Chevron PNZ Steamflood Project Achieves First Steam Injection

The $340 million LSP, which is the final test phase for the steamflood project, is expected to lead to full-field steamflooding of the First Eocene reservoir, marking the first commercial application of a conventional steamflood in a carbonate reservoir anywhere in the world.

"Full-field deployment of steamflood technology in the PNZ would significantly increase recovery of crude oil reserves, confirm the technology's potential applicability in other carbonate oil fields and build on Chevron's steamflood capabilities that date back five decades," said George Kirkland, executive vice president, Chevron Global Upstream and Gas.

The LSP is the third in a series of staged tests to validate the feasibility of applying the enhanced oil recovery technology of steamflooding to unlock the producing potential of the heavy Eocene oil of the PNZ's carbonate reservoirs. Previous tests included the Small Scale Test (SST), which was successfully completed in 2008, and simple steam stimulation testing, conducted in the late 1990s.

Steamflooding involves injecting steam into heavy-oil reservoirs to heat the crude oil underground, reducing its viscosity and allowing its extraction through wells.

Chevron has successfully employed steamflooding to produce heavy oil from sandstone reservoirs at Kern River, Calif., for more than 40 years and at Duri in Sumatra, Indonesia, for 25 years. The company is recognized as the world's leader in steamflood technology.

SAC operates on behalf of the Kingdom of Saudi Arabia, the Kingdom's 50 percent undivided interest in the petroleum resources of the onshore PNZ between the Kingdom and the State of Kuwait. SAC's operating agreement with the Kingdom was recently extended and amended, and runs until February 2039.

The operations include four fields in the area - Wafra, South Umm Gudair, South Fuwaris and Humma - that produce mainly heavy crude from 10 reservoirs. In 2004, the 3 billionth barrel of oil was produced in the onshore PNZ.

Chevron Corporation is one of the world's leading integrated energy companies, with subsidiaries that conduct business across the globe. The company's success is driven by the ingenuity and commitment of approximately 62,000 employees who operate across the energy spectrum. Chevron explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and other energy products; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops and commercializes the energy resources of the future, including biofuels and other renewables. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com.

Cautionary Statement Relevant to Forward-Looking Information for the Purpose of "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995.

Some of the items discussed in this press release are forward-looking statements about Chevron's activities in the PNZ. Words such as "anticipates," "expects," "intends," "plans," "targets," "projects," "believes," "seeks," "estimates," "budgets" and similar expressions are intended to identify such forward-looking statements. The statements are based upon management's current expectations, estimates and projections; are not guarantees of future performance; and are subject to certain risks, uncertainties and other factors, some of which are beyond the company's control and are difficult to predict. Among the factors that could cause actual results to differ materially are changes in prices of, demand for and supply of crude oil and natural gas; actions of competitors; the potential disruption or interruption of production and development activities due to war, accidents, political events, civil unrest, or severe weather; government-mandated sales, divestitures, recapitalizations and changes in fiscal terms or restrictions on scope of company operations; and general economic and political conditions. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Note to Editors:

The LSP will evaluate production response to steaming, variability of response by pattern, recovery efficiency in the reservoir contacted by the injected steam, as well as the potential cost for installation and operation of full-field development. A baseline of the non-steamflood production from the LSP's 25 producing wells has been established, and it will serve as an important basis of comparison for establishing the effectiveness of steamflood production. The LSP also includes 16 wells for injecting steam and 16 observation wells for monitoring reservoir conditions.

The LSP has benefited from the observations and test results recorded for the SST. The SST demonstrated that poor-quality Eocene produced water could be processed to generate high-purity water for steam generation and that the steam could be injected over a long duration in the PNZ's carbonate reservoirs. It also has been employed to test mechanical and chemical strategies for coping with subsurface corrosion and scaling from steamflooding.

As of May 2009, the LSP had recorded more than 3 million worker hours for employees and contractors without any lost time due to accidents, including during several months of complex simultaneous operations involving drilling and workover activities and installation of a range of surface infrastructure.

SOURCE: Chevron Corporation

For Chevron Corporation 
Margaret Cooper, +1-713-372-4919 (Houston)