2021 annual report
acceleratingprogress asset
class: shale
and tight
794
MBOED
produced in 2021 from our
shale and tight assets
$4.5
billion
of our 2022 capital budget is
focused on shale and tight resources
2.6
million
net acres of shale and tight resources
for exploration and production
Photo: The development of oil and gas resources
located in shale and tight formations is a key focus
area for Chevron. Our shale and tight assets include
developments in Colorado, New Mexico and Texas
in the United States along with Argentina and
Canada. We’re taking an asset class approach to
improve our performance. This unified approach
allows us to standardize, develop technology and
scale solutions faster across the assets.
our strategy
leveraging our strengths to deliver
lower carbon energy to a growing world
Our capabilities, assets and customers are distinct advantages. We are building on these strengths
as we aim to lead in lower carbon intensity oil, products and natural gas and advance new products
and solutions that reduce the carbon emissions of major industries.
We’re driving energy progress essential to a growing, dynamic world.
Chevron Corporation 2021 Annual Report
I
table of
contents
accelerating progress
to our stockholders
higher returns, lower carbon
our beliefs
lead director: one-on-one
board of directors
corporate officers
chevron at a glance
chevron stock performance
financial and operating highlights
maintaining process safety
financials
glossary of energy and financial terms
stockholder and investor information
III
IV
X
XII
XIV
XVI
XVIII
XX
XXII
XXIV
XXVI
31
110
112
A digital version of this report is available at
www.chevron.com/annual-report
accelerating
progress
“Accelerating” characterizes the experience
of the past year and the call to action shaping
the years ahead. As the world emerges from
the pandemic, our actions must respond to
both the world’s growing energy needs and its
expectations for a lower carbon future.
This dual challenge – meeting growing energy
demand while reducing greenhouse gas
emissions – is profound and complex. We intend
to accelerate our progress to meet them both.
“Progress” means doing even more to deliver
affordable, reliable and ever-cleaner energy –
essential to modern life for billions of people
around the world. It means becoming more
efficient, returning greater value to our
stockholders and growing the capabilities
of our people. It means investing and
innovating – delivering on the expectations
of stakeholders today, while working to
transform the energy system of tomorrow.
Progress toward the ambitions of the
Paris Agreement will require many different
solutions, many different technologies and
many different actions. In other words,
problem-solving on a global scale. At Chevron,
problem-solving defines what we do – and
who we are.
We approach the future as optimists,
innovators and engineers:
• Adapting to ever-changing markets;
• Leveraging our unique capabilities, assets
and customer relationships; and
• Capturing strategic advantage where we can
deliver the greatest impact.
Our confidence stems from our core strengths:
an advantaged portfolio, improved cost and
capital efficiency, strong cash flow and an
industry-leading balance sheet. We believe the
same strengths that set us apart through market
turmoil prime our company for further success.
At the same time, we are reducing greenhouse
gas emissions intensity in our oil, products and
natural gas businesses and developing lower
carbon solutions that we expect to become
a bigger part of the energy system in the
decades ahead.
We believe this is an exciting time to be in
the business of energy. We proudly embrace
our role and the challenge of meeting the
world’s growing energy demand in a lower
carbon future.
Chevron Corporation 2021 Annual Report
III
to our
stockholders
The critical role energy plays in the global
economy was evident in 2021, as world events
demonstrated that affordable, reliable and
ever-cleaner energy remains vital to progress,
prosperity and security. I’m proud of how our
people, under challenging circumstances, met
the needs of customers and markets around
the world.
In addition to meeting the needs of customers,
companies must also reward shareholders.
Chevron delivered a strong financial
performance, achieving best-ever free cash
flow and growing shareholder returns once
again. We are an even stronger company today
than we were just a few years ago.
Our strategy is clear: Leverage our strengths
to deliver lower carbon energy to a growing
world. Our capabilities, assets and customers
are distinct advantages. We’re building on
these strengths as we aim to lead in lower
carbon intensity oil, products and natural gas
and to advance new products and solutions
that reduce the carbon emissions of major
industries – driving energy progress essential
to a dynamic world.
a winning combination
Our focus on “higher returns, lower carbon”
reflects a firm belief in business resilience –
underpinned by operational excellence, cost
discipline and capital discipline – and financial
strength. Both are essential to any organization
aiming to advance meaningful, durable
progress in the modern energy economy.
We’re executing a strategy built on strength
– and one which positions us differently
from others. In 2021, we completed the
transformation of our organization and the
integration of Noble Energy and delivered on
our financial priorities:
• Increased quarterly dividend payout by 4%
• Invested in oil, products, gas and new energy
opportunities with discipline
• Strengthened our balance sheet
• Reinstated share repurchases
We demonstrated the ability to sustain and
grow our business with less capital, generating
higher returns and record free cash flow,
positioning us to better reward stockholders.
Chevron Corporation 2021 Annual Report
IV
taking on tomorrow, today
Future progress will require applying
our world-class capabilities as we aim
to deliver higher returns in a lower
carbon world. Some look to the energy
transition and describe solutions in
the distant future. We’re focused on
making progress today. This means
setting ambitious targets for emissions
intensity reductions, developing
new technologies and working with
customers to develop solutions that
help them lower their emissions.
Having achieved our 2023 carbon
intensity reduction goals, we set new
targets last year. We’re executing
projects to make progress toward our
2050 net zero aspiration for upstream
Scope 1 and Scope 2 emissions. As
part of these efforts, we’re improving
methane detection, rethinking facility
designs, optimizing equipment and
utilizing more renewable power.
“we are an even stronger
company today than we were
just a few years ago”
– mike wirth
Security and reliability of energy supply
emerged as a major theme for energy markets
in 2021 in places like California, Texas and
Europe. Meanwhile, governments representing
approximately 92% of global greenhouse gas
emissions in 2021 have announced net zero
goals or ambitions.
Reaching the ambitions of the Paris Agreement
will require innovation, breakthroughs in
technology, more ambitious government
policy and the ability to attract and forge new
partnerships. No one country, no one industry,
no one company acting alone can meet the
world’s energy and climate goals. That’s why we
intend to be the partner of choice for those with
complementary strengths.
In our Downstream business, we have the
capabilities, assets and supply chains needed
to produce and distribute alternative fuels –
renewable diesel, sustainable aviation fuel,
renewable natural gas and hydrogen. These
offer the potential for scalable, lower carbon
options for critical segments of the economy
that are difficult to decarbonize. Sustainable
aviation fuel, for example, can lower emissions
by up to 80% on a lifecycle basis compared
to traditional jet fuel. It is compatible with
modern aircraft engines and airport fueling
infrastructure. We’ve produced an initial batch
at our El Segundo Refinery that we estimate to
lower emissions by 59% on a lifecycle basis.
In 2021, we announced the formation of
Chevron New Energies, a new organization
dedicated to growing lower carbon businesses
in hydrogen; carbon capture, utilization
and storage; offsets; and other emerging
energies. We’re seeking to accelerate these
lower carbon solutions for our customers, such
as those in the aviation, marine, heavy-duty
transportation and industrial sectors, so they
can achieve their emission reduction goals.
In total, Chevron is planning $10 billion in
lower carbon capital investment between
2021 and 2028 with the goal of reducing the
carbon intensity of our oil, products and gas
business and building new lower carbon
energy businesses.
Chevron Corporation 2021 Annual Report
VI
strengthening the business
Global oil demand rose by 5.5 million barrels
per day in 2021 and is expected to return to
pre-pandemic levels in 2022. The emergence
of new COVID-19 variants in 2021 slowed this
recovery in demand, with air travel and jet fuel
most affected. Global natural gas demand rose
4.1% in 2021, erasing the losses from 2020.
In Upstream, we produced 3.1 million oil-
equivalent barrels per day in 2021, a record high
and a slight increase from 2020. We added
1.3 billion barrels of net oil-equivalent proved
reserves, which equates to approximately 112%
of net oil-equivalent production for the year.
The largest net additions were from assets
in the Permian Basin, the Gulf of Mexico and
Australia. The largest net reductions were from
assets in Kazakhstan, primarily due to higher
prices and their negative effect on reserves.
In Kazakhstan, the Future Growth Project
and Wellhead Pressure Management Project
is 89% complete. In Australia, we sanctioned
the Jansz-Io Compression project, which is
expected to support an important source of
natural gas to customers in countries across
the Asia-Pacific region. We advanced the
Anchor project in the U.S. Gulf of Mexico. In
addition, we completed the sales of several
conventional Permian Basin properties in the
second half of 2021.
In Downstream & Chemicals, GS Caltex, a 50%
owned affiliate, started up an olefins mixed-
feed cracker and associated polyethylene unit
at its refinery in Yeosu, South Korea, ahead of
schedule and under budget.
We announced an agreement with Neste Oyj
to acquire its Group III base oil business and
brand and completed the acquisition of an
equity interest in American Natural Gas (now
Beyond6) and its network of 60 compressed
natural gas stations. Our 2022 capital
budget excludes expected inorganic capital
of $600 million expected for the formation
of a renewable fuel feedstocks joint venture
with Bunge.
We completed the acquisition of the publicly
held units of Noble Midstream Partners not
already owned by Chevron or our affiliates.
Chevron Corporation 2021 Annual Report
VII
“optimism is the fuel
that accelerates progress”
– mike wirth
We signed a letter of intent with Gevo to jointly
produce sustainable aviation fuel (SAF). We
tested a batch of SAF with Delta Air Lines and
Google and tracked emissions data using cloud-
based technology. Chevron and Delta will share
results from the SAF pilot with Google to better
understand emissions reporting.
We reached separate agreements to collaborate
with Caterpillar, Cummins and Toyota to
advance our goal of building a commercially
viable, large-scale hydrogen business.
With Enterprise Products Partners, we
announced a framework to evaluate
opportunities for carbon capture, utilization
and storage (CCUS) from our respective
business operations in the U.S. Midcontinent
and Gulf Coast.
And we invested in developing new
technologies for geothermal power, floating
offshore wind turbines and green ammonia.
looking ahead
At Chevron, we look to the future with optimism.
We go forward with confidence in the power
of human creativity, ingenuity and imagination.
We embrace engineering and innovation as a
means to develop new solutions, knowing that
the prospects for the human condition have
never been brighter.
We believe that optimism is the fuel that
accelerates progress. It’s the spark of innovation,
risk-taking and discovery. If we can harness
this powerful force, our human energy, we can
overcome the biggest obstacles, solve the most
difficult problems and achieve our goals.
Thank you for your support and the trust you
place in us.
Sincerely,
Michael K. Wirth
Chairman of the Board
and Chief Executive Officer
Chevron Corporation 2021 Annual Report
VIII
Photo: A key supplier of gasoline to the Los Angeles area, our
El Segundo Refinery has 73,800 barrels per day of fluid catalytic
cracking infrastructure that can reliably process bio-feedstocks
and other co-feeds delivered by rail.
Chevron Corporation 2021 Annual Report
IX
higher returns,
lower carbon
We are focused on delivering higher returns, lower carbon and superior
shareholder value in any business environment.
Photo: The Angola Liquefied Natural Gas (ALNG) Project commercializes associated natural gas produced
by Chevron and other crude oil operators. The plant helps Chevron meet the global demand for natural gas.
Chevron Corporation 2021 Annual Report
X
growing
the dividend
strengthening the
balance sheet
Increased quarterly dividend
per share 4% in 2021
Lowered net debt ratio from
22.7% to 15.6% in 2021
reinvesting to grow
future cash flows
returning excess cash
to stockholders
Invested in oil and gas and new
energy opportunities with discipline
Repurchased $1.4 billion in shares
lowering
carbon intensity,
cost-efficiently
Prioritizing projects expected to
return the largest reduction in
carbon emissions at the lowest cost,
and holding ourselves accountable
with transparent targets
growing
lower carbon
businesses
Seeking to grow lower carbon
businesses in renewable fuels and
products; hydrogen; carbon capture,
utilization and storage; offsets; and
emerging lower carbon opportunities
our beliefs
We strive to achieve results the right way. Our actions and investments are guided by a set of beliefs
that shape our culture and underpin our commitment to deliver for our stockholders, partners and
all our stakeholders.
energy is essential
to modern life
We work to provide the energy that
enables human progress around the
world. We live this purpose every day.
human ingenuity
fuels innovation
The imagination and perseverance of people will
deliver solutions to energy’s greatest challenges.
the future
is lower carbon
Our actions can help make energy and global
supply chains more sustainable, helping
industries and customers who use our
products advance a lower carbon world.
leadership carries
great responsibility
Meeting rising expectations demands
performance and accountability at the highest
level. We aim to deliver industry-leading results.
Chevron Corporation 2021 Annual Report
XII
Photo: In Kazakhstan, Chevron holds a 50% interest in Tengizchevroil (TCO), where we are advancing the
Future Growth Project and Wellhead Pressure Management Project, designed to further increase total daily
production from the Tengiz reservoir and maximize the ultimate recovery of resources. A third-generation
expansion in a 20-year process, the project was approximately 89% complete by year-end 2021.
Chevron Corporation 2021 Annual Report
XIII
lead director:
one-on-one
Lead Independent Director Ronald D. Sugar describes how Chevron’s Board of Directors sees
the link between financial results and Chevron’s approach to the energy transition:
Last year in the annual report, I closed my comments with our Board’s mandate to review, test,
debate and, where necessary, work with management to adjust the company’s business strategy.
Our goal is to most effectively deploy Chevron’s capital and talent to meet rising expectations in
a world where financial results and environmental performance – including emission reductions –
are inextricably linked.
We regularly meet with investors and other stakeholders to discuss concerns about climate
change, to describe our approach to the energy transition and to engage in ongoing dialogue
on these critical issues.
tell us about the strategy behind
meeting rising expectations?
The Board has been heavily engaged in support of
Chevron’s energy transition strategy. The purpose of
the company has been clearly articulated: to provide
the affordable, reliable, ever-cleaner energy that
enables human progress. And our objective is simply
stated – higher returns, lower carbon. Our aim is to lead
in lower carbon intensity oil, products and natural gas
and to advance new products and solutions that reduce
the carbon emissions of major industries. Our strategy
leverages the company’s strengths – Chevron’s
capabilities, assets and customers – and builds on
those strengths to deliver lower carbon energy.
what lower carbon aspirations
did the board adopt last year?
The Board endorsed the adoption of a 2050 Upstream
Scope 1 and Scope 2 net zero aspiration. The Board
also endorsed new Upstream carbon intensity targets
for 2028, having exceeded our 2023 Upstream carbon
intensity targets. The company incorporated Scope 3
emissions into greenhouse gas (GHG) intensity targets by
establishing a Portfolio Carbon Intensity target. Adopting
this methodology provides Chevron the flexibility to grow
our Upstream and Downstream businesses provided
we remain an increasingly carbon-efficient operator.
More information is available in the company’s updated
Climate Change Resilience report, which is aligned with
the Task Force on Climate-Related Disclosures.
Accomplishing our Upstream net zero aspiration
depends on both internal and external factors,
including continuing progress on commercially viable
technology; government policy; successful negotiations
for carbon capture, utilization and storage (CCUS) and
nature-based projects; availability of cost-effective,
verifiable offsets in the global market; and granting of
necessary permits by governing authorities.
as the world looks to a lower carbon
future, how is chevron positioned?
