinery Delivered 16% ROCE Increased Scale & Flexibility South Korea Upgrade El Segundo Upgrade U.K. Caspian Integration 2 © 2008 Chevron Corporation
    • Added Scale and Flexibility in Asia Yeosu Refinery, South Korea – Heavy Oil Upgrade Vacuum Unit Hydrocracker Lube Oil Plant One of the world’s largest 33 MBD light product increase vacuum columns 15 MBD new lube base oils Lower crude costs ~$1/bbl 3 © 2008 Chevron Corporation
    • Added Scale and Flexibility in the U.S. El Segundo Refinery, California – Heavy Crude Project New Coker Fractionator Lower crude costs ~$1/bbl Improved coker reliability Increased coker throughput 4 © 2008 Chevron Corporation
    • Right Strategies 5 © 2008 Chevron Corporation
    • Leveraging Our Portfolio and Capabilities Improve returns and selectively grow, with a focus on integrated value creation Operational excellence in base business Focused portfolio high-grading Disciplined growth in refinery scale and flexibility 6 © 2008 Chevron Corporation
    • Well-Positioned In Growth Regions Refineries Under Construction North America Asia-Pacific 1/2 of energy demand growth 3/4 of Chevron refining capacity 7 © 2008 Chevron Corporation
    • Superior Refining Assets Solomon Refinery Complexity 12 Sustained complexity and margin advantage 8 Investing to further 4 enhance flexibility Improving through 2006 2000 2002 2004 reliability and flexibility Solomon Net Cash Margin (Indexed) 200% Base 100% Chevron International Majors* 2000 2002 2004 2006 The eight majors tracked by Solomon * 8 © 2008 Chevron Corporation
    • Effective Execution 9 © 2008 Chevron Corporation
    • “Reliability Refinery” Is Top Priority Superior World-Class Advanced Capabilities Processes Equipment Hiring experts Risk detection Regular asset reliability briefs Reliability Remote specialists monitoring Focus on risk elimination Reliability Design for University Reliability Strong Risk Management Culture 10 © 2008 Chevron Corporation
    • Improving Competitive Performance Solomon Utilization Chevron vs. International Majors * 88% Top-ranked in 2006 84% Focus on sustained reliability performance 80% 76% 2008 2002 2006 2000 2004 The eight majors tracked by Solomon * 11 © 2008 Chevron Corporation
    • Richmond Refinery Reliability Improvement Crude Inputs Solomon Utilization (Indexed) Excludes planned turnarounds MBD 250 130% 120% 110% 225 Crude Unit Crude Unit 100% Turnaround Turnaround Base 200 90% 2005 2006 2007 2005 2006 2007 Average Design for Reliability process 100+ risks eliminated in 2007 has enhanced performance 40% fewer incidents 100+% crude unit utilization since post-fire recovery 12 © 2008 Chevron Corporation
    • Pembroke Refinery Reliability Improvement Steam Plant Availability Solomon Utilization (Indexed) Excludes planned turnarounds 120% 100% 110% 90% Base 100% 80% 90% 80% 70% 2005 2006 2007 2005 2006 2007 Average 11 boiler failures in 2005 40% fewer down days Zero failures in 2007 50% fewer incidents Significant utilization impact Uptime interval grew 140% 13 © 2008 Chevron Corporation
    • Significant Portfolio High-Grading in 2007 Cumulative Proceeds $ Billions A/T Manufacturing Netherlands Credit Card 3 North America 2 Retail Fuels Benelux 1 2004 2005 2006 2007 Retail Fuels Uruguay 14 © 2008 Chevron Corporation
    • Profitable Growth 15 © 2008 Chevron Corporation
    • More Focused and Efficient Marketing Rationalizing Higher Return Premium Footprint Channels Brands Fewer markets Less ownership Reliable supply Simpler model Grow non-retail Unsurpassed fuels Generate cash Focused C-Stores Strong brands 16 © 2008 Chevron Corporation
    • Improving Marketing Returns Lubricants Marketing Product Line Complexity Capital Employed Thousand Inventory Units $ Billions 10 8 Dow n 15 % Dow 5 4 n 33 % 2007 2010 2007 2010 Targeted Benefits by 2010 Simplified product line Less capital employed ($1 B) 80% of retail fuel sold through 70 possible country exits higher return channels More retail sites divested Lower operating costs ($0.7 B) Restructuring 17 © 2008 Chevron Corporation
    • Increasing Integration to Capture Value PNZ Heavy Asia High-Mercury Caspian Blend El Segundo Asia-Pacific Pembroke 18 © 2008 Chevron Corporation
    • Adding Scale and Flexibility Year-End 2008 South Korea Yield Increase Flexibility Scale/Utilization Pascagoula Heavy Oil Pre-Commercial El Segundo Yield Increase Pascagoula Pembroke Richmond Pembroke Creep Caspian Blend 2 Crude Flex Caspian Blend 1 Pascagoula Richmond Pascagoula El Segundo Crude Flex Gasoline Yield Gasoline Yield Crude Flex Singapore Singapore Singapore South Korea Base Oil Plant Clean Gasoline Clean Diesel Crude Flex Engineering Evaluation Construction Operation & Design 19 © 2008 Chevron Corporation
    • Investing to Increase Margins and High-Value Production Heavier/Higher Sulfur Slate Capacity Creep Crude Sulfur High-Value Product Chevron vs. International Majors* wt% S MMBD uct r lfu rod 2.0 1.8 e Su eP Mor Mor 1.8 Base 1.2 1.6 1.4 0.6 2000 2006 2010 2007 2008 2009 2010 $0.50/bbl lower crude costs 10% increase in HVP The eight majors tracked by Solomon * 20 © 2008 Chevron Corporation
    • Developing Proprietary Technologies Vacuum Resid Slurry Hydrocracking (VRSH) Pascagoula Pre-Commercial Plant Liquid Product Yield % of Resid Feed VRSH 120% LPG Delayed Naphtha Coking 80% Jet Diesel 40% Ultra-Heavy Ultra-Clean VGO Resid Products 21 © 2008 Chevron Corporation
    • Focus and Execution Are Key Sustained reliability Portfolio high-grading Marketing efficiency Greater flexibility/margins Cost-effective capacity creep Increasing integration value 22 © 2008 Chevron Corporation
    • Our Continued Commitment to Earnings and Returns Improve Utilization by 6% 2008 Additional Divestments 2008 Marketing Restructuring 2009 Reliance Decision 2009 South Korea Upgrade 2010 Richmond Upgrade 2010 El Segundo Upgrade 2010 Pascagoula VRSH 2010 23 © 2008 Chevron Corporation
    • Questions and Answers 24 © 2008 Chevron Corporation
    • Break 25 © 2008 Chevron Corporation