Chevron 2013 Annual Report Download - page 49

Chevron Corporation 2013 Annual Report 47
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 ten pending lawsuits
and claims, the majority of which involve numerous other
petroleum marketers and reners. Resolution of these lawsuits
and claims may ultimately require the company to correct
or ameliorate the alleged eects 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 led in the future. e compa-
ny’s ultimate exposure related to pending lawsuits and claims
is not determinable. e company no longer uses MTBE in
the manufacture of gasoline in the United States.
Ecuador Chevron is a defendant in a civil lawsuit initiated in
the Superior Court of Nueva Loja in Lago Agrio, Ecuador, in
May 2003 by plaintis who claim to be representatives of cer-
tain residents of an area where an oil production consortium
formerly had operations. e lawsuit alleges damage to the
environment from the oil exploration and production opera-
tions and seeks unspecied damages to fund environmental
remediation and restoration of the alleged environmental
harm, plus a health monitoring program. Until 1992, Texaco
Petroleum Company (Texpet), a subsidiary of Texaco Inc.,
was a minority member of this consortium with Petroecuador,
Note 13
Properties, Plant and Equipment1
At December 31 Year ended December 31
Gross Investment at Cost Net Investment Additions at Cost2,3 Depreciation Expense4
2013 2012 2011 2013 2012 2011 2013 2012 2011 2013 2012 2011
Upstream
United States $ 89,555 $ 81,908 $ 74,369
$ 41,831 $ 37,909 $ 33,461 $ 8,188 $ 8,211 $ 14,404 $ 4,412 $ 3,902 $ 3,870
International 169,623 145,799 125,795 104,100 85,318 72,543 27,383 21,343 15,722 8,336 8,015 7,590
Tota l Upstrea m 259,178 227,707 200,164 145,931 123,227 106,004 35,571 29,554 30,126 12,748 11,917 11,460
Downstream
United States 22,407 21,792 20,699 11,481 11,333 10,723 1,154 1,498 1,226 780 799 776
International 9,303 8,990 7,422 4,139 3,930 2,995 653 2,544 443 360 308 332
Tota l Downstream 31,710 30,782 28,121 15,620 15,263 13,718 1,807 4,042 1,669 1,140 1,107 1,108
All Other5
United States 5,402 4,959 5,117 3,194 2,845 2,872 721 415 591 286 384 338
International 143 33 30 84 13 14 23 4 5 12 5 5
Total All Other 5,545 4,992 5,147 3,278 2,858 2,886 744 419 596 298 389 343
Total United States 117,364 108,659 100,185 56,506 52,087 47,056 10,063 10,124 16,221 5,478 5,085 4,984
Total International 179,069 154,822 133,247 108,323 89,261 75,552 28,059 23,891 16,170 8,708 8,328 7,927
Tota l $ 296,433 $ 263,481 $ 233,432 $ 164,829 $ 141,348 $ 122,608 $ 38,122 $ 34,015 $ 32,391 $ 14,186 $ 13,413 $ 12,911
1 Other than the United States, Australia and Nigeria, no other country accounted for 10 percent or more of the company’s net properties, plant and equipment (PP&E) in 2013.
Australia had $31,464, $21,770 and $12,423 in 2013, 2012 and 2011, respectively. Nigeria had PP&E of $18,429, $17,485 and $15,601 for 2013, 2012 and 2011, respectively.
2 Net of dry hole expense related to prior years’ expenditures of $89, $80 and $45 in 2013, 2012 and 2011, respectively.
3 Includes properties acquired with the acquisition of Atlas Energy, Inc., in 2011.
4 Depreciation expense includes accretion expense of $627, $629 and $628 in 2013, 2012 and 2011, respectively.
5 Primarily mining operations, power and energy services, real estate assets and management information systems.
the Ecuadorian state-owned oil company, as the majority
partner; since 1990, the operations 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 specic sites assigned by the govern-
ment in proportion to Texpet’s ownership share of the
consortium. Pursuant to that agreement, Texpet conducted a
three-year remediation program at a cost of $40. After certi-
fying that the sites were properly remediated, the government
granted Texpet and all related corporate entities a full release
from any and all environmental liability arising from the con-
sortium operations.
Based on the history described above, Chevron believes
that this lawsuit lacks legal or factual merit. As to mat-
ters of law, the company believes rst, that the court lacks
jurisdiction over Chevron; second, that the law under which
plaintis 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 given to Tex-
pet by the Republic of Ecuador and Petroecuador and by the
pertinent provincial and municipal governments. With regard
to the facts, the company believes that the evidence conrms
that Texpet’s remediation was properly conducted and that
the remaining environmental damage reects Petroecuador’s
Note 13 Properties, Plant and Equipment