First, our new organization – last year the Board
endorsed the formation of Chevron New Energies,
an organization focused on areas where we believe
the company can build competitive advantages and
that target sectors of the economy that cannot be
easily decarbonized, such as heavy transportation,
aviation and power generation. The company has
strong relationships with key customers and partners,
which we expect to be critical in developing economic
projects that can scale.
Renewable fuels, hydrogen, CCUS and offsets are at
the core of this strategy and are an important part
of addressing climate change. These businesses
support Chevron’s efforts to reduce its GHG emissions
intensity, and we believe they could become high-
growth opportunities with the potential to generate
accretive returns.
And our business model can evolve to accommodate
more rapid growth of Chevron New Energies if the
policies, such as economy-wide carbon prices, enable
lower carbon solutions to scale faster.
what climate policies does chevron support?
Public policy is one of the Board’s key focus areas.
Chevron supports well-designed policies that
achieve emissions reductions as efficiently and
effectively as possible. Crafting these policies will
require engagement on a transparent and economy-
wide carbon market; on support for precommercial
technologies designed to spur innovation across all
sectors; and on cost-effective reductions that allocate
costs equitably, gradually and predictably.
Chevron supports carbon pricing. Policy makers
must balance economic, environmental and energy
needs. Policy benefits, costs and trade-offs should be
transparently communicated.
As a global company, Chevron operates in many
jurisdictions that have enacted lower carbon policies.
Under current and potential future market conditions,
the Board seeks to understand the impacts of
climate-related actions and strategies and to advance
opportunities to increase returns to investors in our oil,
products, gas and new energies businesses.
how is the board adapting with the
fast pace of change around the world?
The world is rapidly evolving, and so are we. From the
recent transformation of our organizational structure,
to the acquisition of Noble Energy, to the creation of
Chevron New Energies and the continued advancement
of our people and leadership, we are proud of the pace
at which Chevron continues to respond to change and
opportunity. Our Board of Directors has also changed,
adding five new directors in the past five years who
bring new insights and perspectives to challenge our
thinking and shape our point of view.
Chevron Corporation 2021 Annual Report
XV
board
of directors
Michael K. (Mike) Wirth, 61
Chairman of the Board and Chief Executive Officer since February 2018. Prior to his current role,
Wirth served as Vice Chairman of the Board in 2017 and Executive Vice President of Midstream &
Development from 2016 to 2018. In that role, he was responsible for supply and trading, shipping,
pipeline and power operating units; corporate strategy; business development; and corporate affairs.
Wirth was Executive Vice President of Downstream & Chemicals from 2006 to 2015. Previously, he
served as President of Global Supply and Trading from 2003 to 2006.
Wirth serves on the board of directors of Catalyst, is Chairman of the American Petroleum Institute
and is a member of the National Petroleum Council, the Business Roundtable, the World Economic
Forum International Business Council and the American Society of Corporate Executives. Wirth
joined Chevron in 1982 as a design engineer. He earned a bachelor’s degree in chemical engineering
from the University of Colorado.
Alice P. Gast, 63
Director since 2012. She is President of Imperial
College London, a public research university
specializing in science, engineering, medicine
and business. Previously, she was President of
Lehigh University in Pennsylvania. Prior to that,
she was Vice President for Research, Associate
Provost and Robert T. Haslam Chair in Chemical
Engineering at the Massachusetts Institute of
Technology. (2,4)
Enrique Hernandez, Jr., 66
Director since 2008. He is Executive Chairman of
Inter-Con Security Systems Inc., a global provider
of security and facility support services to
governments, utilities and industrial customers.
He is Chairman of the Board of McDonald’s
Corporation. (3,4)
Wanda M. Austin, 67
Director since 2016. She holds an adjunct
Research Professor appointment at the
University of Southern California’s Viterbi
School’s Department of Industrial and Systems
Engineering. She is a retired President and Chief
Executive Officer of The Aerospace Corporation,
a leading architect for the United States’ national
security space programs. She is a Director of
Amgen Inc. and Virgin Galactic Holdings, Inc. (2,3)
John B. Frank, 65
Director since 2017. He is Vice Chairman of
Oaktree Capital Group LLC, a global investment
management company with expertise in
credit strategies. He is one of four members
of Oaktree’s Executive Committee and was
previously the firm’s Principal Executive Officer.
He is a Director of Daily Journal Corporation and
Oaktree Capital Group LLC and its subsidiaries:
Oaktree Acquisition Corporation II, Oaktree
Acquisition Corporation III and Oaktree Specialty
Lending Corporation. (1)
Chevron Corporation 2021 Annual Report
XVI
The Board of Directors of Chevron directs the affairs of the corporation and is committed to sound
principles of corporate governance. The Directors bring a proven track record of success across a
broad range of experiences at the policymaking level.
Marillyn A. Hewson, 68
Director since 2021. She has been Strategic
Advisor to the Chief Executive Officer of
Lockheed Martin Corporation, a security
and aerospace company, since March 2021.
Previously, she was Executive Chairman,
Chairman, President and Chief Executive Officer
of Lockheed Martin Corporation. She is a Director
of Johnson & Johnson. (1)
Jon M. Huntsman Jr., 62
Director since 2020 and from 2014 to
2017 when he resigned to serve as the U.S.
Ambassador to Russia. He is Vice Chair of Policy
at Ford Motor Company. Previously, he served as
U.S. Ambassador to China and was Governor of
Utah for two consecutive terms. He is a Director
of Ford Motor Company. (3,4)
Charles W. Moorman, 70
Director since 2012. He is a retired Chairman of
the Board, Chief Executive Officer and President
of Norfolk Southern Corporation, a freight and
transportation company. He is a Senior Advisor
to Amtrak, a passenger rail service provider,
having previously served as Amtrak’s President
and Chief Executive Officer. He is a Director of
Oracle Corporation. (2,3)
Dambisa F. Moyo, 53
Director since 2016. She is Co-Principal of
Versaca Investments, a family office focused
on growth investing globally. Previously, she
served as Chief Executive Officer of Mildstorm
LLC, focusing on the global economy and
international affairs. Prior to that, she worked at
Goldman Sachs in various roles and at the World
Bank in Washington, D.C. She is the author of
four New York Times bestsellers and is a Director
of 3M Company. (1)
Debra Reed-Klages, 65
Director since 2018. She is a retired Chairman,
Chief Executive Officer and President of Sempra
Energy, an energy services holding company.
Previously, she was Executive Vice President
of Sempra Energy and President and Chief
Executive Officer of San Diego Gas & Electric
and Southern California Gas Co. She is a
Director of Caterpillar Inc. and Lockheed Martin
Corporation. (1)
Ronald D. Sugar, 73
Lead Director since 2015 and a Director since
2005. He is a retired Chairman and Chief
Executive Officer of Northrop Grumman
Corporation, an aerospace and defense company.
He is a Senior Advisor to Ares Management LLC;
Bain & Company; Temasek Americas Advisory
Panel, Singapore; G100 Network; and World 50.
He is a Director of Amgen Inc., Apple Inc. and
Uber Technologies, Inc. (2,3)
D. James Umpleby III, 64
Director since 2018. He is Chairman and Chief
Executive Officer of Caterpillar Inc., a leading
manufacturer of construction and mining
equipment, diesel and natural gas engines,
industrial gas turbines and diesel-electric
locomotives. Previously, he was Group President
of Caterpillar’s Energy and Transportation
business segment. (2,4)
Committees of the Board
1 Audit: Debra Reed-Klages, Chair
2 Board Nominating and Governance: Wanda M. Austin, Chair
3 Management Compensation: Charles W. Moorman, Chair
4 Public Policy and Sustainability: Enrique Hernandez, Jr., Chair
Chevron Corporation 2021 Annual Report
XVII
corporate
officers
Paul R. Antebi, 50
Vice President and General Tax Counsel since
2021. Responsible for directing Chevron’s
worldwide tax activities. Previously, the
company’s Deputy General Tax Counsel. Joined
the company in 1998.
Marissa Badenhorst, 46
Vice President, Health, Safety and Environment
(HSE) since 2022. Responsible for HSE strategic
planning and issues management, compliance
assurance and emergency response. Previously,
General Manager of Enterprise Process Safety.
Prior to that, Technical Manager, Chevron
Australia. Joined the company in 2000.
Eimear P. Bonner, 48
Vice President, President Chevron Technical
Center and Chief Technology Officer since 2021.
Responsible for leading the Chevron Technical
Center, which provides technical expertise to
support Chevron’s global operations, develops
solutions to transform Chevron’s digital future,
and deploys innovative breakthrough
technology to support the future of energy.
Joined the company in 1998.
Pierre R. Breber, 57
Vice President and Chief Financial Officer since
2019. Responsible for controller, tax, treasury,
audit and investor relations activities worldwide.
Previously, Executive Vice President of
Downstream & Chemicals. Joined the company in
1989.
Mary A. Francis, 57
Corporate Secretary and Chief Governance
Officer since 2015. Responsible for providing
advice and counsel to the Board of Directors and
senior management on corporate governance
matters, managing the company’s corporate
governance function, and serving on the Law
Function Executive Committee. Previously, Chief
Corporate Counsel. Joined the company in 2002.
Jeff B. Gustavson, 49
Vice President, Lower Carbon Energies since
2021. Responsible for accelerating Chevron’s
lower carbon businesses in hydrogen, carbon
capture, offsets and emerging energies.
Previously, Vice President, Mid-Continent
Business Unit; and President, Chevron Canada
Limited. Joined the company in 1999.
David A. Inchausti, 58
Vice President and Controller since 2019.
Responsible for corporatewide accounting,
financial reporting and analysis, internal controls,
accounting policy, and digital finance. Previously,
Deputy Comptroller and Upstream Comptroller.
Prior to that, 20 years abroad in multiple
business units. Joined the company in 1988.
James W. Johnson, 63
Executive Vice President, Upstream since 2015.
Responsible for Chevron’s global exploration
and production activities for crude oil and
natural gas. Previously, President, Chevron
Europe, Eurasia and Middle East Exploration
and Production Company; Managing Director,
Eurasia Business Unit; and Managing Director,
Australasia Business Unit. Joined the company
in 1981.
Chevron Corporation 2021 Annual Report
XVIII
Navin K. Mahajan, 55
Vice President and Treasurer since 2019.
Responsible for Chevron’s banking, financing,
cash management, insurance, pension
investments, and credits and receivables
activities. Previously, Vice President of Finance
for Downstream & Chemicals, Assistant Treasurer
of Operating Company Financing, and Chief
Compliance Officer. Joined the company in 1996.
Rhonda J. Morris, 56
Vice President since 2016 and Chief Human
Resources Officer since 2019. Responsible
for human resources, diversity and inclusion,
ombuds, and employee assistance/work life
services. Previously, Vice President, Human
Resources, Downstream & Chemicals. Joined the
company in 1991.
Mark A. Nelson, 58
Executive Vice President, Downstream &
Chemicals since 2019. Responsible for directing
the company’s worldwide manufacturing,
marketing, lubricants, chemicals and Oronite
additives businesses. Also oversees Chevron’s
joint venture Chevron Phillips Chemical
Company. Previously, Vice President, Midstream,
Strategy & Policy. Joined the company in 1985.
Bruce L. Niemeyer, 60
Vice President, Strategy & Sustainability since
2018. Responsible for guiding development of
the company’s key strategies, including capital
allocation and sustainability efforts. Previously,
Vice President, Mid-Continent Business Unit; Vice
President of the Appalachian/Michigan Business
Unit; and General Manager of Strategy and
Planning for Chevron North America Exploration &
Production. Joined the company in 2000.
Colin E. Parfitt, 58
Vice President, Midstream since 2019.
Responsible for Chevron’s Midstream business,
including supply and trading activities, shipping,
pipeline and power, and energy management.
Appointed Chairman of the Board, Noble
Midstream Partners GP LLC, in October 2020.
Previously, President, Supply and Trading. Joined
the company in 1995.
R. Hewitt Pate, 59
Vice President and General Counsel since
2009. Responsible for directing the company’s
worldwide legal affairs. Previously, Chair,
Competition Practice, Hunton & Williams LLP,
Washington, D.C., and Assistant Attorney
General, Antitrust Division, U.S. Department of
Justice. Joined the company in 2009.
Jay R. Pryor, 64
Vice President, Business Development since
2006. Responsible for identifying and developing
new, large-scale upstream and downstream
business opportunities, including mergers and
acquisitions. Previously, Managing Director,
Chevron Nigeria Ltd., and Managing Director,
Asia South Business Unit and Chevron Offshore
(Thailand) Ltd. Joined the company in 1979.
Albert J. Williams, 53
Vice President, Corporate Affairs since 2021.
Responsible for overseeing government
affairs, public affairs, social investment and
performance, and the company’s worldwide
efforts to protect and enhance its reputation.
Previously, Managing Director of Chevron
Australia and head of the Australasia Business
Unit. Joined the company in 1991.
Retiring Officers
Joseph C. Geagea, retiring effective June 2022; Executive Vice
President and Senior Advisor to the Chairman and CEO since 2021;
joined the company in 1982.
Executive Committee
Michael K. Wirth, Eimear P. Bonner, Pierre R. Breber, Joseph C.
Geagea, James W. Johnson, Rhonda J. Morris, Mark A. Nelson,
Colin E. Parfitt, and R. Hewitt Pate.
J. David Payne, retiring effective April 2022; Vice President, Health,
Safety and Environment since 2018; joined the company in 1981.
Chevron Corporation 2021 Annual Report
XIX
chevron
at a glance
Chevron is one of the world’s leading integrated
energy companies. We believe affordable, reliable and
ever-cleaner energy is essential to enabling human
progress. Chevron produces crude oil and natural
gas; manufactures transportation fuels, lubricants,
petrochemicals and additives; and develops technologies
that enhance our business and the industry. We are
focused on lowering the carbon intensity in our operations
and seeking to grow lower carbon businesses along with
our oil, products and natural gas business lines.
Our success is driven by a dedicated, diverse and highly
skilled global workforce united by The Chevron Way, our
enduring statement of culture, and our focus on delivering
industry-leading results and superior stockholder value.
We aim to lead our industry in health, safety and
environmental performance. The protection of people, assets,
communities and the environment is our highest priority.
Photo: One of the largest lubricant additives plants in the world, Chevron Oronite’s
Belle Chase, Louisiana, Oak Point Plant is our anchor in the Americas Region and
operates as part of the company’s interconnected global supply chain network.
3.10
million barrels
net oil-equivalent daily production1
$239.5
billion
total assets2
11.3
billion barrels
net oil-equivalent proved reserves2, 3
$155.6
billion
sales and other operating revenues1
1 Year ended December 31, 2021
2 At December 31, 2021
3 For definition of “reserves,” see glossary of
energy and financial terms, page 110
chevron
stock performance
Indexed dividend growth
Basis 2006 = 100
6.7%
CVX compound
annual growth rate
$300
$250
$200
$150
$100
$50
2006
2021
Chevron
S&P 500
Peer group: BP p.l.c. (ADS), ExxonMobil, Shell p.l.c. (ADS), TotalEnergies SE (ADR).
Dividends include both cash and scrip share distributions for European peers.
Total stockholder returns*
(as of 12/31/2021)
60%
50%
40%
30%
20%
10%
0%
1-year
45.9%
S&P @ 28.7%
5-year
S&P @ 18.5%
4.5%
20%
15%
10%
5%
0%
-5%
20%
15%
10%
5%
0%
-5%
10-year
S&P @ 16.6%
5.2%
Peer group: BP p.l.c. (ADS), ExxonMobil, Shell p.l.c. (ADS), TotalEnergies SE (ADR)
* Annualized total stockholder return (TSR) as of 12/31/2021. Includes stock price appreciation and reinvested dividends when paid. For TSR
comparison purposes, ADR/ADS prices and dividends are used for non-U.S.-based companies. Dividends include both cash and scrip share
distributions.
