Corporate overview. Mike Wirth Chairman and Chief Executive Officer Chevron Corporation

Transcription

1 Corporate overview Mike Wirth Chairman and Chief Executive Officer

2 Operational excellence leadership Days away from work rate Loss of containment events Basis: 2014 = CVX ranking relative to competitors, 1 being the lowest rate Competitors: BP, RDS, XOM Tier 1 Tier 2 Industry leading safety and spill performance Reduced energy consumption while increasing production Oil spills to land or water Thousands of barrels CVX ranking relative to competitors, 1 being the lowest rate Competitors: BP, RDS, TOT, XOM Total energy consumption Operated assets (trillion BTUs) estimate 2

3 Macro landscape growing demand The world needs more energy to enable economic development Demand for our products is growing and will continue to do so Oil markets face a longer, flatter supply curve Global energy demand Million barrels of oil equivalent per day Crude oil and petroleum products Global crude oil supply & demand Million barrels per day IEA New Policies Scenario Natural gas Coal Capital assisted decline of existing production Other: nuclear, hydro, biomass, and renewables IEA New Policies Scenario demand Supply Supply gap of 42 MMBD Source: IEA, World Energy Outlook

4 Winning in any environment What we have What we will do What investors get Advantaged portfolio Sustainable at lower prices Grow production and cash margins Be returns-driven in capital allocation Lower our cost structure Superior total shareholder return Free cash flow growth Strong balance sheet Get more out of assets High-grade portfolio #1 priority: maintain and grow dividend 4

5 Profitable downstream & chemicals portfolio Focused portfolio Technology enabled formulations TCO Integrated value chains Advantaged feed, scale and technology Strong brands and leading market positions Complex refineries with scale Fuels value chains Petrochemicals Premium base oil Additives 5

6 Advantaged upstream portfolio Diverse Opportunities to high-grade TCO Sustainable and long-lived San Joaquin Valley Permian Deepwater Gulf of Mexico Lower risk Nigeria Gorgon Wheatstone Low cost Production operations Key assets High margin / oil-linked 6

7 Sustainable portfolio Reserves to production ratio Years 18 Resource to production ratio Years 15 Prudent and stable reserves to production Long-lived resource base Competitors: BP, RDS, TOT, XOM Competitors: BP, RDS, TOT, XOM Source: Wood Mackenzie; public information and Chevron estimates 7

8 Strong balance sheet Debt ratio Percent BP TOT RDS Other companies included: APC, COP, DVN, EOG, ENI, HES, MRO, OXY, STO, SU BBB A AA Credit rating XOM 8

9 Disciplined C&E program Total capital & exploratory $ billions capital & exploratory budget $ billions $ $18.8 $18.3 Cash C&E $12.8 $18 20 ~75% of spend delivers cash flow within 2 years budget guidance Downstream MCPs under construction Base FGP / WPMP Shale & tight Exploration / other 9

10 Cost reductions continue Production costs $/BOE 18 Corporate cost reduction from 2014 Percent Cost reductions continue 12 Technology enables increased efficiencies Competitors: BP, RDS, TOT, XOM

11 Upstream cash margin grows Projected operating cash margin $/BOE Liquid % of total production Percent 28 $70/bbl Increase high margin, oil-linked volume ~75% CVX oil-linked production $60/bbl $60/bbl $60/bbl Divest lower margin barrels Improve cost structure CVX Source: Wood Mackenzie and CVX internal estimates Competitors: BP, RDS, TOT, XOM 11

12 Production growth at low C&E Projected net production at $60/bbl MMBOED Base plus shale & tight 5% growth 4-7% growth 2 3% CAGR through 2022 with ~$9 B capital spend/yr Uncertainties Price effects Status of PZ Ramp-up pace of MCPs Asset sales 12

13 Asset Maturity Continuous portfolio review Upstream assets San Joaquin Valley Investments High margin, high return Scale, efficiency Nigeria Kazakhstan Divestments Non-strategic fit Can t compete for capital Receive good value Permian Immature Mature Deepwater Gulf of Mexico Non-core Core Australia asset sale proceeds target ~$5 B Source: Wood Mackenzie 13

14 Improving cash returns CFFO ROCE at $60/bbl Free cash flow growth CAGR % Percent Margin & volume Cost & other Portfolio enhancement Price upside Expanding cash margins Lower cost structure $60/bbl $60/bbl Portfolio optimization CFFO CFFO ROCE ROCE CFFO CFFO ROCE ROCE 0 Chevron Competitors: BP, RDS, TOT, XOM Source: Third-party analyst reports 14

15 2018 cash generation 2018 cash flow $ billions Cash generation of ~$14B Dividend Dividend 2018 cash flow $50/bbl without asset sales CF after capex excl. asset $54/bbl CF sensitivity from $54 to $60/bbl 2018 operating $60/bbl 2018 asset sales 2018 CF after capex and incl. asset $60/bbl See Appendix: reconciliation of non-gaap measures and slide notes for definitions, source information, calculations, and other. 15

16 Shareholder distributions Indexed dividend growth Basis 2007 = ~7 % CVX compound annual growth rate Chevron S&P 500 Competitor average: BP, RDS, TOT, XOM Percent change in shares outstanding Chevron Competitors: BP, RDS excl. shares issued for the BG acquisition, TOT, XOM A leader in dividend growth ~9% reduction in shares outstanding since

17 Consistent financial priorities guidance Maintain and grow dividend Competitive dividend growth Fund capital program Annual C&E range $18 20B Strong balance sheet Debt ratio ~20% Return surplus cash Resume buy back 17