Chevron 2008 Annual Report Download - page 4

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Net income of $23.9 billion rep-
resented a 28.1 percent increase
over the previous year. Capital and
explora tory expenditures for 2008
were $22.8 billion, and return on
capital employed was 26.6 percent.
For the 21st consecutive year, we
increased our annual dividend payout.
We continued to return cash to our
stock holders through stock buyback
programs, purchasing $8 billion of our
common shares during 2008. In total
stockholder return, we outperformed
the S&P 500 by nearly 19 percentage
points. While our total stockholder
return was negative 18.4 percent, our
results stood out compared with the
market and most peers, underscoring
our strength and discipline.
Our strategies focus on delivering
value over time: In 2008, we
advanced our queue of 40 major
capital projects, each with a net
Chevron share of investment exceed-
ing $1 billion. We added 1.3 billion
barrels of oil-equivalent proved
2008 was a momentous year for Chevron. We reported our fth consecutive
year of record earnings. We had exceptional success nding new sources
of crude oil and natural gas. We started up ve major capital projects, with
more to follow. And as economic challenges gripped the world’s attention in
the second half of the year, Chevron people addressed those challenges and
focused on the long term — helping to ensure safe, diversied supplies of
energy for decades to come.
reserves, replacing 146 percent of
oil-equivalent production this year.
We also signicantly improved our
operating reliability at our eight
company- operated reneries.
The people of Chevron managed
these achievements while accom-
plishing one more: 2008 was our
safest year ever. We earned one of
the best safety records in our indus-
try, making our global operations
four times safer than ve years ago.
Delivering Energy Now
In the upstream, we brought proj-
ects onstream that are as large as
they are long-term.
In the U.S. Gulf of Mexico, we
began production at our deep water
Blind Faith Field. In Kazakhstan,
Tengizchevroil completed major
expansion projects that nearly
doubled production capacity from
the giant Tengiz Field. In Indonesia,
an expansion of our Duri Field
started production. In Australia,
our fth liqueed natural gas proc-
essing unit came onstream. And in
Nigeria, our Agbami deepwater eld
celebrated rst oil.
The ability to efciently produce over
decades depends as much on strong
partnerships as on operational and
technical skills. In 2008, we extended
our agreement with the Kingdom of
Saudi Arabia for 30 years to operate
the Kingdom’s 50 percent crude
oil and natural gas interests in the
Partitioned Neutral Zone between
the Kingdom and the State of Kuwait.
To increase exibility in rening the
world’s full range of crude oils, we
upgraded key reneries in 2008.
Reneries in California, Mississippi
and at our 50 percent-owned Yeosu
Renery in South Korea now trans-
form lower-cost, heavier crude oils
into premium-value products. These
major upgrades also included facilities
to improve long-term reliability.
To Our Stockholders