Chevron Corporation 2021 Annual Report
XXII
2021 marked the 34th consecutive year we increased the annual per-share dividend payout
Five-year cumulative total returns
(calendar years ended December 31)
$250
$225
$200
$175
$150
$125
$100
$75
$50
$233
$124
$104
2016
2017
2018
2019
2020
2021
Chevron
S&P 500
Peer group: BP p.l.c. (ADS), ExxonMobil, Shell p.l.c. (ADS), TotalEnergies SE (ADR)
Performance graph
The stock performance graph above shows how an initial investment of $100 in Chevron stock would have compared
with an equal investment in the S&P 500 Index or the Competitor Peer Group. The comparison covers a five-year
period beginning December 31, 2016, and ending December 31, 2021, and for the peer group is weighted by market
capitalization as of the beginning of each year. It includes the reinvestment of all dividends that an investor would be
entitled to receive and is adjusted for stock splits. The interim measurement points show the value of $100 invested
on December 31, 2016, as of the end of each year between 2017 and 2021.
Chevron Corporation 2021 Annual Report
XXIII
financial and
operating highlights
Financial highlights1
Net income (loss) attributable to Chevron Corporation
Sales and other operating revenues
Cash flow from operating activities
Capital and exploratory expenditures2
2021
2020
2019
$
15,625
$ 155,606
$
$
29,187
11,720
$
$
$
$
(5,543)
$
2,924
94,471
$ 139,865
10,577
13,499
$
$
27,314
20,994
Total assets at year-end
$ 239,535
$ 239,790
$ 237,428
Total debt and finance lease obligations
$
31,369
$
44,315
$
26,973
Chevron Corporation stockholders’ equity at year-end
$ 139,067
$ 131,688
$ 144,213
Common shares outstanding at year-end (Thousands)
1,915,638
1,911,018
1,868,000
Per-share data
Net income (loss) attributable to Chevron Corporation – diluted
Cash dividends
Chevron Corporation stockholders’ equity
$
$
$
8.14
5.31
72.60
$
$
$
(2.96)
5.16
68.91
$
$
$
1 .54
4.76
77.20
Debt ratio3
Net debt ratio3
Return on stockholders’ equity3
Return on average capital employed3
1 Millions of dollars, except per-share amounts
2 Includes equity in affiliates
3 See pages 46–47 for additional information
18.4%
15.6%
11.5%
9.4%
25.2%
22.7%
(4.0)%
(2.8)%
15.8%
12.8%
2.0%
2.0%
Chevron Corporation 2021 Annual Report
XXIV
Total capital and exploratory expenditures4
($ – Billions)
Operating expense5
(as of 12/31/2021)
$25
$20
$15
$10
$5
$0
$22
$19
$20
$21
$13
$12
2016
2017
2018
2019
2020
2021
4
Includes expenditures by equity affiliates. See our Annual Reports on Form 10-K
for additional information.
5
Operating highlights6
Net production of crude oil, condensate, NGLs and synthetic oil7
(Thousands of barrels per day)
Net production of natural gas
(Millions of cubic feet per day)
Total net oil-equivalent production
(Thousands of oil-equivalent barrels per day)
Net proved reserves of crude oil, condensate and NGLs7,8
(Millions of barrels)
Net proved reserves of natural gas8
(Billions of cubic feet)
Net proved oil-equivalent reserves8
(Millions of barrels)
Refinery input
(Thousands of barrels per day)
Sales of refined products
(Thousands of barrels per day)
Number of employees at year-end9
6 Includes equity in affiliates, except number of employees
7 NGLs = natural gas liquids
8 At year-end
9 2021 excludes 5,097 service station employees
$30
$25
$20
$15
$10
$5
$25
$24
$25
$26
$25
$25
$0
2016
2017
2021
Includes operating expense, selling, general and administrative expense, and
other components of net periodic benefit costs. See our Annual Reports on Form
10-K for additional information.
2018
2020
2019
2021
1,814
7,709
3,099
6,113
2020
1,868
7,290
3,083
6,147
2019
1,865
7,157
3,058
6,521
30,908
29,922
29,457
11,264
11,134
11,431
1,479
2,454
1,377
2,224
1,564
2,577
37,498
42,628
44,679
Chevron Corporation 2021 Annual Report
XXV
maintaining
process safety
Process safety includes robust risk identification, safeguard management and assurance activities.
Maintenance turnarounds are a critical aspect of managing the process safety risks that we identify,
assess and prioritize across our assets.
A turnaround is a scheduled shutdown of
a process unit to perform maintenance,
inspections, upgrades and repairs of equipment.
Major maintenance turnarounds are crucial
to ensuring our facilities operate with high
reliability and integrity. These events provide
us with an opportunity to make targeted
improvements in reliability and performance.
In 2021, we carried out high-complexity
turnarounds at our joint venture upstream
operations at Tengiz in Kazakhstan and
Gorgon and Wheatstone facilities in
Australia and at our downstream operations
in Pascagoula, Mississippi, and Salt Lake
City, Utah. In a typical year we host 15 major
turnarounds across our enterprise, with a
third of them being high complexity.
As one of the most challenging undertakings
in our business, turnarounds require
disciplined and detailed planning to promote
safety, predictability and alignment with
cost and planned downtime targets.
Our turnaround expertise has evolved into
a centralized organization, as part of the
Chevron Technical Center, that serves the
entire enterprise. The organization provides
a turnaround process that is scalable by asset
class and enables better long-range planning,
detailed contingency and risk mitigation
planning, and resource-sharing coordination.
We also participate in benchmarking studies to
understand our performance relative to industry
and to identify improvement opportunities.
Our priorities remain ensuring safe execution,
delivering improved asset reliability and
integrity, managing costs and optimizing
downtime. Our goal is the consistent
implementation of our turnaround process –
the standards, tools and training/coaching
programs – that enables us to improve the
consistency in planning, scheduling and
executing predictable turnarounds.
Chevron Corporation 2021 Annual Report
XXVI
High-complexity events
scheduled 3+ years out
Standard risk prioritization
process applied
Resources tracked and
shared across enterprise
~1,000–6,000 personnel
per day at large events
Event lessons learned
and best practices shared
Photo: At our Gorgon LNG plant in Australia, and
across our operations, inspecting the integrity of
equipment is an important preventative practice
to maintain process safety.
financials
Photo: In our Houston, Texas, offices, as in our offices all around
the world, we believe innovation happens when we bring different
types of people together to solve the greatest challenges of energy.
Chevron Corporation 2021 Annual Report
XXVIII
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
Key Financial Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Earnings by Major Operating Area . . . . . . . . . . . . . . . . . . . . . 32
Business Environment and Outlook . . . . . . . . . . . . . . . . . . . . 32
Operating Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Consolidated Statement of Income . . . . . . . . . . . . . . . . . . . . 40
Selected Operating Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Liquidity and Capital Resources . . . . . . . . . . . . . . . . . . . . . . . 43
Financial Ratios and Metrics . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Financial and Derivative Instrument Market Risk . . . . . . . . . 47
Transactions With Related Parties . . . . . . . . . . . . . . . . . . . . . 48
Litigation and Other Contingencies . . . . . . . . . . . . . . . . . . . . 48
Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Critical Accounting Estimates and Assumptions . . . . . . . . . 50
New Accounting Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Quarterly Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Consolidated Financial Statements
Reports of Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Report of Independent Registered Public Accounting Firm
(PCAOB ID: 238) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Consolidated Statement of Income . . . . . . . . . . . . . . . . . . . . 58
Consolidated Statement of Comprehensive Income . . . . . . 59
Consolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Consolidated Statement of Cash Flows . . . . . . . . . . . . . . . . 61
Consolidated Statement of Equity . . . . . . . . . . . . . . . . . . . . . 62
Supplemental Information on Oil and Gas
Producing Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
97
Note 8
Note 2
Notes to the Consolidated Financial Statements
Note 1
Summary of Significant Accounting Policies . . . . . . . . . . . . . . . . . . . . 63
Changes in Accumulated Other Comprehensive Losses . . . . . . . . . . . . . . 66
Note 3
Information Relating to the Consolidated Statement of Cash Flows 67
Note 4 New Accounting Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Lease Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Note 5
Summarized Financial Data – Chevron U.S.A. Inc. . . . . . . . . . . . . . . 70
Note 6
Summarized Financial Data – Tengizchevroil LLP . . . . . . . . . . . . . . . 70
Note 7
Summarized Financial Data - Chevron Phillips
Chemical Company LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Fair Value Measurements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Note 9
Note 10 Financial and Derivative Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Note 11 Assets Held for Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Note 12 Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Note 13 Earnings Per Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Note 14 Operating Segments and Geographic Data . . . . . . . . . . . . . . . . . . . . . 74
Note 15 Investments and Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Note 16 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Note 17 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Note 18 Properties, Plant and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Note 19 Short-Term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Note 20 Long-Term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Note 21 Accounting for Suspended Exploratory Wells . . . . . . . . . . . . . . . . . . . 85
Note 22 Stock Options and Other Share-Based Compensation . . . . . . . . . . . 86
Note 23 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Note 24 Other Contingencies and Commitments . . . . . . . . . . . . . . . . . . . . . . . 92
Note 25 Asset Retirement Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Note 26 Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Note 27 Other Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Note 28 Financial Instruments - Credit Losses . . . . . . . . . . . . . . . . . . . . . . . . . 95
Note 29 Acquisition of Noble Energy, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE
HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This Annual Report of Chevron Corporation contains forward-looking statements relating to Chevron’s operations and energy transition plans that
are based on management’s current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries.
Words or phrases such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “advances,” “commits,” “drives,” “aims,” “forecasts,” “projects,”
“believes,” “approaches,” “seeks,” “schedules,” “estimates,” “positions,” “pursues,” “may,” “can,” “could,” “should,” “will,” “budgets,” “outlook,”
“trends,” “guidance,” “focus,” “on track,” “goals,” “objectives,” “strategies,” “opportunities,” “poised,” “potential,” “ambitions,” “aspires” and similar
expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject
to certain risks, uncertainties and other factors, many of which are beyond the company’s control and are difficult to predict. Therefore, actual
outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place
undue reliance on these forward-looking statements, which speak only as of the date of this report. 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.
Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: changing crude oil
and natural gas prices and demand for the company’s products, and production curtailments due to market conditions; crude oil production quotas
or other actions that might be imposed by the Organization of Petroleum Exporting Countries and other producing countries; technological
advancements; changes to government policies in the countries in which the company operates; public health crises, such as pandemics (including
coronavirus (COVID-19)) and epidemics, and any related government policies and actions; disruptions in the company’s global supply chain,
including supply chain constraints and escalation of the cost of goods and services; changing economic, regulatory and political environments in the
various countries in which the company operates; general domestic and international economic and political conditions; changing refining,
marketing and chemicals margins; actions of competitors or regulators; timing of exploration expenses; timing of crude oil liftings; the
competitiveness of alternate-energy sources or product substitutes; development of large carbon capture and offset markets; the results of
operations and financial condition of the company’s suppliers, vendors, partners and equity affiliates, particularly during the COVID-19 pandemic;
the inability or failure of the company’s joint-venture partners to fund their share of operations and development activities; the 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 start-up of planned projects; the potential disruption or interruption of the company’s operations due to war, accidents, political
events, civil unrest, severe weather, cyber threats, terrorist acts, or other natural or human causes beyond the company’s control; the potential
liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant operational, investment or
product changes undertaken or required by existing or future environmental statutes and regulations, including international agreements and
national or regional legislation and regulatory measures to limit or reduce greenhouse gas emissions; the potential liability resulting from pending or
future litigation; the company’s future acquisitions or dispositions of assets or shares or the delay or failure of such transactions to close based on
required closing conditions; the potential for gains and losses from asset dispositions or impairments; government mandated sales, divestitures,
recapitalizations, taxes and tax audits, tariffs, sanctions, changes in fiscal terms or restrictions on scope of company operations; foreign currency
movements compared with the U.S. dollar; material reductions in corporate liquidity and access to debt markets; the receipt of required Board
authorizations to implement capital allocation strategies, including future stock repurchase programs and dividend payments; the effects of changed
accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; the company’s ability to identify and mitigate
the risks and hazards inherent in operating in the global energy industry; and the factors set forth under the heading “Risk Factors” on pages 20
through 25 in the annual report on Form 10-K. Other unpredictable or unknown factors not discussed in this report could also have material adverse
effects on forward-looking statements.
Chevron Corporation 2021 Annual Report
31
31
Management's Discussion and Analysis of Financial Condition and Results of Operations
Key Financial Results
Millions of dollars, except per-share amounts
Net Income (Loss) Attributable to Chevron Corporation
Per Share Amounts:
Net Income (Loss) Attributable to Chevron Corporation
– Basic
– Diluted
Dividends
Sales and Other Operating Revenues
Return on:
Capital Employed
Stockholders’ Equity
Earnings by Major Operating Area
Millions of dollars
Upstream
United States
International
Total Upstream
Downstream
United States
International
Total Downstream
All Other
Net Income (Loss) Attributable to Chevron Corporation1,2
1 Includes foreign currency effects:
2 Income net of tax, also referred to as “earnings” in the discussions that follow.
$
$
$
$
$
2021
15,625
8.15
8.14
5.31
155,606
9.4 %
11.5 %
$
$
$
$
$
2020
(5,543)
(2.96)
(2.96)
5.16
94,471
(2.8) %
(4.0) %
2019
2,924
1.55
1.54
4.76
139,865
2.0 %
2.0 %
2021
2020
2019
7,319
8,499
15,818
2,389
525
2,914
(3,107)
15,625
306
$
$
$
(1,608)
(825)
(2,433)
(571)
618
47
(3,157)
(5,543)
(645)
$
$
$
(5,094)
7,670
2,576
1,559
922
2,481
(2,133)
2,924
(304)
$
$
$
$
$
$
$
$
Refer to the “Results of Operations” section beginning on page 38 for a discussion of financial results by major operating
area for the three years ended December 31, 2021.
Business Environment and Outlook
Chevron Corporation is a global energy company with substantial business activities in the following countries: Angola,
Argentina, Australia, Bangladesh, Brazil, Canada, China, Egypt, Equatorial Guinea, Israel, Kazakhstan, Kurdistan Region
of Iraq, Mexico, Nigeria, the Partitioned Zone between Saudi Arabia and Kuwait, the Philippines, Republic of Congo,
Singapore, South Korea, Thailand, the United Kingdom, the United States, and Venezuela.
The company’s objective is to deliver higher returns, lower carbon and superior shareholder value in any business
environment. Earnings of the company depend mostly on the profitability of its upstream business segment. The most
significant factor affecting the results of operations for the upstream segment is the price of crude oil, which is determined
in global markets outside of the company’s control. In the company’s downstream business, crude oil is the largest cost
component of refined products. Periods of sustained lower commodity prices could result in the impairment or write-off of
specific assets in future periods and cause the company to adjust operating expenses, including employee reductions, and
capital and exploratory expenditures, along with other measures intended to improve financial performance.
Governments, companies, communities, and other stakeholders are increasingly supporting efforts to address climate
change, recognizing that individuals and society benefit from access to affordable, reliable, and ever-cleaner energy.
