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Refining
Refining has a network of 21 refineries and asphalt plants that can process more than 2 million barrels of crude oil
per day (ChevronTexaco share). Approximately 45 percent of ChevronTexaco’s equity refining capacity supplies U.S.
markets and 30 percent supplies markets in the Asia-Pacific region, where margins have demonstrated consistent
growth since 2002.
The refining asset portfolio is well positioned to capitalize on market opportunities. For example, the Pembroke
Refinery, located in the United Kingdom, serves the European market, but it also adds flexibility to the company’s
refining system by being one of the few sources outside the United States that has demonstrated the ability to ship
motor gasoline blendstocks that meet U.S. West Coast specifications.
More than half of Refining’s throughput capacity is in the company’s five largest refineries: Richmond and
El Segundo, California; Pascagoula, Mississippi; Pembroke, United Kingdom, and the equity affiliate in Yosu,
South Korea. Several of these refineries can run significant volumes of lower-quality crude and produce a variety of
specialized high-value products, which allowed ChevronTexaco to take advantage of widening light-heavy price
differentials for crude oil in 2004.
BUSINESS STRATEGIES
Refining’s key strategies include:
> Achieving world-class performance in safety and reliability.
> Lowering unit operating costs through standardization of process improvements.
> Increasing refinery utilization by leveraging technology and best practices.
REDUCING COSTS THROUGH IMPLEMENTATION OF STANDARDIZED PROCESSES
Refining is striving to become a top-tier performer in operating expense by driving standardized processes and
improving efficiencies throughout the refining system.
For example, during 2004, Refining implemented a standardized performance improvement process at all wholly
owned and operated refineries. This initiative, which began in the Richmond, California, refinery in 2003, has already
surpassed original expectations in identifying and capturing cost reduction and revenue improvement opportunities
across the system. All eight owned-and-operated refineries completed the diagnostic portion of this process. Many individual
projects to lower costs, improve yields, enhance utilization and increase operating efficiency were successfully
completed, with more such projects under way. This work was also initiated at both Australian affiliate-owned refineries.
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