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2002 ChevronTexaco Corporate Responsibility Report Environmental IssuesFlaringBackground: Addressing an Operational ChallengeNatural gas often occupies underground reservoirs with oil and is producedalong with the oil. Such “associated gas” is separated from the oilafter it is brought to the surface. Where possible, ChevronTexaco andother energy companies reinject the gas back into the underground formation.Gas that is not reinjected often is used as an energy source forthe production facility. But in many cases, excess gas remains. When thisgas cannot be used or sold – due to lack of markets or infrastructuresuch as pipelines – it often is burned off at the production site, a practicecalled “routine flaring.” ChevronTexaco and other energy companieshave faced criticism for the use of flaring because it wastes a naturalresource, releases greenhouse gases and can negatively affect nearbycommunities.Approach: Developing New Markets and InfrastructureChevronTexaco is working to better manage routine flaring in its worldwideexploration and production operations. We are developing marketsfor our associated gas and investing in the needed gas processingand pipeline systems. The company also has undertaken projects toconvert natural gas to liquid fuels and to liquefied natural gas, whichcan then be transported to markets. We are participants in the WorldBank Global Gas Flaring Reduction Partnership, a public-private initiativeworking to reduce flaring and venting of associated gas worldwide.> In Kazakhstan, Tengizchevroil (TCO), a joint venture thatChevronTexaco operates, reduced flaring by approximately two-thirdsbetween 2000 and 2002. TCO invested more than US$140 million torepair and upgrade existing facilities and install new equipment. As aresult of the improvements, more than 120 million cubic feet of gasper day no longer is flared.> ChevronTexaco has committed to eliminate routine flaring fromits operations in Angola. In addition to working with the Angolangovernment to develop and operate new oil production withoutroutine flaring, we are pursuing other projects that will eliminateexisting routine flares from our older facilities. We expect theseprojects, including the Sanha Condensate Project and the TakulaGas Processing Platform Project, to eliminate the flaring of morethan 350 million cubic feet per day.Performance: Working to Reduce FlaringIn the United States, ChevronTexaco has virtually eliminated routineflaring, due to a combination of available gas markets, regulatoryrequirements and voluntary participation in initiatives like the U.S.EPA’s Star program. In the United States, flaring accounts for less than1percent of ChevronTexaco’s total upstream greenhouse gas emissionsof approximately 12 million metric tons.ChevronTexaco’s international upstream companies are engaged innumerous projects to reduce and, in some places, eliminate routineflaring of gas. For example:> In Nigeria, our business unit is developing several projects that willreduce flaring from our operations by several hundred million cubicfeet per day. To give a sense of scale, 100 million cubic feet of gas perday corresponds to approximately 13 percent of Nigeria’s total naturalgas consumption. These projects include the Escravos Gas-to-LiquidsPlant, expansion of our Escravos Gas Plant and the West Africa GasPipeline, which will carry gas that otherwise would have been flaredfrom Nigeria to users in Togo, Benin and Ghana.© 2003 ChevronTexaco Corporation. All Rights Reserved.43