International initiatives and national, regional and state legislation and regulations that aim to directly or indirectly reduce
GHG emissions are in various stages of adoption and implementation. These policies, some of which support the global net
zero emissions ambitions of the Paris Agreement, can change the amount of energy consumed, the rate of energy-demand
growth, the energy mix, and the relative economics of one fuel versus another. Implementation of these policies can be
dependent on, and can affect the pace of, technological advancements, the granting of necessary permits by governing
authorities, the availability of cost-effective, verifiable carbon credits, the availability of suppliers that can meet
sustainability and other standards, evolving regulatory requirements affecting ESG standards or other disclosures, and
evolving standards for tracking and reporting on emissions and emission reductions and removals. Beyond the legislative
and regulatory landscape, ever changing customer and consumer behavior can also influence energy demand by affecting
preferences and use of the company’s products or competitors’ products, now and in the future.
Chevron Corporation 2021 Annual Report
32
32
Management's Discussion and Analysis of Financial Condition and Results of Operations
Chevron supports the Paris Agreement’s global approach to governments addressing climate change and is committed to
taking actions to help lower the carbon intensity of its operations while continuing to meet the need for energy that
supports society. Chevron integrates climate change-related issues and the regulatory and other responses to these issues
into its strategy and planning, capital investment reviews, and risk management tools and processes, where it believes they
are applicable. They are also factored into the company’s long-range supply, demand, and energy price forecasts. These
forecasts reflect estimates of long-range effects from climate change-related policy actions, such as renewable fuel
penetration and energy efficiency standards, and demand response to oil and natural gas prices. The actual level of
expenditure required to comply with new or potential climate change-related laws and regulations and amount of additional
investments in new or existing technology or facilities, such as carbon capture and storage, is difficult to predict with
certainty and is expected to vary depending on the actual laws and regulations enacted or customer and consumer
preference in a jurisdiction, the company’s activities in it, and market conditions. As discussed in more detail below, the
company has announced planned capital spend of $10 billion through 2028 in lower carbon investments.
Although the future is uncertain, many published outlooks conclude that fossil fuels will remain a significant part of an
energy system that increasingly incorporates lower carbon sources of supply. The company will continue to develop oil and
gas resources to meet customers’ demand for energy. At the same time, Chevron believes that the future of energy is lower
carbon. The company will continue to maintain flexibility in its portfolio to be responsive to changes in policy, technology,
and customer preferences. Chevron aims to grow its traditional oil and gas business, lower the carbon intensity of its
operations and grow lower carbon businesses in renewable fuels, hydrogen, carbon capture and offsets. To grow its lower
carbon businesses, Chevron plans to target sectors of the economy where emissions are harder to abate or that cannot be
easily electrified, while leveraging the company’s capabilities, assets and customer relationships. The company’s
traditional oil and gas business may increase or decrease depending upon regulatory or market forces, among other factors.
In 2021, Chevron announced the following aspiration and targets that are aligned with its lower carbon strategy:
2050 Net Zero Upstream Aspiration Chevron aspires to achieve net zero for Upstream production Scope 1 and 2 GHG
Emissions on an equity basis by 2050. The company believes accomplishing this aspiration depends on, among other
things, partnerships with multiple stakeholders, continuing progress on commercially viable technology, government
policy, successful negotiations for carbon capture and storage and nature-based projects, availability of cost-effective,
verifiable offsets in the global market, and granting of necessary permits by governing authorities.
2028 Upstream Production GHG Intensity Targets These metrics include Scope 1, direct emissions, and Scope 2, indirect
emissions from imported electricity and steam, and are net of emissions from exported electricity and steam. The targeted
2028 reductions from 2016 on an equity ownership basis include a:
•
•
•
•
40 percent reduction in oil production GHG intensity to 24 kilograms (kg) carbon dioxide equivalent per barrel of
oil-equivalent (CO2e/boe),
26 percent reduction in gas production GHG intensity to 24 kg CO2e/boe,
53 percent reduction in methane intensity to 2 kg CO2e/boe, and
66 percent reduction in flaring GHG intensity to 3 kg CO2e/boe.
The company also targets no routine flaring by 2030. We have set 2016 as our baseline to align with the year the Paris
Agreement entered into force, and the company plans to update the metrics every five years in line with the Paris
Agreement stocktakes. We believe these updates will provide additional transparency on the company’s progress toward its
net zero aspiration.
2028 Portfolio Carbon Intensity Target The company also introduced a portfolio carbon intensity (PCI) metric, which is a
measure of the carbon intensity across the full value chain of Chevron’s entire business. This metric encompasses the
company’s Upstream and Downstream business and includes Scope 1 (direct emissions), Scope 2 (indirect emissions from
imported electricity and steam), and certain Scope 3 (primarily emissions from use of sold products) emissions. The
company’s PCI target is 71 grams (g) carbon dioxide equivalent (CO e) per megajoules (MJ) by 2028, a greater than five
percent reduction from 2016.
Planned Lower-Carbon Capital Spend through 2028 The company increased its planned capital spend to approximately
$10 billion through 2028 to advance its lower carbon strategy, which includes approximately $2 billion to lower the carbon
intensity of its traditional oil and gas operations, and approximately $8 billion for lower carbon investments in renewable
fuels, hydrogen and carbon capture and offsets. We anticipate setting additional capital spending targets as the company
Chevron Corporation 2021 Annual Report
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Management's Discussion and Analysis of Financial Condition and Results of Operations
progresses toward its 2050 Upstream production Scope 1 and 2 net zero aspiration and further grows its lower carbon
business lines.
Refer to “Risk Factors” in Part I, Item 1A, on pages 20 through 25 of the company’s Annual Report on Form 10-K for
further discussion of greenhouse gas regulation and climate change and the associated risks to Chevron’s business,
including the risks impacting Chevron’s lower carbon strategy and its aspirations, targets and plans.
Response to Market Conditions and COVID-19 Commodity prices and demand for most of our products have largely
recovered from the impacts of COVID-19 in 2020. However, some countries face a resurgence of the virus and its variants
(e.g., Delta, Omicron) that could impact demand for some of our products (e.g., jet fuel), workforce availability, timing of
project start-ups and materials movement and pose a risk to our business and future financial results.
Chevron’s operations have continued with a combination of on-site and at-home work, while monitoring local vaccine and
transmission rates. In refining, the company continued to take steps to maximize diesel and motor gasoline production,
given the decline in jet fuel demand.
In TCO, progress continued on FGP/WPMP. Staffing is at targeted levels and at the end of December 2021, over 90
percent of the TCO workforce on-site was fully vaccinated.
The effective tax rate for the company can change substantially during periods of significant earnings volatility. This is
mainly due to mix effects that are impacted both by the absolute level of earnings or losses and whether they arise in higher
or lower tax rate jurisdictions. As a result, a decline or increase in the effective income tax rate in one period may not be
indicative of expected results in future periods. Note 17 Taxes provides the company’s effective income tax rate for the last
three years.
Refer to the “Cautionary Statements Relevant to Forward-Looking Information” on page 2 and to “Risk Factors” in Part I,
Item 1A, on pages 20 through 25 of the company’s Annual Report on Form 10-K for a discussion of some of the inherent
risks that could materially impact the company’s results of operations or financial condition.
The company continually evaluates opportunities to dispose of assets that are not expected to provide sufficient long-term
value and to acquire assets or operations complementary to its asset base to help augment the company’s financial
performance and value growth. Asset dispositions and restructurings may result in significant gains or losses in future
periods.
The company closely monitors developments in the financial and credit markets, the level of worldwide economic activity,
and the implications for the company of movements in prices for crude oil and natural gas. Management takes these
developments into account in the conduct of daily operations and for business planning.
Comments related to earnings trends for the company’s major business areas are as follows:
Upstream Earnings for the upstream segment are closely aligned with industry prices for crude oil and natural gas. Crude
oil and natural gas prices are subject to external factors over which the company has no control, including product demand
connected with global economic conditions, industry production and inventory levels, technology advancements,
production quotas or other actions imposed by OPEC+ countries, actions of regulators, weather-related damage and
disruptions, competing fuel prices, natural and human causes beyond the company’s control such as the COVID-19
pandemic, and regional supply interruptions or fears thereof that may be caused by military conflicts, civil unrest or
political uncertainty. Any of these factors could also inhibit the company’s production capacity in an affected region. The
company closely monitors developments in the countries in which it operates and holds investments and seeks to manage
risks in operating its facilities and businesses.
The longer-term trend in earnings for the upstream segment is also a function of other factors, including the company’s
ability to find or acquire and efficiently produce crude oil and natural gas, changes in fiscal terms of contracts, the pace of
energy transition, and changes in tax, environmental and other applicable laws and regulations.
The company is actively managing its schedule of work, contracting, procurement, and supply chain activities to
effectively manage costs and ensure supply chain resiliency and continuity in support of operational goals. Third party
costs for capital, exploration, and operating expenses can be subject to external factors beyond the company’s control
including, but not limited to: severe weather or civil unrest, delays in construction, global and local supply chain
distribution issues, the general level of inflation, tariffs or other taxes imposed on goods or services, and market based
prices charged by the industry’s material and service providers. Chevron utilizes contracts with various pricing
mechanisms, so there may be a lag before the company’s costs reflect changes in market trends.
Chevron Corporation 2021 Annual Report
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Management's Discussion and Analysis of Financial Condition and Results of Operations
Management's Discussion and Analysis of Financial Condition and Results of Operations
Prices for goods and services in various sectors have risen over the past year. A key factor behind this trend is the
Prices for goods and services in various sectors have risen over the past year. A key factor behind this trend is the
accelerated demand for goods and transportation as companies restock materials and expand working inventories as a
accelerated demand for goods and transportation as companies restock materials and expand working inventories as a
hedge against future disruptions. Shifts in the labor market continue to create issues for companies seeking to fill positions.
hedge against future disruptions. Shifts in the labor market continue to create issues for companies seeking to fill positions.
Geographic mismatches between skills required and available labor, reductions in the overall labor supply, and perceptions
Geographic mismatches between skills required and available labor, reductions in the overall labor supply, and perceptions
of working conditions have resulted in tight labor markets.
of working conditions have resulted in tight labor markets.
As U.S. and international drilling activity continues to accelerate, continued upward market pressure is expected for oil and
As U.S. and international drilling activity continues to accelerate, continued upward market pressure is expected for oil and
gas industry inputs (such as rigs and well services). The pace of economic growth and shifting spending patterns may lead
gas industry inputs (such as rigs and well services). The pace of economic growth and shifting spending patterns may lead
to more cross-industry competition for resources, which could impact the cost of certain non-oil and gas industry goods and
to more cross-industry competition for resources, which could impact the cost of certain non-oil and gas industry goods and
services.
services.
WTI Crude Oil, Brent Crude Oil and Henry Hub Natural Gas Spot Prices - Quarterly Average
Brent
WTI
Henry Hub
Oil
$/bbl
90
75
60
45
30
15
0
HH
$/mcf
15.00
12.50
10.00
7.50
5.00
2.50
0.00
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
9102
0202
2021
The chart above shows the trend in benchmark prices for Brent crude oil, West Texas Intermediate (WTI) crude oil and
The chart above shows the trend in benchmark prices for Brent crude oil, West Texas Intermediate (WTI) crude oil and
U.S. Henry Hub natural gas. The Brent price averaged $71 per barrel for the full-year 2021, compared to $42 in 2020. As
U.S. Henry Hub natural gas. The Brent price averaged $71 per barrel for the full-year 2021, compared to $42 in 2020. As
of mid-February 2022, the Brent price was $100 per barrel. The WTI price averaged $68 per barrel for the full-year 2021,
of mid-February 2022, the Brent price was $100 per barrel. The WTI price averaged $68 per barrel for the full-year 2021,
compared to $39 in 2020. As of mid-February 2022, the WTI price was $95 per barrel. The majority of the company’s
compared to $39 in 2020. As of mid-February 2022, the WTI price was $95 per barrel. The majority of the company’s
equity crude production is priced based on the Brent benchmark.
equity crude production is priced based on the Brent benchmark.
Crude prices increased in 2021 driven by production curtailment by OPEC+ countries and steadily increasing demand for
Crude prices increased in 2021 driven by production curtailment by OPEC+ countries and steadily increasing demand for
transportation fuels. The company’s average realization for U.S. crude oil and natural gas liquids in 2021 was $56 per
transportation fuels. The company’s average realization for U.S. crude oil and natural gas liquids in 2021 was $56 per
barrel, up 84 percent from 2020. The company’s average realization for international crude oil and natural gas liquids in
barrel, up 84 percent from 2020. The company’s average realization for international crude oil and natural gas liquids in
2021 was $65 per barrel, up 79 percent from 2020.
2021 was $65 per barrel, up 79 percent from 2020.
Prices for natural gas are more closely aligned with seasonal supply-and-demand and infrastructure conditions in local
Prices for natural gas are more closely aligned with seasonal supply-and-demand and infrastructure conditions in local
markets. In the United States, prices at Henry Hub averaged $3.85 per thousand cubic feet (MCF) during 2021, compared
markets. In the United States, prices at Henry Hub averaged $3.85 per thousand cubic feet (MCF) during 2021, compared
with $1.98 per MCF during 2020. As of mid-February 2022, the Henry Hub spot price was $3.93 per MCF.
with $1.98 per MCF during 2020. As of mid-February 2022, the Henry Hub spot price was $3.93 per MCF.
Outside the United States, prices for natural gas depend on a wide range of supply, demand and regulatory circumstances.
Outside the United States, prices for natural gas depend on a wide range of supply, demand and regulatory circumstances.
The company’s long-term contract prices for liquefied natural gas (LNG) are typically linked to crude oil prices. Most of
The company’s long-term contract prices for liquefied natural gas (LNG) are typically linked to crude oil prices. Most of
the equity LNG offtake from the operated Australian LNG projects is committed under binding long-term contracts, with
the equity LNG offtake from the operated Australian LNG projects is committed under binding long-term contracts, with
some sold in the Asian spot LNG market. International natural gas realizations averaged $5.93 per MCF during 2021,
some sold in the Asian spot LNG market. International natural gas realizations averaged $5.93 per MCF during 2021,
compared with $4.59 per MCF during 2020. (See page 42 for the company’s average natural gas realizations for the U.S.
compared with $4.59 per MCF during 2020. (See page 42 for the company’s average natural gas realizations for the U.S.
and international regions.)
and international regions.)
The company’s worldwide net oil-equivalent production in 2021 was a record 3.099 million barrels per day. About 27
The company’s worldwide net oil-equivalent production in 2021 was a record 3.099 million barrels per day. About 27
percent of the company’s net oil-equivalent production in 2021 occurred in OPEC+ member countries of Angola,
percent of the company’s net oil-equivalent production in 2021 occurred in OPEC+ member countries of Angola,
Equatorial Guinea, Kazakhstan, Nigeria, the Partitioned Zone between Saudi Arabia and Kuwait and Republic of Congo.
Equatorial Guinea, Kazakhstan, Nigeria, the Partitioned Zone between Saudi Arabia and Kuwait and Republic of Congo.
