Chevron 2010 Annual Report Download - page 52

50 Chevron Corporation 2010 Supplement to the Annual Report
Downstream Lubricants and Trading
Lubricants
Chevron is among the leading global marketers of finished lubricants and is a top U.S. supplier of premium lubricant base oil. The
company provides differentiated products to meet the specific needs of commercial, retail, industrial and marine customers. The
product line of lubrication and coolant products includes well-known brands such as Havoline, Delo, Ursa, Meropa and Taro.
Through the company’s global network of 16 blending facilities, the Lubricants organization is well positioned to supply markets around
the world. This global network has enabled the company to consistently meet customer needs at world-class levels of reliability. Through
strategic partnerships with original equipment manufacturers, Chevron is also a leader in developing products to meet future engine and
machinery needs at its lubricant technology centers in Australia, Belgium and the United States.
Leveraging Success
In 2010, the Lubricants organization achieved strong financial results and world-class reliability performance. Complexity of operations
was further reduced as production facilities were optimized, product lines were streamlined and additional markets outside the United
States were exited. In February 2011, the company announced an agreement to sell its finished lubricants business in Spain.
The company’s strategic focus continued to be on key growth markets, such as China and Brazil, as well as building distribution channels,
with an emphasis on its marketing network. In 2010, the company launched a major initiative to strengthen its network in Brazil and lever-
age its two Brazilian lubricants-manufacturing plants, which together produce 1 million barrels of lubricating oils, 15,000 tons of industrial
greases and 35,000 barrels of coolants annually. Also, in China, the company increased lubricants sales volumes more than 25 percent
from 2009 levels by expanding the distributor network and forging new relationships with both Chinese and globally based original
equipment manufacturers. The company intends to continue growth initiatives in these and other key markets in 2011.
Building a Premium Base-Oil Leader
Preparations continued in 2010 for the 25,000-barrel-per-day premium base-oil facility at the company’s Pascagoula, Mississippi,
refinery. The final investment decision was reached in first quarter 2011 on the $1.4 billion project, and construction is scheduled to
be completed by year-end 2013. This addition to Chevron’s base-oil production capacity is expected to position the company as the
worldwide industry leader in premium base-oil production.
Trading
The Trading organization supports Chevron’s global supply chain by maximizing the company’s equity crude oil revenues, reducing
Downstream’s raw material and transportation costs, capturing profitable trading opportunities, and managing the market risks associ-
ated with holding physical positions in crude and finished products. The organization’s activities include optimizing the supply of crude
and other raw materials to Chevron’s refining network and integrating equity crude oil from Chevron’s upstream operations. In addition,
the company markets crude oil from Upstream operations to third parties and supplies finished products to serve Chevron’s marketing
system. Chevron handles more than 400 different grades of crude oil and petroleum products and manages nearly 5 million barrels per
day in commodity transactions.