The vision should be one of an asset, or portfolio of assets, that exists in the context of, and is synchronized with, its supply chains and surrounding business environment. The asset(s) together with its supply chain should continuously respond in unison to market signals, disturbances, and optimize holistically. Since the early 1980s Chevron has developed and continued to enhance its proprietary linear programming (LP) technology, Petro, to select the most profitable raw materials, evaluate product options, optimize refinery processes, and promote efficient capital investments across its global refining network. Key to this has been the use of Petro, with its highly efficient multi-location modeling methodology, to optimize raw materials and product supplies between refinery sites. This presentation will showcase how Chevron drives transformational value through multi-site optimization, and how development of associated people and business processes have accompanied evolution of the technology.

1. Angela Chau
Sr. Planning Analyst
Chevron
November 10, 2020
Multi-Site Optimization
To Drive Value Creation
In Chevron

2. Agenda
1. A multi-site optimization
success story
2. The evolution of multi-site
optimization
• Petro LP
• Process and People

3. Chevron Refineries in the Last 20 Years
Assets havechanged over the years
So as the optimization of our facilities

4. Petro LP in Response to Change
Model accuratelyfor single sites
Easilymodel multi-sitesin response to business needs
Crude Allocation
Optimization
Intermediate Feedstocks
Optimization
RefineryA
RefineryC
Blending Components
Optimization
RefineryB
Terminal Constraints
Optimization
Marketing Demand
Optimization

5. Petro LP and Multi-Site Modeling Capability
 Build and use multi-site modelswith limitedeffort
 Assemble from independent single-locationmodels plus a global location that
contains transfers and global constraints
• optimization of materials transfers between locations while respected required
local and global model constraints
Model Type Equations Coefficients
Solve Time
(Seconds)
Single-Period Models 5,000 – 10,000 100,000 – 200,000 5
Multi-Refinery Models 10,000 – 20,000 200,000 – 400,000 10
Multi-Period Models 25,000 – 100,000 500,000 – 1,000,000 60
Petro Model Sizes and Solve Times

6. People and Process – Continuous Improvement
Multi-site optimization valuecapture >$20MM/yr
Opportunity Value
Distributive
Recursion
Modeling
Methods
Reporting
Date
Quality
System
Improvements
Capable
Analysis
Work
Processes
Leadership
Training
Management
Support

7. Multi-site Optimization Example
 Drivers: Low sulfur fuel specifications and
Ethanol mandate in Hawaii have impacted Hawaii
stock balance in 2007
• Long 1-3 mbd LSVGO
• Long 2-3 mbd FCC Gasoline
• Long 2-3 mbd 500ppm S Diesel
• Long 4-5 mbd SR Naphtha
 Business questions:
• How do we address the long bbls in the already
long market at Hawaii?
• Potential opportunities to optimize with USWC
refineries with feasible logistics.
• What’s the value to optimize with the
USWC refineries?
• Alternative: export to Far East at much lower
netbacks or slow down the refinery
3-Refinery
Optimization Model
Hawaii Petro Model
Richmond
Petro Model
El Segundo
Petro Model

8. Limit Cost, $/bbl
Ship LSVGO to Richmond 8.08
Ship FCC Gasoline to Richmond 34.15
Ship SR Naphtha to Richmond 18.32
Ship LSVGO to El Segundo 20.87
Ship SR Naphtha to El Segundo 18.64
Single-site optimization to gain insights
on the size of the prize
 Strong driversto move FCC gasoline
and SR Naphtha to USWC
 Potential value driverfor VGO
movements
So...
 How many barrelsshould Hawaiiship
to the West Coast?
 How should the barrels split between
Richmondand El Segundo?

9. Multi-site modeling to communicate
opportunity value to key stakeholders
and drive to actions
 One-way economics easily pay for
ship charter
 Communicate resultsto key
stakeholders
 Drive to actions
• Initiated work with El Segundo to ensure
tank availability for LSVGO and Naphtha
• Initiated work with Richmond to ensure
tank availability for LSVGO and FCC
Gasoline
Optimal Transfers, bbls
Ship LSVGO to Richmond 1.5
Ship FCC Gasoline to Richmond 2.5
Ship SR Naphtha to Richmond 0
Ship LSVGO to El Segundo 4.1
Ship SR Naphtha to El Segundo 5.0
Delta Objective Function, $M/day 214
Freight Cost, $M/day 50
Max Enterprise Value, $MM/yr 60

10.  Solve time in seconds
 Easy drag and drop individual refinery cases
into multi-site model
 Transfer streams with recursed qualities
between sites
 Understand relative economics between sites
 Respect local constraints at each site
 Respect global constraints between sites
 Simultaneously solve to a single highest
objective function
3-Refinery Optimization
(transfer streams, global constraints)
Hawaii Refinery Optimization
(Hawaii Price, Demand, Refinery Posture)
Richmond Refinery
Optimization
(Richmond Price,
Demand, Refinery
Posture)
El Segundo Refinery
Optimization
(El Segundo Price,
Demand, Refinery
Posture)
Benefits of using Petro LP
Multi-site Optimization

11. Process
People
Tools
Summary of Discussion
Success Story:
Multi-site Optimization using Petro LP
and the continuous improvement on
process and people have resulted in
multi-millions value capture for
Chevron.
$

12. Any questions?