The company estimates that its net oil-equivalent production in 2022 will be flat to down 3 percent compared to 2021,
The company estimates that its net oil-equivalent production in 2022 will be flat to down 3 percent compared to 2021,
assuming a Brent crude oil price of $60 per barrel and excluding the impact of asset sales that may close in 2022. This
assuming a Brent crude oil price of $60 per barrel and excluding the impact of asset sales that may close in 2022. This
estimate is subject to many factors and uncertainties, including quotas or other actions that may be imposed by OPEC+;
estimate is subject to many factors and uncertainties, including quotas or other actions that may be imposed by OPEC+;
price effects on entitlement volumes; changes in fiscal terms or restrictions on the scope of company operations; delays in
price effects on entitlement volumes; changes in fiscal terms or restrictions on the scope of company operations; delays in
construction; reservoir performance; greater-than-expected declines in production from mature fields; start-up or ramp-up
construction; reservoir performance; greater-than-expected declines in production from mature fields; start-up or ramp-up
of projects; fluctuations in demand for crude oil and natural gas in various markets; weather conditions that may shut in
of projects; fluctuations in demand for crude oil and natural gas in various markets; weather conditions that may shut in
Chevron Corporation 2021 Annual Report
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Management's Discussion and Analysis of Financial Condition and Results of Operations
Management's Discussion and Analysis of Financial Condition and Results of Operations
production; civil unrest; changing geopolitics; delays in completion of maintenance turnarounds; storage constraints or
economic conditions that could lead to shut-in production; or other disruptions to operations. The outlook for future
production levels is also affected by the size and number of economic investment opportunities and the time lag between
initial exploration and the beginning of production. The company has increased its investment emphasis on short-cycle
projects.
In January 2022, Chevron announced its intent to begin the process of exiting from its nonoperated interests in Myanmar.
At December 31, 2021, the carrying value of the company’s assets was approximately $200 million.
Net proved reserves for consolidated companies and affiliated companies totaled 11.3 billion barrels of oil-equivalent at
year-end 2021, an increase of 1 percent from year-end 2020. The reserve replacement ratio in 2021 was 112 percent. The 5
and 10 year reserve replacement ratios were 103 percent and 100 percent, respectively. Refer to Table V for a tabulation of
the company’s proved net oil and gas reserves by geographic area, at the beginning of 2019 and each year-end from 2019
through 2021, and an accompanying discussion of major changes to proved reserves by geographic area for the three-year
period ending December 31, 2021.
Refer to the “Results of Operations” section on pages 39 and 40 for additional discussion of the company’s upstream
business.
Downstream Earnings for the downstream segment are closely tied to margins on the refining, manufacturing and
marketing of products that include gasoline, diesel, jet fuel, lubricants, fuel oil, fuel and lubricant additives, petrochemicals
and renewable fuels. Industry margins are sometimes volatile and can be affected by the global and regional supply-and-
demand balance for refined products and petrochemicals, and by changes in the price of crude oil, other refinery and
petrochemical feedstocks, and natural gas. Industry margins can also be influenced by inventory levels, geopolitical events,
costs of materials and services, refinery or chemical plant capacity utilization, maintenance programs, and disruptions at
refineries or chemical plants resulting from unplanned outages due to severe weather, fires or other operational events.
Other factors affecting profitability for downstream operations include the reliability and efficiency of the company’s
refining, marketing and petrochemical assets, the effectiveness of its crude oil and product supply functions, and the
volatility of tanker-charter rates for the company’s shipping operations, which are driven by the industry’s demand for
crude oil and product tankers. Other factors beyond the company’s control include the general level of inflation and energy
costs to operate the company’s refining, marketing and petrochemical assets, and changes in tax, environmental, and other
applicable laws and regulations.
The company’s most significant marketing areas are the West Coast and Gulf Coast of the United States and Asia Pacific.
Chevron operates or has significant ownership interests in refineries in each of these areas. Additionally, the company has a
small but growing presence in renewable fuels.
Chevron Corporation 2021 Annual Report
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Refer to the “Results of Operations” section on page 40 for additional discussion of the company’s downstream operations.
All Other consists of worldwide cash management and debt financing activities, corporate administrative functions,
insurance operations, real estate activities and technology companies.
Operating Developments
Upstream
concession for 20 years, through 2050.
Key operating developments and other events during 2021 and early 2022 included the following:
Angola Chevron’s affiliate, Cabinda Gulf Oil Company Limited (CABGOC), signed an agreement to extend the Block 0
Australia Sanctioned the Jansz-Io compression project, a part of the Gorgon development and an important source of
natural gas supply to the Gorgon LNG facility.
Brazil Completed the sale of the company's 37.5 percent nonoperated interest in the Papa-Terra oil field.
Equatorial Guinea Announced the start-up and first LNG cargo from the Alen Gas Monetization Project.
Japan Announced the signing of a binding Sale and Purchase Agreement with Hokkaido Gas Co., Ltd. for the delivery of
about a half million tons of LNG over a period of five years, starting in 2022.
United States Entered FEED for the Ballymore project, which is being developed as a subsea tieback to the existing Blind
Faith facility, in the deepwater Gulf of Mexico.
United States Sanctioned the Whale project in the deepwater Gulf of Mexico.
Downstream
marketing business, and brand NEXBASETM.
Finland Announced an agreement to acquire Neste Oyj’s Group III base oil business, including its related sales and
South Korea Chevron’s 50 percent owned affiliate, GS Caltex, started up an olefins mixed-feed cracker and associated
polyethylene unit at its Yeosu refinery ahead of schedule and under budget.
United States Announced the commissioning and start-up of the world’s first commercial-scale ISOALKY™ process unit
at the Salt Lake City Refinery. This proprietary technology uses ionic liquids to produce a high octane gasoline blending
component as a cost-effective alternative to conventional alkylation technologies and offers environmental and process
safety advantages.
United States Began producing renewable diesel at the El Segundo, California refinery by co-processing bio-feedstock.
United States Announced establishment of its first branded Compressed Natural Gas (CNG) station, as part of its plan to
sell RNG through more than 30 CNG stations in California by 2025.
United States Acquired an equity interest in American Natural Gas LLC (now Beyond6, LLC) and its network of 60
compressed natural gas stations across the United States to grow its RNG value chain.
United States Announced the second expansion of its joint venture, Brightmark RNG Holdings LLC, to own projects
across the United States to produce and market dairy biomethane, a RNG. First gas delivery at the Lawnhurst site in New
York was announced in November.
sustainably sourced plant-based oils.
United States Announced the launch of Havoline® PRO-RS™ Renewable Full Synthetic Motor Oil made with 25 percent
United States Celebrated the opening of the 1,000th ExtraMile Convenience store.
United States Chevron’s 50 percent owned affiliate, CPChem, announced the first commercial sales of their Marlex®
Anew™ Circular Polyethylene, which uses advanced recycling technology to process pyrolysis oil, a feedstock made from
difficult-to-recycle waste plastics.
United States Announced the signing of definitive transaction agreements to create a joint venture with Bunge North
America, Inc., to own and operate soybean processing facilities.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Refer to the “Results of Operations” section on page 40 for additional discussion of the company’s downstream operations.
All Other consists of worldwide cash management and debt financing activities, corporate administrative functions,
insurance operations, real estate activities and technology companies.
Operating Developments
Key operating developments and other events during 2021 and early 2022 included the following:
Upstream
Angola Chevron’s affiliate, Cabinda Gulf Oil Company Limited (CABGOC), signed an agreement to extend the Block 0
concession for 20 years, through 2050.
Australia Sanctioned the Jansz-Io compression project, a part of the Gorgon development and an important source of
natural gas supply to the Gorgon LNG facility.
Brazil Completed the sale of the company's 37.5 percent nonoperated interest in the Papa-Terra oil field.
Equatorial Guinea Announced the start-up and first LNG cargo from the Alen Gas Monetization Project.
Japan Announced the signing of a binding Sale and Purchase Agreement with Hokkaido Gas Co., Ltd. for the delivery of
about a half million tons of LNG over a period of five years, starting in 2022.
United States Entered FEED for the Ballymore project, which is being developed as a subsea tieback to the existing Blind
Faith facility, in the deepwater Gulf of Mexico.
United States Sanctioned the Whale project in the deepwater Gulf of Mexico.
Downstream
Finland Announced an agreement to acquire Neste Oyj’s Group III base oil business, including its related sales and
marketing business, and brand NEXBASETM.
South Korea Chevron’s 50 percent owned affiliate, GS Caltex, started up an olefins mixed-feed cracker and associated
polyethylene unit at its Yeosu refinery ahead of schedule and under budget.
United States Announced the commissioning and start-up of the world’s first commercial-scale ISOALKY™ process unit
at the Salt Lake City Refinery. This proprietary technology uses ionic liquids to produce a high octane gasoline blending
component as a cost-effective alternative to conventional alkylation technologies and offers environmental and process
safety advantages.
United States Began producing renewable diesel at the El Segundo, California refinery by co-processing bio-feedstock.
United States Announced establishment of its first branded Compressed Natural Gas (CNG) station, as part of its plan to
sell RNG through more than 30 CNG stations in California by 2025.
United States Acquired an equity interest in American Natural Gas LLC (now Beyond6, LLC) and its network of 60
compressed natural gas stations across the United States to grow its RNG value chain.
United States Announced the second expansion of its joint venture, Brightmark RNG Holdings LLC, to own projects
across the United States to produce and market dairy biomethane, a RNG. First gas delivery at the Lawnhurst site in New
York was announced in November.
United States Announced the launch of Havoline® PRO-RS™ Renewable Full Synthetic Motor Oil made with 25 percent
sustainably sourced plant-based oils.
United States Celebrated the opening of the 1,000th ExtraMile Convenience store.
United States Chevron’s 50 percent owned affiliate, CPChem, announced the first commercial sales of their Marlex®
Anew™ Circular Polyethylene, which uses advanced recycling technology to process pyrolysis oil, a feedstock made from
difficult-to-recycle waste plastics.
United States Announced the signing of definitive transaction agreements to create a joint venture with Bunge North
America, Inc., to own and operate soybean processing facilities.
Chevron Corporation 2021 Annual Report
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Management's Discussion and Analysis of Financial Condition and Results of Operations
Other
United States Announced the launch of Chevron’s $300 million Future Energy Fund II focused on technologies that have
the potential to enable affordable, reliable, and ever-cleaner energy for all.
United States Announced plans with partners to develop carbon negative bioenergy in Mendota, California.
United States Announced memorandums of understanding with Toyota Motors North America, Inc. to explore a strategic
alliance to catalyze and lead the development of commercially viable, large-scale businesses in hydrogen; with Cummins
Inc. to explore a strategic alliance to develop commercially viable business opportunities in hydrogen and other alternative
energy sources; with Delta Air Lines, Inc. and Google LLC to track sustainable aviation fuel test batch emissions data
using cloud-based technology; and with Progress Rail Locomotive Inc., a Caterpillar company, and BNSF Railway
Company to demonstrate hydrogen-fueled locomotives.
United States Acquired all of the publicly held common units representing limited partner interests in Noble Midstream
Partners LP not already owned by Chevron and its affiliates.
United States Announced a collaboration agreement with Caterpillar Inc. to develop hydrogen demonstration projects in
transportation and stationary power applications, including prime power.
United States Announced a letter of intent with Gevo, Inc. to jointly invest in building and operating one or more new
facilities that process inedible corn to produce sustainable aviation fuel.
United States Announced agreement on a framework to acquire an equity interest in ACES Delta, LLC that owns the
Advanced Clean Energy Storage project. This project aims to produce, store and transport green hydrogen at utility scale.
United States Announced a framework with Enterprise Product Partners L.P. to study and evaluate opportunities for carbon
dioxide capture, utilization, and storage from their respective business operations in the U.S. Midcontinent and Gulf Coast.
United States Invested in companies to access lower-carbon technologies, including Baseload Capital AB (low-temperature
geothermal and heat power), Starfire Energy (carbon-free ammonia and carbon-free hydrogen), Ocergy, Inc. (floating
offshore and wind turbine technology), Mainspring (lower-carbon generators for electric grids), Raygen (solar-hydro plant
with storage), Boomitra (soil carbon offset platform), Natel Energy (hydro-power based technology), Raven SR Inc.
(modular waste-to-green hydrogen and renewable synthetic fuel facilities), Sapphire Technologies (waste energy recovery
systems), Hydrogenious LOHC Technologies (liquid organic hydrogen carriers), gr3n SA (plastics recycling technology),
Malta Inc. (thermal energy storage) and Ionomr Innovations Inc. (ion-exchange membranes and polymers).
Common Stock Dividends The 2021 annual dividend was $5.31 per share, making 2021 the 34th consecutive year that the
company increased its annual per share dividend payout. In January 2022, the company’s Board of Directors increased its
quarterly dividend by $0.08 per share, approximately six percent, to $1.42 per share payable in March 2022.
Common Stock Repurchase Program The company resumed stock repurchases in third quarter 2021 and purchased $1.4
billion of its common stock in 2021 under its stock repurchase program. The company currently expects to repurchase
$1.25 billion of its common stock during the first quarter of 2022.
Results of Operations
The following section presents the results of operations and variances on an after-tax basis for the company’s business
segments – Upstream and Downstream – as well as for “All Other.” Earnings are also presented for the U.S. and
international geographic areas of the Upstream and Downstream business segments. Refer to Note 14 Operating Segments
and Geographic Data for a discussion of the company’s “reportable segments.” This section should also be read in
conjunction with the discussion in “Business Environment and Outlook” on pages 32 through 37. Refer to the “Selected
Operating Data” table on page 42 for a three-year comparison of production volumes, refined product sales volumes, and
refinery inputs. A discussion of variances between 2020 and 2019 can be found in the “Results of Operations” section on
pages 37 through 38 of the company’s 2020 Annual Report on Form 10-K filed with the SEC on February 25, 2021.
Chevron Corporation 2021 Annual Report
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Management's Discussion and Analysis of Financial Condition and Results of Operations
Management's Discussion and Analysis of Financial Condition and Results of Operations
Other
United States Announced the launch of Chevron’s $300 million Future Energy Fund II focused on technologies that have
the potential to enable affordable, reliable, and ever-cleaner energy for all.
United States Announced plans with partners to develop carbon negative bioenergy in Mendota, California.
United States Announced memorandums of understanding with Toyota Motors North America, Inc. to explore a strategic
alliance to catalyze and lead the development of commercially viable, large-scale businesses in hydrogen; with Cummins
Inc. to explore a strategic alliance to develop commercially viable business opportunities in hydrogen and other alternative
energy sources; with Delta Air Lines, Inc. and Google LLC to track sustainable aviation fuel test batch emissions data
using cloud-based technology; and with Progress Rail Locomotive Inc., a Caterpillar company, and BNSF Railway
Company to demonstrate hydrogen-fueled locomotives.
United States Acquired all of the publicly held common units representing limited partner interests in Noble Midstream
Partners LP not already owned by Chevron and its affiliates.
United States Announced a collaboration agreement with Caterpillar Inc. to develop hydrogen demonstration projects in
transportation and stationary power applications, including prime power.
United States Announced a letter of intent with Gevo, Inc. to jointly invest in building and operating one or more new
facilities that process inedible corn to produce sustainable aviation fuel.
United States Announced agreement on a framework to acquire an equity interest in ACES Delta, LLC that owns the
Advanced Clean Energy Storage project. This project aims to produce, store and transport green hydrogen at utility scale.
United States Announced a framework with Enterprise Product Partners L.P. to study and evaluate opportunities for carbon
dioxide capture, utilization, and storage from their respective business operations in the U.S. Midcontinent and Gulf Coast.
