2011



To Our Stockholders 

Chevron delivered outstanding financial and operating results in 2011. Even during turbulent economic times, we achieved record earnings, advanced our industry-leading queue of major capital projects to sustain long-term production growth and largely completed the global restructuring of our downstream business. And Chevron once again delivered superior returns for our stockholders. 

2011 was a record year for our financial performance. Net income was $26.9 billion on sales and other operating revenues of $244.4 billion, and we delivered a strongly competi- tive 21.6 percent return on capital employed. We raised our dividend twice in 2011, marking the 24th consecutive year of increases. 

We generated a total stockholder return of 20.3 percent, leading our peer group in 2011 and over the past five- and 10-year periods. 

Our financial performance reflected outstanding operating results. In the upstream, we ranked No. 1 in earnings per barrel relative to our peers. We began initial production of the Platong II natural gas project in Thailand. The Angola liquefied natural gas (LNG) project and Usan deepwater development offshore Nigeria are expected to begin production in 2012. Big Foot and Jack/St. Malo in the U.S. Gulf of Mexico are on schedule to come online in 2014. We also advanced our two world-class LNG projects in Western Australia. Gorgon achieved key construction milestones and is on track for a 2014 startup, and we broke ground on Wheatstone, with a planned startup in 2016. 

We expanded our strategic position in natural gas in North America and Europe. Notably in 2011, we closed our acquisition of Atlas Energy in the northeastern United States, drilled our first shale gas wells in Poland and Canada, and completed an agreement to assess shale opportunities in southern China. 

We continued to build on our explo- ration success in 2011. The success rate of our exploration wells was nearly 70 percent, exceeding our 10-year average, which is among the best in our peer group. We added crude oil and natural gas resources through discoveries in six countries and added 1.7 billion barrels of net oil-equivalent proved reserves, replacing 171 percent of production in 2011. 

In our global downstream and chemicals business, we ranked No. 1 in earnings per barrel in 2011, reflecting a strategic focus on reshaping our global portfolio to improve efficiency, enhance market focus and grow returns. We also ranked No. 1 in refinery utilization for the third straight biennial Solomon Associates refinery benchmark study. We advanced work on our Pascagoula Base Oil Plant that, when completed in 2013, will make us the world’s leading supplier of premium base oil. We also made progress on the expansion of our Oronite additives plant in Singapore. 

Underpinning our operations is a focus on developing new technologies that create business value and competitive advantage. We advanced a breakthrough dual-gradient drilling technology to improve access to deepwater assets and elevate deepwater drilling safety and environmental standards that is on track for initial deployment on the 

Big Foot project in 2012. In the