"We are focused on execution as a top priority for 2008 and 2009," Dave O'Reilly, Chevron's chairman and CEO, said. "This entails excelling at operational performance, executing our capital projects well and effectively managing costs."

O'Reilly's presentation outlined the momentum Chevron has developed in key areas of its business plan:

--Significant upstream and downstream presence in the highest-growth regions of the world.
--Outstanding queue of upstream projects in all phases of engineering and construction.
--Successful exploration program that provides resources for oil and gas development projects.
--Improved refinery capabilities to process heavier, higher-sulfur crudes.

DOWNSTREAM - REFINING, MARKETING AND TRANSPORTATION

Mike Wirth, executive vice president for Global Downstream, said the company continues to focus on improving returns by enhancing refinery reliability, selectively building refining scale and flexibility, rationalizing its asset portfolio, and streamlining its marketing business.

Refinery reliability is a top priority for Downstream. Wirth highlighted successes at the Richmond, Calif., and Pembroke, Wales, refineries as evidence of the good progress being made across the system to increase utilization performance and production through operational excellence.

Key refinery growth projects were also completed in 2007:

--The company's joint-venture refinery in Yeosu, South Korea, completed a major upgrade that is expected to reduce crude oil costs by about $1 per barrel while increasing production of higher-value transportation fuels and lubricant base oils.
--The El Segundo, Calif., refinery completed an upgrade that is expected to reduce crude oil costs by $1 per barrel.

"We anticipate sanctioning four more projects this year, all with 2010 startups," Wirth said. "These include the crude flexibility project at Richmond, yield improvement projects at El Segundo and in South Korea, and the heavy-oil pre-commercial project at Pascagoula, Mississippi."

The Pascagoula project advances a breakthrough proprietary heavy-oil upgrading technology that could provide a competitive advantage in increasing supplies of clean-burning fuels to the marketplace from heavy-oil resources, Wirth explained.

Wirth also highlighted efforts to drive down costs and improve marketing returns. He cited several asset divestments executed in 2007 as well as plans to pursue additional opportunities this year to shrink the marketing footprint. Important marketing initiatives under way will reduce complexity and streamline operations while maintaining sales volumes near current levels, he said.