Downstream & Chemicals Pierre Breber Executive Vice President
Profitable downstream & chemicals portfolio Fuels refining & marketing Focused, regional optimization Petrochemicals Advantaged feed, scale and technology Lubricants & additives Strategic positions serving global markets Refinery Integrated fuels value chain Olefins / Polyolefins complex Aromatics complex Premium base oil plant integrated with refinery World-scale additives plant
Strategy focused on leading returns World-class operational excellence Grow earnings across the value chain Target investments Lead the industry in returns 3
Global product demand Demand growth, 08 0 Compound annual growth rate Fuels Petrochemicals Lubricants & additives Distillate LPG/Naphtha Gasoline Fuel oil Ethylene Aromatics Premium base oil Additives Finished lubricants -3% 0% 3% 6% Global economic growth supports product demand Petrochemicals grow faster than fuels Evolving fuels and lubricants specifications IMO impacts fuel oil demand See Appendix: slide notes for definitions, source information, calculations, and other. Sources: Wood Mackenzie, NexantThinking Petroleum and Petrochemicals Economics program, Klein & Company 4
Financial performance Reported earnings $ billions 0 Adjusted earnings per barrel $/bbl 6 5 3 $.89 03 04 05 06 07 03 04 05 06 07 0.5% 5.3% 4.8% 3.0% Adjusted ROCE Asset sales and other special items Adjusted earnings 4.% CVX ranking relative to IOC competitors, being the highest IOC competitor range: BP, RDS, XOM Independents: ANDV, MPC, PSX, VLO See Appendix: reconciliation of non-gaap measures and slide notes for definitions, source information, calculations, and other. 5
Major capital projects Evaluation / FEED GS Caltex Mixed feed cracker olefins project Oronite China blending & shipping ChevronPhillips Chemical Co. USGC petrochemicals project II Singapore Refining Co. Resid upgrading Under construction Richmond refinery Modernization Salt Lake refinery Alkylation retrofit Commission / start-up ChevronPhillips Chemical Co. USGC petrochemicals project Singapore Refining Co. Clean mogas / cogeneration Oronite Singapore carboxylate 6
Integrated fuels value chains U.S. West Coast # brand share in Western U.S. Mexico retail market entry San Joaquin Valley equity crude Tightly integrated supply chain U.S. Gulf Coast Leading brand in Central America Top net cash margin refinery GOM / Venezuelan equity crudes Opportunity to integrate Permian Asia Pacific Long-standing partnerships World-class manufacturing Strengthening refinery flexibility and marketing positions Pascagoula South Korea Richmond Equity crude El Segundo Salt Lake Equity crude Central America Thailand Malaysia Philippines Singapore Mexico Colombia To Central America 7
Fuels marketing activities Mexico retail market entry Plan to grow by up to 350 sites Developing key branded marketer relationships Integrated with USWC supply chain ExtraMile c-store joint venture JV with Jacksons Food Stores Inc. Expand existing franchise offering Plan to double Western U.S. footprint to ~,400 sites by 07 Asia marketing position Plan to grow by up to 300 sites Enhance customer / retail offering 8
Refinery performance Utilization Percent 90% Energy efficiency Index 0 Net cash margin Index 35 4 5 4 70% 008 00 0 04 06 07 80 008 00 0 04 06 07 0 008 00 0 04 06 CVX ranking relative to competitors Competitor range CVX ranking relative to competitors Competitor range CVX ranking relative to competitors Competitor range See Appendix: slide notes for definitions, source information, calculations, and other. Sources: Solomon Associates and Chevron data 9
Petrochemicals portfolio U.S. Gulf Coast Middle East Asia Pacific ChevronPhillips Chemical Advantaged feed, scale & technology # HDPE marketer Leading NAO producer MarTECH Loop Slurry GS Caltex Scale, location advantage Texas 4 th largest aromatics single site Integration with refining Saudi Arabia Qatar Proximity to Asian demand Olefins / Polyolefins Aromatics See Appendix: slide notes for definitions, source information, calculations, and other. 0
Advantaged feedstock Ethylene cash costs $ per metric ton,000 500 Petrochemicals profitability Oil / gas price ratio continues to benefit lighter feedstocks North America ethane maintains advantage over Asia naphtha Middle East ethane North America ethane Asia naphtha Integrated polyethylene margins remain strong 03 07 average 08 0 projected average Source: NexantThinking Petroleum and Petrochemicals Economics program
ChevronPhillips Chemical performance Days away from work rate Utilization Percent Reported earnings $ billions 0. 00% 4 0. 80% 0.0 0 03 04 05 06 07 60% 0 03 04 05 06 07 0 0 03 04 05 06 07 CPChem American Chemical Council average CPChem Industry average CPChem 00% See Appendix: slide notes for definitions, source information, calculations, and other. Source: NexantThinking Petroleum and Petrochemicals Economics program
Lubricants and additives Premium base oil Leading producer, global slate Finished lubricants Formulation technology expertise Strong global brands Additives Leading global supplier Premium base oil plant integrated with refinery Equity blend plants Additives manufacturing and supply Targeting key growth markets Base oil distributive area with 5 supply hubs See Appendix: slide notes for definitions, source information, calculations, and other. 3
Lubricants and additives activities Premium base oil Reliable, global operations Improved average yield ~5% Lowered supply chain costs ~5% ICONIC Lubricantes JV with Ipiranga in Brazil Ipiranga and Texaco brands ~3% market share Additives growth World-class reliability Award winning passenger car additives Positioned for China growth 4
Technology Manufacturing ISOALKY technology Next generation hydro-processing catalyst Product development Techron OEM partnerships Renewable fuels Digital solutions Customer experience & mobile pay Global e-commerce platform Sensors & predictive maintenance 5