Kevin Regan Chevron Corporation IPAA June 17 2005

Kevin Regan Chevron Corporation IPAA June 17, 2005 © Chevron 2005

World Economy YOY GDP Change 10% 10. 0 8% 8. 0 China 6% 6. 0 4% 4. 0 World volatility U. S. Europe Japan 2% 2. 0 0% 0. 0 2001 2005 2001 © Chevron 2005 2010 2015 2020 2025 U. S. and China continue to drive global growth while Japan and the Eurozone suffer economic relapse 2

Oil demand…key drivers and uncertainties … Key drivers n Population growth n China/India Global Oil Demand MMB/D n Income expansion Other Developing World n Transportation Developing Asia Uncertainties n Chinese economy n Efficiency gains & technology China Other OECD North America n Future energy policy; Refinery expansion © Chevron 2005 3

World Population Growth Creates Future Energy Demand Billions of People Global population grows by 1. 5 Billion Other Developing World Other Developing Asia India China Developed World 2020 Source: UN © Chevron 2005 4

Income Expansion Underpins Growth in Energy Demand Oil per Capita (Bbl/day per thousand) U. S. Europe Asian-Tiger Growth Trajectory India China Urban Rural 5 50 GDP per Capita ($1, 000 PPP) © Chevron 2005 5

Refinery Capacity is Effectively Full Refinery Capacity (MMB/D) 2003 1995 © Chevron 2005 6

Investment in Refining Capacity Expansion (MB/D) Annual Average Capacity Additions 65% in Asia & Middle East © Chevron 2005 7

Product Specifications Increasingly Stringent World Demand for Low. Sulfur Gasoline © Chevron 2005 Source: Purvin & Gertz 8

Long-Term Oil Supply in MMB/D Liquids Supply Gap Unconventional Supply NGLs, Condensate, Processing Gains, Etc. ’Ellipse of Plenty’ Non-’Ellipse of Plenty’ © Chevron 2005 9

World Oil Supply n 2005 -2008: l Will OPEC capacity additions be sufficient to meet demand growth? l Even if crude is available, will supply-chain restrictions impact oil markets? n Long-Term: l Will the industry meet the investment challenge? l Can unconventional resources be developed aggressively to meet rising oil demand? © Chevron 2005 10

Resources ample…. supply deliverability? 25% 28% other regions 75% OECD and Asia. Pacific 72% Infrastructure & Transportation Future Oil & Gas Demand © Chevron 2005 Middle, East, the FSU, and West Africa Future Oil & Gas Supply 11

The New Search for Energy-Security Energy Capital © Chevron 2005 Historic Silk Roads 12

New Relationships are Most Likely Middle East - Russia Asia Middle East - Asia A New Age of OPEC? © Chevron 2005 13

Gas Demand Growth Greatest in Developing Asia Mature Markets Grow Slow – But Require Large Volumes Average Annual Demand Growth 1. 3% 4. 3% 1. 6% 1. 8% 2. 3% 5. 1% 4. 4% 2. 3% Source: IEA © Chevron 2005 14

Nearly ¾ Gas Resource Concentrated in Russia / Middle East /North Africa © Chevron 2005 15

By 2030, more than 50% of Interregional Trade will be LNG © Chevron 2005 16

Asia-Pacific LNG – Supply/Demand Balance in Favor of Buyers or Sellers? Bearish Price Factors • Supplier competition (Yemen & Iran joining the fray) • Cost reductions in liquefaction and shipping • North Asian utilities losing monopoly position Bullish Price Factors • High oil /fuel oil prices • Baja California likely to receive LNG before 2010 • Indonesia supply problems, Oman sold out. Balance still seems to favor buyers – but contract prices have risen above lows set by 2002 Chinese deals © Chevron 2005 17

Chevron Operations in Asia 1. China – One of China's leading foreign oil producers; interests include Caltex service stations, storage terminals and the manufacture of HDPE pipe. 2. China – China Sea is the site of significant production. 3. South Korea – At Yosu, South Korea, GSCaltex's 650, 000 -barrel refinery complex is among the world's largest. 4. Thailand – Thailand's No. 1 oil producer, operating about 500 Caltex stations, a power plant and — in partnership — a refinery. 5. Philippines – $4. 5 billion Malampaya deepwater project to supply gas for power plants is Philippine's largest industrial undertaking. 6. Indonesia – Besides 50 -year, 10 billion barrel production, P. T. Caltex Pacific Indonesia sells chemicals, lubricants and operates Dumai Terminal. 7. Indonesia – Bolstered by world's largest steamflood, Duri Field produced a total of nearly 210, 000 barrels of oil per day in 2004. 8. Indonesia – On Java, CTEI operates a 90 megawatt geothermal power plant and supplies steam to a 55 -megawatt plant. 9. Australia – Australia interests include the North West Shelf, the Greater Gorgon gas fields and two refineries. © Chevron 2005 18

Chevron Exploration & Production Activities in Asia Production: Chevron is the largest oil producer in Indonesia and Thailand. It has important interests in the region, including Australia's North West Shelf; the Philippines' $4. 5 billion Malampaya Deep Water Natural Gas Project; and Indonesia's Duri Field, site of the world's largest steamflood, which produced a total of nearly 212, 000 barrels of oil per day in 2004. Exploration: The company is a leading player in China's high-potential Bohai Bay; has had a high success rate in exploratory drilling offshore in Thailand since 2000, discovering reserves in excess of 50 million barrels during that time; and is now adding to its portfolio by actively exploring in Cambodia. © Chevron 2005 19

Building an Integrated Gas Business Regional LNG − Asia Pacific − Atlantic Basin GTL − Nigeria − Qatar − Australia © Chevron 2005 CVX Gas Resources Pipeline LNG Liquefaction GTL Supply Route Re-gas Terminal Focused on ~100 TCF of undeveloped gas resource 20

The end © Chevron 2005 21

Community Partners In Papua New Guinea, a company-created foundation ensures that sustainable community and environmental initiatives will continue beyond the end of the company's operations there in 2003. In Indonesia, 30, 000 students have furthered their education through company scholarships. In the Philippines, with government and NGO partners, the company sponsors housing, job training and education for street children. Sustainable development initiatives associated with the Malampaya Deepwater Gas-to-Power Project, a joint venture in the Philippines, has won global recognition. February 2005 -- Chevron. Texaco will contribute $10 million over the next two to three years for longer-term tsunami relief, primarily in Indonesia. Including an earlier contribution of about $2 million to Indonesia, Malaysia, Sri Lanka, India and Thailand, this brings Chevron. Texaco's total tsunami relief contributions to about $12 Million. Environment & Safety At Australia's Barrow Island, Chevron has earned international awards for its protection of native species; in Western Australia, the company has planted approximately 148 acres (60 hectares) of trees to absorb carbon dioxide and is investigating re-injection of carbon dioxide as part of the proposed Gorgon gas project. In Indonesia, Caltex Pacific Indonesia (CPI) was among the first oil firms to institute third-party environmental audits. In Singapore, the company's marine fuels terminal and lubricants blending plant each earned awards from the Ministry of Manpower for safety performance in 2001, 2002 and 2003. © Chevron 2005 22

Jan. 12, 2005 – Chevron announced today that its affiliate has discovered oil in four exploration wells in offshore Cambodia Block A. The 6, 278 square kilometer block, encompassing the Khmer Basin with water depths averaging 240 feet, was awarded to Chevron Overseas Petroleum (Cambodia) Ltd. (COPCL), and its partners in March 2002. COPCL has a 55 percent interest in the block and is the operator. Analysis of samples indicates the oil is 44 degree API crude. The five-well campaign began on October 13, 2004, The other partners in Block A are Moeco Cambodia Ltd. (30 percent interest) and LG Caltex Oil Co. (15 percent interest). Aug. 24, 2004 -- Chevron. Texaco Corp. today announced a significant natural gas discovery at its Wheatstone-1 well, located offshore 110 miles west-northwest of Dampier in Western Australia. The lease is held 100 percent by Chevron. The Wheatstone Field extends north into an adjacent permit, WA -253 -P, where Chevron also hold a 100 percent interest. The Wheatstone-1 well was spudded on July 23, 2004, and drilled to a true vertical depth of 11, 096 feet using the semisubmersible Transocean "SEDCO 703" drilling rig in water depths of approximately 700 feet. Chevron. Texaco Australia is operator and joint-venture participant in the Gorgon development and permits in the Greater Gorgon Area (along with Exxon. Mobil and Shell), joint-venture participant in the North West Shelf Venture (along with Woodside, BHP Billiton, Shell, BP, Mitsubishi, and Mitsui), and operator and joint venture participant in the Barrow Island Thevenard Island oil fields, all located off the northwest coast of Australia. © Chevron 2005 23

Cnooc to go after Unocal? Cnooc May Pursue Bid for U. S. Oil Firm Offer Would Be a Challenge To Chevron's Recent Deal To Pay $16 Billion for Unocal By MATT POTTINGER in Beijing and RUSSELL GOLD in Dallas Staff Reporters of THE WALL STREET JOURNAL June 8, 2005; Page A 7 In a potential challenge to Chevron Corp. 's recent agreement to buy Unocal Corp. for about $16 billion, Chinese oil and gas producer Cnooc Ltd. says it is considering whether to make a rival offer for the U. S. company. Cnooc, China's third-largest oil company and the country's biggest offshore producer, issued a statement yesterday saying it "is continuing to examine its options with respect to Unocal. These options include a possible offer by the company for Unocal, but no decision has been made in this respect. " Cnooc, whose shares trade in Hong Kong and New York, said "no assurances can be made that the company will ultimately make an offer for Unocal, or if any such offer is made, whether any agreement will be reached between the company and Unocal. " A spokesman for Cnooc, the listed unit of China National Offshore Oil Corp. , said the statement, which was issued to the Hong Kong Stock Exchange, is intended to provide a degree of clarity after recent media reports gave conflicting accounts about whether Cnooc is still interested in bidding for the El Segundo, California, oil and gas company. According to people familiar with the matter, Cnooc said on April 1 that it would make a definitive offer to buy Unocal in time for Unocal's board meeting the following day. But Cnooc's chief executive, Fu Chengyu, came back the morning of the Unocal board meeting and said he wouldn't be able to make the all-cash offer after all, opening the way for Chevron, of San Ramon, California, to strike a deal, the people said. Documents filed late last month by Chevron with the U. S. Securities and Exchange Commission support that version of events, although they don't mention Cnooc or Mr. Fu by name, instead referring to the "initial potential acquiror" of Unocal spokesman Barry Lane said he had no comment on the Cnooc development. Chevron spokesman Don Campbell said: "It would be inappropriate to comment on the possible actions of others. Our focus and strong intention is to see this transaction through to successful conclusion. We believe our offer, accepted by the Unocal board, is attractive and has a high degree of certainty as to completion. " Chevron's offer for Unocal is a cash-and-stock package that was valued at $16. 8 billion at the time the deal was struck in early April. The company is waiting for U. S. antitrust clearance and approval of the proxy-material wording, and it is unclear when that approval might be forthcoming. Cnooc's continuing fascination with Unocal despite the significant price tag -- a successful bid would constitute by far the largest overseas takeover by a Chinese company -- raises questions about Cnooc's motivations, industry analysts say. On the one hand, Unocal has petroleum fields in Indonesia and Thailand that would complement Cnooc's reserves and improve its expertise in drilling for natural gas. © Chevron 2005 At the same time, there is evidence that the Chinese government is exerting pressure on state-controlled oil companies such as Cnooc to purchase petroleum fields abroad in order to placate a growing sense of insecurity in Beijing about China's ability to procure ample energy supplies. Premier Wen Jiabao has taken charge of a newly created, top-level panel on energy matters. Convened last week for the first time, the panel has set out to formulate a master strategy for China's energy needs. Chinese state media say the panel's missions include "working to secure overseas oil and gas reserves. " 24

What happens to natural gas if today’s oil price environment continues? © Chevron 2005 25

Long-term N. America Power Generation n At a gas price of $5. 00/MMBTU, new-build combined cycle plants are competitive compared to coal, nuclear and wind, due to low capital costs and high fuel efficiency n New coal capacity increases from 7% of additions during 2005 -2010 to 32% during 2011 -2020 n Gas dominates capacity additions, capturing ~60% of additions to 2020 n Limited amount of new nuclear capacity possible by late next decade? l Risk of earlier than projected retirements of existing capacity © Chevron 2005 26

North America Gas Outlook: 2005 -2008 n Gas Demand for power generation grows 1 BCFD/yr on economic growth of 3%/yr l Existing surplus new gas-fired capacity satisfies most of the demand growth for electricity n Indigenous production grows modestly at best (~0. 1 0. 2 BCFD/yr) n LNG imports increase steadily (~0. 6 - 1 BCFD/yr), driven by growing Atlantic Basin liquefaction capacity & new / expanded N. American re-gas n Tight gas market points to declining industrial demand to balance market n Proposed Henry Hub price for Business Plan: l Then-Current$: 2006=$6. 75, 2007=$6. 00, 2008=$5. 50 © Chevron 2005 27

Gas Remains Competitive at $5/MMBTU © Chevron 2005 28

U. S. Power – Will It Favor Gas (LNG) or Coal Decisions will hinge on: · Gas price level and security of supply · Environmental costs for coal, especially CO 2 · Cost recovery for coal plant investment · Desire for greater fuel diversity for new generation New coal required in the long run - but strong growth for LNG will delay growth for coal – and vice versa. © Chevron 2005 29

Demand for Natural Gas © Chevron 2005 30

Macro Environment Slides for Asia. Pacific © Chevron 2005 31

Portfolio is Well-Positioned Upstream Production (2003) (1) MBOED North America Europe Middle East & Caspian Asia Pacific Africa South America Liquids © Chevron 2005 Gas (1) Includes Other Produced Volumes, i. e. Boscan OSA and Athabasca bitumen. 32

Downstream Markets n 2005 -2008: l How effective will refiners be in responding to near -term challenges? Desulphurization, conversion, growing distillate demand, and uneven regional growth n Long-Term: l Additions of conversion capacity may aid in covering any liquids supply ‘gap’? Minimize use of fuel oil in stationary applications © Chevron 2005 33