Chevron 2007 Annual Report Download - page 28

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26
Downstream
Above, left to right: Pembroke Refinery, United Kingdom; Chevron service station, San Ramon,
California; Clean fuels test vehicle, Alameda-Contra Costa Transit District, California.
Strategy: Improve base business returns and
selectively grow with a focus on integrated
value creation.
Chevron’s downstream operations include refining, fuels and
lubricants, marketing, supply and trading, and transportation.
Our refining operations are strategically located to serve the
world’s fastest-growing markets, in Asia and North America,
and they are configured to refine significant volumes of low-
cost crude oils into high-value products. Our three motor fuel
brands — Chevron, Texaco and Caltex — are among the most
respected in the industry.
Refining: To improve margins, Chevron is selectively investing
in its refining system to process greater quantities of low-cost
heavy and high-sulfur crude oils. By the end of 2007, major
upgrades had been completed at refineries in El Segundo,
California; Pembroke, United Kingdom; and at our affiliate
refinery in Yeosu, South Korea (see Pages 10–11). After com-
pleting an upgrade of our Pascagoula, Mississippi, refinery in
2006, we announced plans to build a unit at the refinery that
will increase gasoline production by approximately 10 percent,
or about 600,000 gallons per day. Construction is expected to
begin in 2008 and be completed by mid-2010.
At a Glance In 2007, Chevron processed approximately 1.8 million barrels of crude oil per day
and averaged approximately 3.5 million barrels per day of refined product sales worldwide.
Downstream’s most significant areas of operations are sub-Saharan Africa, Southeast Asia, South
Korea, the United Kingdom, the U.S. Gulf Coast extending into Latin America, and the U.S. West
Coast. We hold interests in 18 fuel refineries and one asphalt plant and market under the Chevron,
Texaco and Caltex motor fuel brands. Products are sold through a network of more than 25,000
retail stations, including those of affiliated companies.
In an ongoing effort to focus on areas of market strength, we
divested our interests in nonstrategic refining and other manu-
facturing properties in the Netherlands.
Unplanned shutdowns caused our refining utilization rate
to decline from the previous year. An aggressive effort is
under way to address reliability issues and improve our
utilization rate.
Marketing: Chevron’s three brands hold top positions in their
markets around the world. In 2007, we continued to expand
our U.S. Texaco marketing network to more than 2,400
sites and to strengthen our international Caltex and Texaco
brands through the phased introduction of our performance-
enhancing gasoline additive, Techron.
To improve returns, we continued to divest nonstrategic
assets. In 2007, we sold our fuels and marketing businesses
in Belgium, Luxembourg and the Netherlands; our retail fuels
business in Uruguay; and our North America credit card
businesses.