Chevron and Other Shareholders Sanction Caspian Pipeline Expansion

Project doubles capacity of important export line

SAN RAMON, Calif., Dec 15, 2010 (BUSINESS WIRE) -- Chevron Corporation (NYSE:CVX) today announced that the shareholders and governing bodies of the Caspian Pipeline Consortium (CPC) have unanimously approved the $5.4 billion expansion of the Caspian pipeline. The capacity of the 900-mile (1500 km) pipeline, which carries crude oil from Western Kazakhstan to a dedicated terminal in the Black Sea, will increase to 1.4 million barrels per day from its current capacity of 730,000 barrels per day.

"This important achievement was made possible by the leadership and support of the governments of Russia and Kazakhstan," said Chevron Chairman and CEO John Watson. "Chevron appreciates the valuable contributions of our partners, Transneft and KazMunaiGaz, toward sanctioning of the CPC expansion project."

The expansion of the CPC pipeline is a critical step forward to enabling the Tengiz expansion, one of the world's largest oil fields with estimated recoverable reserves of 6 billion to 9 billion barrels. CPC will carry Tengiz crude oil and also transport oil from other Kazakh and Russian fields.

The project will be implemented in three phases with capacity increasing progressively from 2012 to 2015. The project will consist of the refurbishment of the existing five pump stations, the addition of 10 new pumping stations, the replacement of a 55-mile (88 km) section of the line, six new storage tanks and the addition of a third offshore mooring point at the Black Sea terminal, six miles (10 km) north of the Port of Novorossiysk.

The three largest CPC shareholders, Transneft, KazMunaiGaz (KMG) and Chevron, will provide project management services to the project. The project is in the final stages of construction contract negotiations with awards expected in the first quarter 2011.

Chevron is one of the world's leading integrated energy companies, with subsidiaries that conduct business worldwide. The company's success is driven by the ingenuity and commitment of its employees and their application of the most innovative technologies in the world. Chevron is involved in virtually every facet of the energy industry. The company explores for, produces and transports crude oil and natural gas; refines, markets and distributes transportation fuels and other energy products; manufactures and sells petrochemical products; generates power and produces geothermal energy; provides energy efficiency solutions; and develops the energy resources of the future, including bio-fuels. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com.

Equity interest in the Caspian Pipeline Consortium is allocated as follows:

• Russian Federation (24 percent) 1
• Republic of Kazakhstan (19 percent) 2
• Chevron Caspian Pipeline Consortium Company (15 percent)
• LUKARCO B.V. (12.5 percent)
• Rosneft-Shell Caspian Ventures Limited (7.5 percent)
• Mobil Caspian Pipeline Company (7.5 percent)
• Caspian Pipeline Company (7 percent) 1
• ENI International (N.A.) N.V. S.ar.l. (2 percent)
• BG Overseas Holdings Limited (2 percent)
• Kazakhstan Pipeline Ventures L.L.C. (1.75 percent) 2
• Oryx Caspian Pipeline L.L.C. (1.75 percent).

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1 Transneft represents the shares of the Russian Federation and the Caspian Pipeline Company
2 Kazmunaigas represents the shares of the Republic of Kazakhstan and Kazakhstan Pipeline Ventures

Chevron Corporation