2016 excited annual report
positioned for the future
As the average annual crude oil price hit a 10-year low, 2016 presented significant challenges for the oil and gas industry. In response, Chevron took action to improve our free cash flow with tighter spending and with additional revenue from expected production growth. We are committed to becoming cash balanced in 2017, and today we stand well positioned to meet that objective.
Chevron’s portfolio is built upon a strong and diverse set of assets around the globe. In the Upstream sector, our asset classes comprise conventional and unconventional crude oil and natural gas, heavy oil, liquefied natural gas (LNG), and deepwater assets. Our Upstream portfolio includes premier LNG assets in Australia; legacy crude oil assets in Kazakhstan; strong unconventional assets in the United States, Canada and Argentina; and excellent deepwater assets in Nigeria, Angola and the U.S. Gulf of Mexico. In addition, our world-class Downstream and Chemicals business is focused on growing higher-return segments, including petrochemicals, lubricants and additives.
Chevron’s employees take great pride in safely developing and delivering affordable, reliable energy that improves lives and powers the world forward while creating value for our stockholders, our business partners and the communities where we operate.
2016 year in review
In 2016 we advanced our major projects, grew our portfolio and focused on partnership in our communities.
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Responding to low commodity prices in 2016, we took significant actions to ensure our competitiveness in any operating environment.
finish projects under construction
We completed several capital projects, including Gorgon Trains 1–2, Chuandongbei Trains 1–3, Bangka and Alder, thereby reducing capital spending and bringing in new revenue for the company.
reduce capital spending
We reduced capital spending by 34 percent, to $22.4 billion – more than $4 billion under budget and $11 billion lower than 2015.
reduce operating expenses
Through aggressive cost management and simplification of processes, we reduced operating expenses nearly 10 percent, to the lowest level in six years.
operate safely and reliably
With the fewest spills, injuries and days away from work, we led the industry in these operational categories. Our most important Operational Excellence objective is the prevention of fatalities and high-consequence process safety events. Zero incidents or injuries is the only acceptable outcome.
complete asset sales
Select assets were divested, including Downstream sites in New Zealand and Hawaii. In sum, asset sales proceeds totaled $2.8 billion for the corporation.