United States Invested in companies to access lower-carbon technologies, including Baseload Capital AB (low-temperature
geothermal and heat power), Starfire Energy (carbon-free ammonia and carbon-free hydrogen), Ocergy, Inc. (floating
offshore and wind turbine technology), Mainspring (lower-carbon generators for electric grids), Raygen (solar-hydro plant
with storage), Boomitra (soil carbon offset platform), Natel Energy (hydro-power based technology), Raven SR Inc.
(modular waste-to-green hydrogen and renewable synthetic fuel facilities), Sapphire Technologies (waste energy recovery
systems), Hydrogenious LOHC Technologies (liquid organic hydrogen carriers), gr3n SA (plastics recycling technology),
Malta Inc. (thermal energy storage) and Ionomr Innovations Inc. (ion-exchange membranes and polymers).
Common Stock Dividends The 2021 annual dividend was $5.31 per share, making 2021 the 34th consecutive year that the
company increased its annual per share dividend payout. In January 2022, the company’s Board of Directors increased its
quarterly dividend by $0.08 per share, approximately six percent, to $1.42 per share payable in March 2022.
Common Stock Repurchase Program The company resumed stock repurchases in third quarter 2021 and purchased $1.4
billion of its common stock in 2021 under its stock repurchase program. The company currently expects to repurchase
$1.25 billion of its common stock during the first quarter of 2022.
Results of Operations
The following section presents the results of operations and variances on an after-tax basis for the company’s business
segments – Upstream and Downstream – as well as for “All Other.” Earnings are also presented for the U.S. and
international geographic areas of the Upstream and Downstream business segments. Refer to Note 14 Operating Segments
and Geographic Data for a discussion of the company’s “reportable segments.” This section should also be read in
conjunction with the discussion in “Business Environment and Outlook” on pages 32 through 37. Refer to the “Selected
Operating Data” table on page 42 for a three-year comparison of production volumes, refined product sales volumes, and
refinery inputs. A discussion of variances between 2020 and 2019 can be found in the “Results of Operations” section on
pages 37 through 38 of the company’s 2020 Annual Report on Form 10-K filed with the SEC on February 25, 2021.
U.S. Upstream
Millions of dollars
Earnings (Loss)
2021
2020
$
7,319
$
(1,608) $
2019
(5,094)
U.S. upstream reported earnings of $7.3 billion in 2021, compared with a loss of $1.6 billion in 2020. The increase was due
to higher realizations of $6.9 billion, the absence of 2020 impairments and write-offs of $1.2 billion, higher sales volumes
of $760 million, and higher asset sales gains of $640 million.
The company’s average realization for U.S. crude oil and natural gas liquids in 2021 was $56.06 per barrel compared with
$30.53 in 2020. The average natural gas realization was $3.11 per thousand cubic feet in 2021, compared with $0.98 in
2020.
Net oil-equivalent production in 2021 averaged 1.14 million barrels per day, up 8 percent from 2020. The increase was due
to an additional 162,000 barrels per day of production from the Noble Energy acquisition, partially offset by a 63,000
barrels per day decrease related to the Appalachian asset sale.
The net liquids component of oil-equivalent production for 2021 averaged 858,000 barrels per day, up 9 percent from 2020.
Net natural gas production averaged 1.69 billion cubic feet per day in 2021, an increase of 5 percent from 2020.
International Upstream
Millions of dollars
Earnings (Loss)*
*Includes foreign currency effects:
2021
8,499
302
$
$
$
$
2020
(825) $
(285) $
2019
7,670
(323)
International upstream reported earnings of $8.5 billion in 2021, compared with a loss of $825 million in 2020. The
increase was primarily due to higher realizations of $7.6 billion, along with the absence of 2020 impairments and write-offs
of $3.6 billion and severance charges of $290 million. Partially offsetting these increases are higher tax charges of $630
million, the absence of 2020 asset sales gains of $550 million, and higher depreciation expenses of $670 million and lower
sales volumes of $540 million. Foreign currency effects had a favorable impact on earnings of $587 million between
periods.
The company’s average realization for international crude oil and natural gas liquids in 2021 was $64.53 per barrel
compared with $36.07 in 2020. The average natural gas realization was $5.93 per thousand cubic feet in 2021 compared
with $4.59 in 2020.
International net oil-equivalent production was 1.96 million barrels per day in 2021, down 3 percent from 2020. The
decrease was primarily due to the absence of 69,000 barrels per day following expiration of the Rokan concession in
38
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Indonesia, unfavorable entitlement effects, normal field declines and the effect of asset sales, partially offset by 113,000
barrels per day associated with the Noble Energy acquisition and lower production curtailments.
The net liquids component of international oil-equivalent production was 956,000 barrels per day in 2021, a decrease of 11
percent from 2020. International net natural gas production of 6.02 billion cubic feet per day in 2021 increased 6 percent
from 2020.
U.S. Downstream
Millions of dollars
Earnings (Loss)
2021
$
2,389
$
2020
(571) $
2019
1,559
U.S. downstream reported earnings of $2.4 billion in 2021, compared with a loss of $571 million in 2020. The increase was
primarily due to higher margins on refined product sales of $1.6 billion, higher earnings from 50 percent-owned CPChem
of $1.0 billion and higher sales volumes of $470 million, partially offset by higher operating expenses of $150 million.
Total refined product sales of 1.14 million barrels per day in 2021 increased 14 percent from 2020, mainly due to higher
gasoline, jet fuel, and diesel demand as travel restrictions associated with the COVID-19 pandemic continue to ease.
International Downstream
Millions of dollars
Earnings*
*Includes foreign currency effects:
$
$
2021
525
185
$
$
2020
618 $
(152) $
2019
922
17
International downstream earned $525 million in 2021, compared with $618 million in 2020. The decrease in earnings was
largely due to lower margins on refined product sales of $330 million and higher operating expenses of $100 million,
partially offset by a favorable swing in foreign currency effects of $337 million between periods.
Total refined product sales of 1.32 million barrels per day in 2021 were up 8 percent from 2020, mainly due to the second
quarter 2020 acquisition of Puma Energy (Australia) Holdings Pty Ltd. and higher diesel and gasoline demand, partially
offset by lower jet fuel demand.
All Other
Millions of dollars
Net charges*
*Includes foreign currency effects:
2021
(3,107)
(181)
$
$
2020
(3,157) $
(208) $
2019
(2,133)
2
$
$
All Other consists of worldwide cash management and debt financing activities, corporate administrative functions,
insurance operations, real estate activities, and technology companies.
Net charges in 2021 decreased $50 million from 2020. The change between periods was mainly due to the absence of 2020
severance, Noble acquisition and mining remediation costs, and lower corporate charges, partially offset by higher
employee benefit costs and a loss on early retirement of debt. Foreign currency effects decreased net charges by $27
million between periods.
Consolidated Statement of Income
Comparative amounts for certain income statement categories are shown below. A discussion of variances between 2020
and 2019 can be found in the “Consolidated Statement of Income” section on pages 39 and 40 of the company’s 2020
Annual Report on Form 10-K.
Millions of dollars
Sales and other operating revenues
2021
155,606
$
2020
$
94,471 $
2019
139,865
Sales and other operating revenues increased in 2021 mainly due to higher refined product, crude oil, and natural gas prices
and sales volumes.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
Millions of dollars
Income (loss) from equity affiliates
$
2021
5,657
$
2020
(472) $
2019
3,968
Income from equity affiliates improved in 2021 mainly due to the absence of the full impairment of Petropiar and
Petroboscan in Venezuela in 2020, higher upstream-related earnings from Tengizchevroil in Kazakhstan and Angola LNG,
and higher downstream-related earnings from CPChem and GS Caltex in Korea.
Refer to Note 15 Investments and Advances for a discussion of Chevron’s investments in affiliated companies.
Millions of dollars
Other income
$
2021
1,202
$
2020
693 $
2019
2,683
Other income increased in 2021 mainly due to a favorable swing in foreign currency effects and higher gains on asset sales,
partially offset by losses on the early retirement of debt.
Millions of dollars
Purchased crude oil and products
$
2021
89,372
2020
$
50,488 $
2019
80,113
Crude oil and product purchases increased in 2021 primarily due to higher crude oil, natural gas, and refined product prices
and higher refined product volumes.
Millions of dollars
Operating, selling, general and administrative expenses
$
2021
24,740
2020
$
24,536 $
2019
25,528
Operating, selling, general and administrative expenses increased in 2021 primarily due to higher employee benefit and
transportation costs partially offset by the absence of 2020 severance accruals.
Millions of dollars
Exploration expense
$
2021
549
Exploration expenses in 2021 decreased primarily due to lower charges for well write-offs.
Millions of dollars
Depreciation, depletion and amortization
$
2021
17,925
$
$
2020
1,537 $
2019
770
2020
19,508 $
2019
29,218
Depreciation, depletion and amortization expenses decreased in 2021 primarily due to lower impairment charges, partially
offset by higher rates and production.
Millions of dollars
Taxes other than on income
$
2021
6,840
$
2020
4,499 $
2019
4,136
Taxes other than on income increased in 2021 primarily due to higher regulatory expenses, taxes on production and excise
taxes, which was primarily driven by higher refined product sales in Australia.
Millions of dollars
Interest and debt expense
$
2021
712
$
2020
697 $
2019
798
Interest and debt expenses increased in 2021 mainly due to interest expense associated with debt acquired in the Noble
Energy acquisition.
Millions of dollars
Other components of net periodic benefit costs
$
2021
688
$
2020
880 $
Other components of net periodic benefit costs decreased in 2021 primarily due to lower interest costs.
Millions of dollars
Income tax expense (benefit)
$
2021
5,950
2020
$
(1,892) $
2019
417
2019
2,691
The increase in income tax expense in 2021 of $7.84 billion is due to the increase in total income before tax for the
company of $29.09 billion. The increase in income before taxes for the company is primarily the result of higher upstream
realizations, the absence of 2020 impairments and write-offs, and higher downstream margins.
U.S. income before tax increased from a loss of $5.70 billion in 2020 to income of $9.67 billion in 2021. This $15.37
billion increase in income was primarily driven by higher upstream realizations, higher downstream margins and the
absence of 2020 impairments and write-offs. The increase in income had a direct impact on the company’s U.S. income tax
resulting in an increase to tax expense of $3.18 billion between year-over-year periods, from a tax benefit of $1.58 billion
in 2020 to a charge of $1.60 billion in 2021.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
International income before tax increased from a loss of $1.75 billion in 2020 to income of $11.97 billion in 2021. This
$13.72 billion increase in income was primarily driven by higher upstream realizations and the absence of 2020
impairments and write-offs. The increased income primarily drove the $4.66 billion increase in international income tax
expense between year-over-year periods, from a tax benefit of $308 million in 2020 to a charge of $4.35 billion in 2021.
Refer also to the discussion of the effective income tax rate in Note 17 Taxes.
Selected Operating Data1,2
U.S. Upstream
Net Crude Oil and Natural Gas Liquids Production (MBPD)
Net Natural Gas Production (MMCFPD)3
Net Oil-Equivalent Production (MBOEPD)
Sales of Natural Gas (MMCFPD)
Sales of Natural Gas Liquids (MBPD)
Revenues from Net Production
Liquids ($/Bbl)
Natural Gas ($/MCF)
International Upstream
Net Crude Oil and Natural Gas Liquids Production (MBPD)4
Net Natural Gas Production (MMCFPD)3
Net Oil-Equivalent Production (MBOEPD)4
Sales of Natural Gas (MMCFPD)
Sales of Natural Gas Liquids (MBPD)
Revenues from Liftings
Liquids ($/Bbl)
Natural Gas ($/MCF)
Worldwide Upstream
Net Oil-Equivalent Production (MBOEPD)4
United States
International
Total
U.S. Downstream
Gasoline Sales (MBPD)5
Other Refined Product Sales (MBPD)
Total Refined Product Sales (MBPD)
Sales of Natural Gas Liquids (MBPD)
Refinery Input (MBPD)6
International Downstream
Gasoline Sales (MBPD)5
Other Refined Product Sales (MBPD)
Total Refined Product Sales (MBPD)7
$
$
$
$
2021
858
1,689
1,139
4,007
201
2020
790
1,607
1,058
3,894
208
56.06 $
3.11 $
30.53 $
0.98 $
956
6,020
1,960
5,178
84
1,078
5,683
2,025
5,634
46
64.53 $
5.93 $
36.07 $
4.59 $
1,139
1,960
3,099
655
484
1,139
29
903
1,058
2,025
3,083
581
422
1,003
25
793
321
994
1,315
96
576
264
957
1,221
74
584
2019
724
1,225
929
4,016
130
48.54
1.09
1,141
5,932
2,129
5,869
34
58.14
5.83
929
2,129
3,058
667
583
1,250
101
947
289
1,038
1,327
72
617
36
602
53
3
379
Sales of Natural Gas Liquids (MBPD)
Refinery Input (MBPD)
1 Includes company share of equity affiliates.
2 MBPD – thousands of barrels per day; MMCFPD – millions of cubic feet per day; MBOEPD – thousands of barrels of oil-equivalents per day; Bbl – barrel; MCF –
thousands of cubic feet. Oil-equivalent gas (OEG) conversion ratio is 6,000 cubic feet of natural gas = 1 barrel of crude oil.
3 Includes natural gas consumed in operations (MMCFPD):
United States
International
4 Includes net production of synthetic oil:
Canada
Venezuela affiliate
44
548
55
—
5 Includes branded and unbranded gasoline.
6 In May 2019, the company acquired the Pasadena Refinery in Pasadena, Texas, which has an operable capacity of 110,000 barrels per day.
7 Includes sales of affiliates (MBPD):
357
37
566
54
—
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Management's Discussion and Analysis of Financial Condition and Results of Operations
Management's Discussion and Analysis of Financial Condition and Results of Operations
Liquidity and Capital Resources
Sources and Uses of Cash The strength of the company’s balance sheet enables it to fund any timing differences
throughout the year between cash inflows and outflows.
Cash, Cash Equivalents and Marketable Securities Total balances were $5.7 billion and $5.6 billion at December 31,
2021 and 2020, respectively. Cash provided by operating activities in 2021 was $29.2 billion, compared to $10.6 billion in
2020, primarily due to higher crude oil and natural gas prices. Cash provided by operating activities was net of
contributions to employee pension plans of approximately $1.8 billion in 2021 and $1.2 billion in 2020. Cash provided by
investing activities included proceeds and deposits related to asset sales of $1.4 billion in 2021 and $2.9 billion in 2020.
Restricted cash of $1.2 billion and $1.1 billion at December 31, 2021 and 2020, respectively, was held in cash and short-
term marketable securities and recorded as “Deferred charges and other assets” and “Prepaid expenses and other current
assets” on the Consolidated Balance Sheet. These amounts are generally associated with upstream decommissioning
activities, tax payments and funds held in escrow for tax-deferred exchanges.
Dividends Dividends paid to common stockholders were $10.2 billion in 2021 and $9.7 billion in 2020.
Debt and Finance Lease Liabilities Total debt and finance lease liabilities were $31.4 billion at December 31, 2021, down
from $44.3 billion at year-end 2020.
