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52 Chevron Corporation 2009 Annual Report
FS-PB
Note 13
Properties, Plant and Equipment1
At December 31 Year ended December 31
Gross Investment at Cost Net Investment Additions at Cost2 Depreciation Expense3
2009 2008 2007 2009 2008 2007 2009 2008 2007 2009 2008 2007
Upstream
United States $ 57,645 $ 54,156 $ 50,991 $ 21,885 $ 22,294 $ 19,850 $ 3,496 $ 5,374 $ 5,725 $ 3,963 $ 2,683 $ 2,700
International 93,177 84,282 71,408 54,253 51,140 43,431 9,750 13,177 10,512 6,651 5,441 4,605
Total Upstream 150,822 138,438 122,399 76,138 73,434 63,281 13,246 18,551 16,237 10,614 8,124 7,305
Downstream
United States 18,915 17,394 15,807 10,089 8,977 7,685 1,871 2,032 1,514 664 629 509
International 12,319 11,587 10,471 6,806 6,001 4,690 1,424 2,285 519 437 469 633
Total Downstream 31,234 28,981 26,278 16,895 14,978 12,375 3,295 4,317 2,033 1,101 1,098 1,142
Chemicals
United States 730 725 678 331 338 308 25 50 40 31 19 19
International 913 828 815 545 496 453 85 72 53 35 33 26
Total Chemicals 1,643 1,553 1,493 876 834 761 110 122 93 66 52 45
All Other4
United States 4,569 4,310 3,873 2,548 2,523 2,179 354 598 680 325 250 215
International 20 17 41 11 11 14 3 5 5 4 4 1
Total All Other 4,589 4,327 3,914 2,559 2,534 2,193 357 603 685 329 254 216
Total United States 81,859 76,585 71,349 34,853 34,132 30,022 5,746 8,054 7,959 4,983 3,581 3,443
Total International 106,429 96,714 82,735 61,615 57,648 48,588 11,262 15,539 11,089 7,127 5,947 5,265
Tota l $ 188,288 $ 173,299 $ 154,084 $ 96,468 $ 91,780 $ 78,610 $ 17,008 $23,593 $19,048 $ 12,110 $ 9,528 $ 8,708
1 Other than the United States and Nigeria, no other country accounted for 10 percent or more of the company’s net properties, plant and equipment (PP&E) in 2009 and 2008.
Only the United States had more than 10 percent in 2007. Nigeria had net PP&E of $12,463 and $10,730 for 2009 and 2008, respectively.
2 Net of dry hole expense related to prior years’ expenditures of $84, $55 and $89 in 2009, 2008 and 2007, respectively.
3 Depreciation expense includes accretion expense of $463, $430 and $399 in 2009, 2008 and 2007, respectively.
4 Primarily mining operations, power generation businesses, real estate assets and management information systems.
Note 14
Litigation
MTBE Chevron and many other companies in the petroleum
industry have used methyl tertiary butyl ether (MTBE) as a
gasoline additive. Chevron is a party to 50 pending lawsuits
and claims, the majority of which involve numerous other
petroleum marketers and refiners. Resolution of these lawsuits
and claims may ultimately require the company to correct
or ameliorate the alleged effects on the environment of prior
release of MTBE by the company or other parties. Additional
lawsuits and claims related to the use of MTBE, including
personal-injury claims, may be filed in the future. The compa-
ny’s ultimate exposure related to pending lawsuits and claims
is not determinable, but could be material to net income in
any one period. The company no longer uses MTBE in the
manufacture of gasoline in the United States.
Ecuador Chevron is a defendant in a civil lawsuit before the
Superior Court of Nueva Loja in Lago Agrio, Ecuador,
brought in May 2003 by plaintiffs who claim to be represen-
tatives of certain residents of an area where an oil production
consortium formerly had operations. The lawsuit alleges
damage to the environment from the oil exploration and
production operations and seeks unspecified damages to fund
environmental remediation and restoration of the alleged
Note 13 Litigation – Continued
environmental harm, plus a health monitoring pro-
gram. Until 1992, Texaco Petroleum Company (Texpet),
a subsidiary of Texaco Inc., was a minority member of this
consortium with Petroecuador, the Ecuadorian state-owned
oil company, as the majority partner; since 1990, the opera-
tions have been conducted solely by Petroecuador. At the
conclusion of the consortium and following an independent
third-party environmental audit of the concession area,
Texpet entered into a formal agreement with the Republic of
Ecuador and Petroecuador for Texpet to remediate specific
sites assigned by the government in proportion to Texpet’s
ownership share of the consortium. Pursuant to that agree-
ment, Texpet conducted a three-year remediation program
at a cost of $40. After certifying that the sites were properly
remediated, the government granted Texpet and all related
corporate entities a full release from any and all environmen-
tal liability arising from the consortium operations.
Based on the history described above, Chevron believes
that this lawsuit lacks legal or factual merit. As to matters of
law, the company believes first, that the court lacks juris-
diction over Chevron; second, that the law under which
plaintiffs bring the action, enacted in 1999, cannot be
applied retroactively; third, that the claims are barred by
the statute of limitations in Ecuador; and, fourth, that the
lawsuit is also barred by the releases from liability previously
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts