Download PDF - Chevron
Download PDF - Chevron
Download PDF - Chevron
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
Downstream Highlights<br />
D O W N S T R E A M<br />
Downstream is an important element of Downstream Overview<br />
<strong>Chevron</strong>Texaco’s operation as a vertically<br />
integrated energy company. The company<br />
enjoys a strong global presence in<br />
all segments of the downstream industry<br />
– refining, marketing and transportation.<br />
Downstream has complex refining assets,<br />
a strong brand presence for its refined<br />
products and a significant market share<br />
in each of its focus areas – the West Coast<br />
and Gulf Coast of North America, Latin<br />
America, Asia, and sub-Saharan Africa.<br />
Headquartered in San Ramon,<br />
California, Downstream operates in<br />
approximately 170 countries on six continents,<br />
marketing primarily under the<br />
Areas of Focus Refineries<br />
<strong>Chevron</strong>, Texaco and Caltex brands. In 2004, Downstream completed a restructuring of its worldwide operations,<br />
transforming from individual geographic businesses into a global, functional structure to streamline the organization<br />
and drive improved efficiency through standardized best practices and supply chain optimization. Downstream<br />
is focused on building on the momentum generated during this period of change and improving the returns on its<br />
capital invested in the key areas of market and supply strength.<br />
INDUSTRY CONDITIONS IN 2004<br />
Downstream industry conditions improved in 2004 relative to 2003, reflecting global economic expansion and strong<br />
demand growth for light products (motor gasoline, jet fuel, aviation gasoline and diesel fuel). In China alone, energy<br />
demand surged nearly 15 percent in 2004, exerting a strong influence on regional energy markets.<br />
Market conditions were especially beneficial during 2004 for owners of the more complex refineries capable<br />
of processing medium to heavy crude oils. During most of the year, the differential in prices between high quality,<br />
light-sweet crude oils, such as the U.S. benchmark West Texas Intermediate, and the heavier crudes was unusually<br />
wide. The upward trend in prices in 2004 for lighter crude oils tracked the increased demand for light products,<br />
as all refineries could process these higher quality crudes. However, the demand and price for the heavier crudes<br />
were dampened due to the limited number of refineries that were able to process this lower quality feedstock. In the<br />
United States, refined-product margins during 2004 were<br />
also supported by tight inventory supplies, as refinery<br />
downtime due to maintenance, clean-fuels modifications<br />
and third quarter hurricane-related disruptions all contributed<br />
to lower inventory levels for the industry.<br />
The demand for light products in 2004 was strong,<br />
especially in Asia. With the exception of Europe, rising<br />
spot prices for retail fuels were not always fully recoverable<br />
in the market, particularly in regions such as Latin<br />
America and Asia. In addition, U.S. West marketing fuel<br />
margins fell from the peak in 2003, which was attributed<br />
to industry supply disruptions.<br />
INDUSTRY REFINING<br />
MARGINS<br />
Dollars per barrel<br />
20<br />
15<br />
10<br />
5<br />
CHEVRONTEXACO<br />
MARKETING FUEL MARGINS<br />
Dollars per barrel<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
99 01 02 03 04<br />
U.S. West Coast<br />
U.S. Gulf Coast<br />
Singapore<br />
Northwest Europe<br />
0<br />
01 99 02 03 04<br />
U.S. West<br />
United Kingdom<br />
Latin America<br />
Asia-Pacific/Middle East/Africa<br />
U.S. East<br />
42
Change language