The $12.9 billion decrease in total debt and finance lease liabilities during 2021 was primarily due to the repayment of
long-term notes that matured during the year, the early retirement of long-term notes and the credit facility held by Noble
Midstream Partners LP, and the elimination of borrowings under the company’s commercial paper program. The company
completed a tender offer, with the objective of lowering future interest expenses, and redeemed bonds with a book value
(including fair market price adjustments) of $3.4 billion in October 2021. The company’s debt and finance lease liabilities
due within one year, consisting primarily of the current portion of long-term debt and redeemable long-term obligations,
totaled $8.0 billion at December 31, 2021, compared with $11.4 billion at year-end 2020. Of these amounts, $7.8 billion
and $9.8 billion were reclassified to long-term debt at the end of 2021 and 2020, respectively.
At year-end 2021, settlement of these obligations was not expected to require the use of working capital in 2022, as the
company had the intent and the ability, as evidenced by committed credit facilities, to refinance them on a long-term basis.
The company has an automatic shelf registration statement that expires in August 2023 for an unspecified amount of
nonconvertible debt securities issued by Chevron Corporation or CUSA.
International income before tax increased from a loss of $1.75 billion in 2020 to income of $11.97 billion in 2021. This
$13.72 billion increase in income was primarily driven by higher upstream realizations and the absence of 2020
impairments and write-offs. The increased income primarily drove the $4.66 billion increase in international income tax
expense between year-over-year periods, from a tax benefit of $308 million in 2020 to a charge of $4.35 billion in 2021.
Refer also to the discussion of the effective income tax rate in Note 17 Taxes.
Selected Operating Data1,2
U.S. Upstream
Net Crude Oil and Natural Gas Liquids Production (MBPD)
Net Crude Oil and Natural Gas Liquids Production (MBPD)4
Net Natural Gas Production (MMCFPD)3
Net Oil-Equivalent Production (MBOEPD)
Sales of Natural Gas (MMCFPD)
Sales of Natural Gas Liquids (MBPD)
Revenues from Net Production
Liquids ($/Bbl)
Natural Gas ($/MCF)
International Upstream
Net Natural Gas Production (MMCFPD)3
Net Oil-Equivalent Production (MBOEPD)4
Sales of Natural Gas (MMCFPD)
Sales of Natural Gas Liquids (MBPD)
Revenues from Liftings
Liquids ($/Bbl)
Natural Gas ($/MCF)
Worldwide Upstream
United States
International
Total
Net Oil-Equivalent Production (MBOEPD)4
U.S. Downstream
Gasoline Sales (MBPD)5
Other Refined Product Sales (MBPD)
Total Refined Product Sales (MBPD)
Sales of Natural Gas Liquids (MBPD)
Refinery Input (MBPD)6
International Downstream
Gasoline Sales (MBPD)5
Other Refined Product Sales (MBPD)
Total Refined Product Sales (MBPD)7
Sales of Natural Gas Liquids (MBPD)
Refinery Input (MBPD)
1
Includes company share of equity affiliates.
4 Includes net production of synthetic oil:
United States
International
Canada
Venezuela affiliate
5 Includes branded and unbranded gasoline.
7 Includes sales of affiliates (MBPD):
$
$
$
$
56.06 $
3.11 $
30.53 $
0.98 $
64.53 $
5.93 $
36.07 $
4.59 $
2021
858
1,689
1,139
4,007
201
956
6,020
1,960
5,178
84
1,139
1,960
3,099
655
484
1,139
29
903
321
994
1,315
96
576
44
548
55
—
357
2020
790
1,607
1,058
3,894
208
1,078
5,683
2,025
5,634
46
1,058
2,025
3,083
581
422
1,003
25
793
264
957
1,221
74
584
37
566
54
—
348
2019
724
1,225
929
4,016
130
48.54
1.09
1,141
5,932
2,129
5,869
34
58.14
5.83
929
2,129
3,058
667
583
1,250
101
947
289
1,038
1,327
72
617
36
602
53
3
379
2 MBPD – thousands of barrels per day; MMCFPD – millions of cubic feet per day; MBOEPD – thousands of barrels of oil-equivalents per day; Bbl – barrel; MCF –
thousands of cubic feet. Oil-equivalent gas (OEG) conversion ratio is 6,000 cubic feet of natural gas = 1 barrel of crude oil.
3 Includes natural gas consumed in operations (MMCFPD):
6 In May 2019, the company acquired the Pasadena Refinery in Pasadena, Texas, which has an operable capacity of 110,000 barrels per day.
42
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43
The major debt rating agencies routinely evaluate the company’s debt, and the company’s cost of borrowing can increase
or decrease depending on these debt ratings. The company has outstanding public bonds issued by Chevron Corporation,
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CUSA, Noble, and Texaco Capital Inc. Most of these securities are the obligations of, or guaranteed by, Chevron
Corporation and are rated AA- by Standard and Poor’s Corporation and Aa2 by Moody’s Investors Service. The
company’s U.S. commercial paper is rated A-1+ by Standard and Poor’s and P-1 by Moody’s. All of these ratings denote
high-quality, investment-grade securities.
The company’s future debt level is dependent primarily on results of operations, cash that may be generated from asset
dispositions, the capital program, lending commitments to affiliates and shareholder distributions. Based on its high-quality
debt ratings, the company believes that it has substantial borrowing capacity to meet unanticipated cash requirements.
During extended periods of low prices for crude oil and natural gas and narrow margins for refined products and
commodity chemicals, the company has the ability to modify its capital spending plans and discontinue or curtail the stock
repurchase program. This provides the flexibility to continue paying the common stock dividend and remain committed to
retaining the company’s high-quality debt ratings.
Committed Credit Facilities Information related to committed credit facilities is included in Note 19 Short-Term Debt.
Summarized Financial Information for Guarantee of Securities of Subsidiaries CUSA issued bonds that are fully and
unconditionally guaranteed on an unsecured basis by Chevron Corporation (together, the “Obligor Group”). The tables
below contain summary financial information for Chevron Corporation, as Guarantor, excluding its consolidated
subsidiaries, and CUSA, as the issuer, excluding its consolidated subsidiaries. The summary financial information of the
Obligor Group is presented on a combined basis, and transactions between the combined entities have been eliminated.
Financial information for non-guarantor entities has been excluded.
Sales and other operating revenues
Sales and other operating revenues - related party
Total costs and other deductions
Total costs and other deductions - related party
Net income (loss)
Current assets
Current assets - related party
Other assets
Current liabilities
Current liabilities - related party
Other liabilities
Total net equity (deficit)
Year Ended
December 31, 2021
Year Ended
December 31, 2020
(Millions of dollars) (unaudited)
$
$
$
88,038 $
28,499
86,369
28,277
5,515 $
49,636
17,044
57,575
14,052
(1,610)
At December 31,
2021
At December 31,
2020
(Millions of dollars) (unaudited)
15,567 $
12,227
48,461
22,554
79,778
32,825
9,196
5,719
48,993
20,965
55,273
34,983
$
(58,902) $
(47,313)
Common Stock Repurchase Program The Board of Directors authorized a stock repurchase program in 2019, with a
maximum dollar limit of $25 billion and no set term limits. During 2021, the company purchased 12.9 million shares for
$1.4 billion under the program. As of December 31, 2021, the company had purchased a total of 61.5 million shares for
$6.8 billion, resulting in $18.2 billion remaining under the program. The company currently expects to repurchase $1.25
billion of its common stock during the first quarter of 2022.
Repurchases may be made from time to time in the open market, by block purchases, in privately negotiated transactions,
or in such other manner as determined by the company. The timing of the repurchases and the actual amount repurchased
will depend on a variety of factors, including the market price of the company’s shares, general market and economic
conditions, and other factors. The stock repurchase program does not obligate the company to acquire any particular
amount of common stock, and it may be suspended or discontinued at any time.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
Capital and Exploratory Expenditures
Capital and exploratory expenditures by business segment for 2021, 2020 and 2019 are as follows:
Millions of dollars
Upstream
Downstream
All Other
U.S.
4,698 $
Int’l.
4,916 $
$
1,235
221
630
20
2021
Total
9,614
1,865
241
2020
2019
U.S.
5,130 $
Int’l.
Total
5,784 $ 10,914
U.S.
8,197 $
Total
Int’l.
9,627 $ 17,824
$
$
1,021
226
1,325
13
2,346
239
1,868
365
920
17
2,788
382
Total
Total, Excluding Equity in Affiliates
$
$
6,154 $
5,787 $
5,566 $ 11,720
8,553
2,766 $
$
$
6,377 $
6,053 $
7,122 $ 13,499
9,517
3,464 $
$ 10,430 $ 10,564 $ 20,994
4,820 $ 14,882
$ 10,062 $
Total reported expenditures for 2021 were $11.7 billion, including $3.2 billion for the company’s share of equity-affiliate
expenditures, which did not require cash outlays by the company. In 2020, expenditures were $13.5 billion, including the
company’s share of affiliates’ expenditures of $4.0 billion. The acquisition of Noble is not included in the company’s
capital and exploratory expenditures.
Of the $11.7 billion of expenditures in 2021, 82 percent, or $9.6 billion, related to upstream activities. Approximately
81 percent was expended for upstream operations in 2020. International upstream accounted for 51 percent of the
worldwide upstream investment in 2021 and 53 percent in 2020.
The company estimates that 2022 organic capital and exploratory expenditures will be approximately $15 billion, including
$3.6 billion of spending by affiliates, an increase of over 25 percent from 2021 expenditures. This includes approximately
$800 million in lower carbon spending that aims to reduce the carbon intensity of the company’s operations and grow its
lower carbon businesses.
In the upstream business, approximately $8 billion is allocated to currently producing assets, including about $3 billion for
Permian Basin unconventional development and approximately $1.5 billion for other shale and tight assets worldwide.
Additionally, $3 billion of the upstream program is planned for major capital projects underway, of which about $2 billion
is associated with the FGP/WPMP at the Tengiz field in Kazakhstan. Finally, approximately $1.5 billion is allocated to
exploration, early-stage development projects, midstream activities and carbon reduction opportunities.
Worldwide downstream spending in 2022 is estimated to be $2.3 billion, including capital targeted to grow renewable fuels
and products businesses. Investments in technology businesses and other corporate operations in 2022 are budgeted at $0.4
billion.
The company monitors crude oil market conditions and can adjust future capital outlays should oil price conditions
deteriorate.
Noncontrolling Interests The company had noncontrolling interests of $873 million at December 31, 2021 and $1.0 billion
at December 31, 2020. Distributions to noncontrolling interests net of contributions totaled $36 million and $24 million in
2021 and 2020, respectively. Included within noncontrolling interests at December 31, 2021 is $135 million of redeemable
noncontrolling interest.
Pension Obligations Information related to pension plan contributions is included in Note 23 Employee Benefit Plans,
under the heading “Cash Contributions and Benefit Payments.”
Contractual Obligations Information related to the company’s significant contractual obligations is included in Note 19
Short-Term Debt, in Note 20 Long-Term Debt and in Note 5 Lease Commitments. The aggregate amount of interest due on
these obligations, excluding leases, is: 2022 – $683; 2023 – $533; 2024 – $447; 2025 – $388; 2026 – $305; after 2026 –
$3,143.
Long-Term Unconditional Purchase Obligations and Commitments, Including Throughput and Take-or-Pay
Agreements Information related to these off-balance sheet matters is included in Note 24 Other Contingencies and
Commitments, under the heading “Long-Term Unconditional Purchase Obligations and Commitments, Including
Throughput and Take-or-Pay Agreements.”
Direct Guarantees Information related to guarantees is included in Note 24 Other Contingencies and Commitments under
the heading “Guarantees.”
Indemnifications Information related to indemnifications is included in Note 24 Other Contingencies and Commitments
under the heading “Indemnifications.”
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Management's Discussion and Analysis of Financial Condition and Results of Operations
Financial Ratios and Metrics
The following represent several metrics the company believes are useful measures to monitor the financial health of the
company and its performance over time:
Current Ratio Current assets divided by current liabilities, which indicates the company’s ability to repay its short-term
liabilities with short-term assets. The current ratio in all periods was adversely affected by the fact that Chevron’s
inventories are valued on a last-in, first-out basis. At year-end 2021, the book value of inventory was lower than
replacement costs, based on average acquisition costs during the year, by approximately $5.6 billion.
Millions of dollars
Current assets
Current liabilities
Current Ratio
2021
At December 31
2019
2020
$
33,738
$
26,078
$
28,329
26,791
1.3
22,183
1.2
26,530
1.1
Interest Coverage Ratio Income before income tax expense, plus interest and debt expense and amortization of capitalized
interest, less net income attributable to noncontrolling interests, divided by before-tax interest costs. This ratio indicates the
company’s ability to pay interest on outstanding debt. The company’s interest coverage ratio in 2021 was higher than 2020
due to higher income.
Millions of dollars
Income (Loss) Before Income Tax Expense
Plus: Interest and debt expense
Plus: Before-tax amortization of capitalized interest
Less: Net income attributable to noncontrolling interests
Subtotal for calculation
Total financing interest and debt costs
Interest Coverage Ratio
2021
Year ended December 31
2019
2020
$
21,639
$
(7,453)
$
5,536
712
215
64
22,502
775
29.0
$
697
205
(18)
(6,533)
735
(8.9)
$
798
240
(79)
6,653
817
8.1
$
Free Cash Flow The cash provided by operating activities less cash capital expenditures, which represents the cash
available to creditors and investors after investing in the business.
Millions of dollars
Net cash provided by operating activities
Less: Capital expenditures
Free Cash Flow
2021
Year ended December 31
2019
2020
$
29,187
$
10,577
$
27,314
8,056
$
21,131
$
8,922
1,655
14,116
$
13,198
Debt Ratio Total debt as a percentage of total debt plus Chevron Corporation Stockholders’ Equity, which indicates the
company’s leverage.
Millions of dollars
Short-term debt
Long-term debt
Total debt
Total Chevron Corporation Stockholders’ Equity
$
2021
256
31,113
31,369
139,067
At December 31
2019
2020
$
1,548
$
3,282
42,767
44,315
131,688
23,691
26,973
144,213
Total debt plus total Chevron Corporation Stockholders’ Equity
$ 170,436
$ 176,003
$ 171,186
Debt Ratio
18.4 %
25.2 %
15.8 %
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Management's Discussion and Analysis of Financial Condition and Results of Operations
Net Debt Ratio Total debt less cash and cash equivalents and marketable securities as a percentage of total debt less cash
and cash equivalents and marketable securities, plus Chevron Corporation Stockholders’ Equity, which indicates the
company’s leverage, net of its cash balances.
Millions of dollars
Short-term debt
Long-term debt
Total Debt
Less: Cash and cash equivalents
Less: Marketable securities
Total adjusted debt
Total Chevron Corporation Stockholders’ Equity
$
2021
256
31,113
31,369
5,640
35
25,694
139,067
At December 31
2019
2020
$
1,548
$
3,282
42,767
44,315
5,596
31
38,688
131,688
23,691
26,973
5,686
63
21,224
144,213
Total adjusted debt plus total Chevron Corporation Stockholders’ Equity
$ 164,761
$ 170,376
$ 165,437
Net Debt Ratio
15.6 %
22.7 %
12.8 %
Capital Employed The sum of Chevron Corporation Stockholders’ Equity, total debt and noncontrolling interests, which
represents the net investment in the business.
Millions of dollars
Chevron Corporation Stockholders’ Equity
Plus: Short-term debt
Plus: Long-term debt
Plus: Noncontrolling interest
Capital Employed at December 31
2021
At December 31
2019
2020
$ 139,067
$ 131,688
$ 144,213
256
31,113
873
1,548
42,767
1,038
3,282
23,691
995
$ 171,309
$ 177,041
$ 172,181
Return on Average Capital Employed (ROCE) Net income attributable to Chevron (adjusted for after-tax interest expense
and noncontrolling interest) divided by average capital employed. Average capital employed is computed by averaging the
sum of capital employed at the beginning and end of the year. ROCE is a ratio intended to measure annual earnings as a
percentage of historical investments in the business.
