Chevron Announces $19.6 Billion Capital and Exploratory Budget for 2007

* Spending program focuses on the development of extensive queue of oil and gas projects
* Expenditures for 2007include $17.2 billion of cash and $2.4 billion for affiliates
* Company also announces a $5 billion extension of its common stock buyback program


SAN RAMON, Calif., Dec. 7, 2006 -- Chevron Corporation (NYSE: CVX) today announced a $19.6 billion capital and exploratory spending program for 2007, a 20 percent increase from expected outlays of approximately $16 billion in 2006.

“Our 2007 capital and exploratory program is a record level of investment by our company,” said Chairman and CEO Dave O’Reilly. “About 75 percent of next year’s budget is for oil and gas exploration and production projects worldwide,” O’Reilly added. “Another 20 percent is dedicated to the company’s global refining, marketing and transportation businesses which manufacture and sell gasoline, clean diesel fuel, biofuels and other refined products in the company’s marketing areas.” O’Reilly said the 2007 budget includes $6.7 billion of total investment in the United States.

The majority of the planned increase is related to the company’s exploration and production operations. The higher investment reflects the impact of several large, multiyear development projects being in their most capital-intensive phases and the effect of higher costs for materials and services currently experienced by the oil and gas industry worldwide. “Our long-range focus on capital discipline in executing our excellent project queue is critical in this environment,” O’Reilly said.

Highlights of the 2007 Capital and Exploratory Spending Program

Chevron 2007 Planned Capital & Exploratory Expenditures $ Billions
U.S. Upstream $ 4.0
International Upstream 10.6
U.S. Downstream 1.6
International Downstream 2.2
Chemicals and Other 1.2
TOTAL (Including Chevron’s Share of Expenditures by Affiliated Companies) $19.6
Expenditures by Affiliated Companies (2.4)
Cash Expenditures by Chevron Consolidated Companies $17.2

Upstream – Exploration and Production
Capital and exploratory spending of $14.6 billion is budgeted for exploration, production and natural gas-related projects. A significant component of this spending relates to upstream development projects that are building on the company’s successful and focused exploration results in recent years, including opportunities in the deepwater U.S. Gulf of Mexico and western Africa. Funding is also earmarked for further appraisal and evaluation of other prospective areas in the world’s major hydrocarbon basins.

“Our upstream investments are aimed at finding and developing oil and gas resources to increase production and help supply the energy needs of world markets,” said George Kirkland, Chevron’s executive vice president of Upstream and Gas. “Our focus is both on improving the performance of existing fields and funding new projects that will provide this future production growth.”

Major upstream spending in 2007 includes projects in the following areas:

U.S. Gulf of Mexico – deepwater exploration and development, including Tahiti, Great White Perdido, Blind Faith and Jack.
Angola – deepwater developments, including Tombua Landana, and construction of liquefied natural gas (LNG) facilities.
Republic of the Congo – development of the Moho-Bilondo Field.
Nigeria – continued development of the deepwater Agbami Field, and additional deepwater exploration.
Kazakhstan – expansion of the Tengiz Field.
Australia – further development of the Greater Gorgon Area natural gas resource offshore Western Australia.
Canada – expansion of the Athabasca Oil Sands Project.
Brazil – development of the Frade Field.

Downstream – Refining, Marketing and Transportation
Capital spending of $3.8 billion in 2007 is budgeted for downstream operations, of which $1.6 billion is for projects in the United States. These expenditures are aimed at allowing the company to produce cleaner and more sophisticated fuels, to increase production of transportation fuels globally, and to enhance the company’s ability to manufacture fuels and other products from heavy and/or sour crude oils.

Outlays in 2007 include projects to upgrade the company’s refineries in Mississippi and California. The company’s 50 percent-owned GS Caltex affiliate is also in the process of a major upgrade to its Yeosu refining complex in South Korea. And in support of upstream projects to help commercialize the company’s large natural gas resource base outside the United States, expenditures will be made in 2007 on the construction of LNG tankers and gas-to-liquids facilities.

Chemicals and Other
Expenditures of approximately $1.2 billion in 2007 are estimated for investments in chemicals, technology, and other corporate activities. Technology investments include projects related to molecular transformation, unconventional hydrocarbon technologies, reservoir management, and development of second-generation biofuel production technologies.

Common Stock Repurchase Program
The company also indicated board approval to acquire up to $5 billion of the company’s common stock over a period of up to three years. This program follows two other $5 billion stock buyback programs that were initiated in April 2004 and December 2005, with the most recent program having been completed in 12 months.

Chevron Corporation is one of the world’s leading energy companies. With more than 55,000 employees, Chevron subsidiaries conduct business in approximately 180 countries around the world, producing and transporting crude oil and natural gas, and refining, marketing and distributing fuels and other energy products. Chevron is based in San Ramon, Calif. More information on Chevron is available at www.chevron.com.

CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Some of the items discussed in this press release are forward-looking statements about Chevron’s 2006 capital and exploratory expenditure and common stock repurchase programs. Words such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “projects,” “believes,” “seeks,” “schedules,” “estimates” and similar expressions are intended to identify such forward-looking statements. The statements are based upon management’s current expectations, estimates, and projections; are not guarantees of future performance, and are subject to certain risks, uncertainties and other factors, some of which are beyond the company’s control and are difficult to predict. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are crude oil and natural gas prices; refining margins and marketing margins; chemicals prices and competitive conditions affecting supply and demand for aromatics, olefins and additives products; actions of competitors; the competitiveness of alternate energy sources or product substitutes; technological developments; the results of operations and financial condition of equity affiliates; inability or failure of the company’s joint-venture partners to fund their share of operations and development activities; potential failure to achieve expected net production from existing and future crude oil and natural gas development projects; potential delays in the development, construction or startup of planned projects; potential disruption or interruption of the company’s net production or manufacturing facilities due to war, accidents, political events, civil unrest or severe weather; potential liability for remedial actions under existing or future environmental regulations and litigation; significant investment or product changes under existing or future environmental statutes, regulations and litigation; potential liability resulting from pending or future litigation; the company’s acquisition or disposition of assets; government-mandated sales, divestitures, recapitalizations, changes in fiscal terms or restrictions on scope of company operations; the effects of changed accounting standards under generally accepted accounting principles promulgated by rule-setting bodies; and the factors set forth under the heading "Risk Factors’’ on pages 31 and 32 of the company’s 2005 Annual Report on Form 10-K. In addition, such statements could be affected by general domestic and international economic and political conditions. Acquisitions under the common stock repurchase program will be made from time to time at prevailing prices, as permitted by securities laws and other legal requirements and subject to market conditions and other factors. The program may be discontinued at any time. Unpredictable or unknown factors not discussed herein also could have material adverse effects on forward-looking statements. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

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