Millions of dollars
Net income attributable to Chevron
Plus: After-tax interest and debt expense
Plus: Noncontrolling interest
Net income after adjustments
Average capital employed
Return on Average Capital Employed
2021
Year ended December 31
2019
2020
$
15,625
$
(5,543)
$
2,924
662
64
16,351
658
(18)
(4,903)
761
(79)
3,606
$ 174,175
$ 174,611
$ 181,141
9.4 %
(2.8) %
2.0 %
Return on Stockholders’ Equity (ROSE) Net income attributable to Chevron divided by average Chevron Corporation
Stockholders’ Equity. Average stockholders’ equity is computed by averaging the sum of stockholders’ equity at the
beginning and end of the year. ROSE is a ratio intended to measure earnings as a percentage of shareholder investments.
Millions of dollars
Net income attributable to Chevron
Chevron Corporation Stockholders’ Equity at December 31
Average Chevron Corporation Stockholders’ Equity
Return on Average Stockholders’ Equity
2021
Year ended December 31
2019
2020
$
15,625
$
(5,543)
$
2,924
139,067
135,378
131,688
137,951
144,213
149,384
11.5 %
(4.0) %
2.0 %
Financial and Derivative Instrument Market Risk
The market risk associated with the company’s portfolio of financial and derivative instruments is discussed below. The
estimates of financial exposure to market risk do not represent the company’s projection of future market changes. The
actual impact of future market changes could differ materially due to factors discussed elsewhere in this report, including
those set forth under the heading “Risk Factors” in Part I, Item 1A of the company’s Annual Report on Form 10-K.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
Derivative Commodity Instruments Chevron is exposed to market risks related to the price volatility of crude oil, refined
products, natural gas, natural gas liquids, liquefied natural gas and refinery feedstocks. The company uses derivative
commodity instruments to manage these exposures on a portion of its activity, including firm commitments and anticipated
transactions for the purchase, sale and storage of crude oil, refined products, natural gas, natural gas liquids, liquefied
natural gas and feedstock for company refineries. The company also uses derivative commodity instruments for limited
trading purposes. The results of these activities were not material to the company’s financial position, results of operations
or cash flows in 2021.
The company’s market exposure positions are monitored on a daily basis by an internal Risk Control group in accordance
with the company’s risk management policies. The company’s risk management practices and its compliance with policies
are reviewed by the Audit Committee of the company’s Board of Directors.
Derivatives beyond those designated as normal purchase and normal sale contracts are recorded at fair value on the
Consolidated Balance Sheet with resulting gains and losses reflected in income. Fair values are derived principally from
published market quotes and other independent third-party quotes. The change in fair value of Chevron’s derivative
commodity instruments in 2021 was not material to the company’s results of operations.
The company uses the Monte Carlo simulation method as its Value-at-Risk (VaR) model to estimate the maximum
potential loss in fair value, at the 95 percent confidence level with a one-day holding period, from the effect of adverse
changes in market conditions on derivative commodity instruments held or issued. Based on these inputs, the VaR for the
company’s primary risk exposures in the area of derivative commodity instruments at December 31, 2021 and 2020 was
not material to the company’s cash flows or results of operations.
Foreign Currency The company may enter into foreign currency derivative contracts to manage some of its foreign
currency exposures. These exposures include revenue and anticipated purchase transactions, including foreign currency
capital expenditures and lease commitments. The foreign currency derivative contracts, if any, are recorded at fair value on
the balance sheet with resulting gains and losses reflected in income. There were no material open foreign currency
derivative contracts at December 31, 2021.
Interest Rates The company may enter into interest rate swaps from time to time as part of its overall strategy to manage
the interest rate risk on its debt. Interest rate swaps, if any, are recorded at fair value on the balance sheet with resulting
gains and losses reflected in income. At year-end 2021, the company had no interest rate swaps.
Transactions With Related Parties
Chevron enters into a number of business arrangements with related parties, principally its equity affiliates. These
arrangements include long-term supply or offtake agreements and long-term purchase agreements. Refer to “Other
Information” in Note 15 Investments and Advances for further discussion. Management believes these agreements have
been negotiated on terms consistent with those that would have been negotiated with an unrelated party.
Litigation and Other Contingencies
Ecuador Information related to Ecuador matters is included in Note 16 Litigation under the heading “Ecuador.”
Climate Change Information related to climate change-related matters is included in Note 16 Litigation under the heading
“Climate Change.”
Louisiana Information related to Louisiana coastal matters is included in Note 16 Litigation under the heading
“Louisiana.”
Environmental The following table displays the annual changes to the company’s before-tax environmental remediation
reserves, including those for U.S. federal Superfund sites and analogous sites under state laws.
Millions of dollars
Balance at January 1
Net additions
Expenditures
Balance at December 31
$
$
2021
2020
1,139 $
1,234 $
114
(293)
179
(274)
960 $
1,139 $
2019
1,327
200
(293)
1,234
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Management's Discussion and Analysis of Financial Condition and Results of Operations
The company records asset retirement obligations when there is a legal obligation associated with the retirement of long-
lived assets and the liability can be reasonably estimated. These asset retirement obligations include costs related to
environmental issues. The liability balance of approximately $12.8 billion for asset retirement obligations at year-end 2021
is related primarily to upstream properties.
For the company’s other ongoing operating assets, such as refineries and chemicals facilities, no provisions are made for
exit or cleanup costs that may be required when such assets reach the end of their useful lives unless a decision to sell or
otherwise decommission the facility has been made, as the indeterminate settlement dates for the asset retirements prevent
estimation of the fair value of the asset retirement obligation.
Refer to the discussion below for additional information on environmental matters and their impact on Chevron, and on the
company’s 2021 environmental expenditures. Refer to Note 24 Other Contingencies and Commitments under the heading
“Environmental” for additional discussion of environmental remediation provisions and year-end reserves. Refer also to
Note 25 Asset Retirement Obligations for additional discussion of the company’s asset retirement obligations.
Suspended Wells Information related to suspended wells is included in Note 21 Accounting for Suspended Exploratory
Wells.
Income Taxes Information related to income tax contingencies is included in Note 17 Taxes and in Note 24 Other
Contingencies and Commitments under the heading “Income Taxes.”
Other Contingencies Information related to other contingencies is included in Note 24 Other Contingencies and
Commitments under the heading “Other Contingencies.”
Environmental Matters
The company is subject to various international, federal, state and local environmental, health and safety laws, regulations
and market-based programs. These laws, regulations and programs continue to evolve and are expected to increase in both
number and complexity over time and govern not only the manner in which the company conducts its operations, but also
the products it sells. For example, international agreements and national, regional, and state legislation and regulatory
measures that aim to limit or reduce greenhouse gas (GHG) emissions are currently in various stages of implementation.
Consideration of GHG issues and the responses to those issues through international agreements and national, regional or
state legislation or regulations are integrated into the company’s strategy and planning, capital investment reviews and risk
management tools and processes, where applicable. They are also factored into the company’s long-range supply, demand
and energy price forecasts. These forecasts reflect long-range effects from renewable fuel penetration, energy efficiency
standards, climate-related policy actions, and demand response to oil and natural gas prices. In addition, legislation and
regulations intended to address hydraulic fracturing also continue to evolve in many jurisdictions where we operate. Refer
to “Risk Factors” in Part I, Item 1A, on pages 20 through 25 of the company’s Annual Report on Form 10-K for a
discussion of some of the inherent risks of increasingly restrictive environmental and other regulation that could materially
impact the company’s results of operations or financial condition.
Most of the costs of complying with existing laws and regulations pertaining to company operations and products are
embedded in the normal costs of doing business. However, it is not possible to predict with certainty the amount of
additional investments in new or existing technology or facilities or the amounts of increased operating costs to be incurred
in the future to: prevent, control, reduce or eliminate releases of hazardous materials or other pollutants into the
environment; remediate and restore areas damaged by prior releases of hazardous materials; or comply with new
environmental laws or regulations. Although these costs may be significant to the results of operations in any single period,
the company does not presently expect them to have a material adverse effect on the company’s liquidity or financial
position.
Accidental leaks and spills requiring cleanup may occur in the ordinary course of business. The company may incur
expenses for corrective actions at various owned and previously owned facilities and at third-party-owned waste disposal
sites used by the company. An obligation may arise when operations are closed or sold or at non-Chevron sites where
company products have been handled or disposed of. Most of the expenditures to fulfill these obligations relate to facilities
and sites where past operations followed practices and procedures that were considered acceptable at the time but now
require investigative or remedial work or both to meet current standards.
Using definitions and guidelines established by the American Petroleum Institute, Chevron estimated its worldwide
environmental spending in 2021 at approximately $1.9 billion for its consolidated companies. Included in these
expenditures were approximately $0.3 billion of environmental capital expenditures and $1.6 billion of costs associated
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Management's Discussion and Analysis of Financial Condition and Results of Operations
with the prevention, control, abatement or elimination of hazardous substances and pollutants from operating, closed or
divested sites, and the decommissioning and restoration of sites.
For 2022, total worldwide environmental capital expenditures are estimated at $0.5 billion. These capital costs are in
addition to the ongoing costs of complying with environmental regulations and the costs to remediate previously
contaminated sites.
Critical Accounting Estimates and Assumptions
Management makes many estimates and assumptions in the application of accounting principles generally accepted in the
United States of America (GAAP) that may have a material impact on the company’s consolidated financial statements and
related disclosures and on the comparability of such information over different reporting periods. Such estimates and
assumptions affect reported amounts of assets, liabilities, revenues and expenses, as well as disclosures of contingent assets
and liabilities. Estimates and assumptions are based on management’s experience and other information available prior to
the issuance of the financial statements. Materially different results can occur as circumstances change and additional
information becomes known.
The discussion in this section of “critical” accounting estimates and assumptions is according to the disclosure guidelines
of the SEC, wherein:
1.
2.
the nature of the estimates and assumptions is material due to the levels of subjectivity and judgment
necessary to account for highly uncertain matters, or the susceptibility of such matters to change; and
the impact of the estimates and assumptions on the company’s financial condition or operating performance is
material.
The development and selection of accounting estimates and assumptions, including those deemed “critical,” and the
associated disclosures in this discussion have been discussed by management with the Audit Committee of the Board of
Directors. The areas of accounting and the associated “critical” estimates and assumptions made by the company are as
follows:
Oil and Gas Reserves Crude oil and natural gas reserves are estimates of future production that impact certain asset and
expense accounts included in the Consolidated Financial Statements. Proved reserves are the estimated quantities of oil and
gas that geoscience and engineering data demonstrate with reasonable certainty to be economically producible in the future
under existing economic conditions, operating methods and government regulations. Proved reserves include both
developed and undeveloped volumes. Proved developed reserves represent volumes expected to be recovered through
existing wells with existing equipment and operating methods. Proved undeveloped reserves are volumes expected to be
recovered from new wells on undrilled proved acreage, or from existing wells where a relatively major expenditure is
required for recompletion. Variables impacting Chevron’s estimated volumes of crude oil and natural gas reserves include
field performance, available technology, commodity prices, and development, production and carbon costs.
The estimates of crude oil and natural gas reserves are important to the timing of expense recognition for costs incurred and
to the valuation of certain oil and gas producing assets. Impacts of oil and gas reserves on Chevron’s Consolidated
Financial Statements, using the successful efforts method of accounting, include the following:
1. Amortization - Capitalized exploratory drilling and development costs are depreciated on a unit-of-production
(UOP) basis using proved developed reserves. Acquisition costs of proved properties are amortized on a UOP
basis using total proved reserves. During 2021, Chevron’s UOP Depreciation, Depletion and Amortization
(DD&A) for oil and gas properties was $13.7 billion, and proved developed reserves at the beginning of 2021
were 6.9 billion barrels for consolidated companies. If the estimates of proved reserves used in the UOP
calculations for consolidated operations had been lower by five percent across all oil and gas properties, UOP
DD&A in 2021 would have increased by approximately $700 million.
2.
Impairment - Oil and gas reserves are used in assessing oil and gas producing properties for impairment. A
significant reduction in the estimated reserves of a property would trigger an impairment review. Proved
reserves (and, in some cases, a portion of unproved resources) are used to estimate future production volumes
in the cash flow model. For a further discussion of estimates and assumptions used in impairment
assessments, see Impairment of Properties, Plant and Equipment and Investments in Affiliates below.
Refer to Table V, “Reserve Quantity Information,”, for the changes in proved reserve estimates for the three years ended
December 31, 2021, and to Table VII, “Changes in the Standardized Measure of Discounted Future Net Cash Flows From
Proved Reserves” for estimates of proved reserve values for each of the three years ended December 31, 2021.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
This Oil and Gas Reserves commentary should be read in conjunction with the Properties, Plant and Equipment section of
Note 1 Summary of Significant Accounting Policies, which includes a description of the “successful efforts” method of
accounting for oil and gas exploration and production activities.
Impairment of Properties, Plant and Equipment and Investments in Affiliates The company assesses its properties, plant
and equipment (PP&E) for possible impairment whenever events or changes in circumstances indicate that the carrying
value of the assets may not be recoverable. If the carrying value of an asset exceeds the future undiscounted cash flows
expected from the asset, an impairment charge is recorded for the excess of the carrying value of the asset over its
estimated fair value.
Determination as to whether and how much an asset is impaired involves management estimates on highly uncertain
matters, such as future commodity prices, operating expenses, carbon costs, production profiles, the pace of the energy
transition, and the outlook for global or regional market supply-and-demand conditions for crude oil, natural gas,
commodity chemicals and refined products. However, the impairment reviews and calculations are based on assumptions
that are generally consistent with the company’s business plans and long-term investment decisions. Refer also to the
discussion of impairments of properties, plant and equipment in Note 18 Properties, Plant and Equipment and to the section
on Properties, Plant and Equipment in Note 1 Summary of Significant Accounting Policies.
The company performs impairment assessments when triggering events arise to determine whether any write-down in the
carrying value of an asset or asset group is required. For example, when significant downward revisions to crude oil and
natural gas reserves are made for any single field or concession, an impairment review is performed to determine if the
carrying value of the asset remains recoverable. Similarly, a significant downward revision in the company’s crude oil or
natural gas price outlook would trigger impairment reviews for impacted upstream assets. In addition, impairments could
occur due to changes in national, state or local environmental regulations or laws, including those designed to stop or
impede the development or production of oil and gas. Also, if the expectation of sale of a particular asset or asset group in
any period has been deemed more likely than not, an impairment review is performed, and if the estimated net proceeds
exceed the carrying value of the asset or asset group, no impairment charge is required. Such calculations are reviewed
each period until the asset or asset group is disposed. Assets that are not impaired on a held-and-used basis could possibly
become impaired if a decision is made to sell such assets. That is, the assets would be impaired if they are classified as
held-for-sale and the estimated proceeds from the sale, less costs to sell, are less than the assets’ associated carrying values.
Investments in common stock of affiliates that are accounted for under the equity method, as well as investments in other
securities of these equity investees, are reviewed for impairment when the fair value of the investment falls below the
company’s carrying value. When this occurs, a determination must be made as to whether this loss is other-than-temporary,
in which case the investment is impaired. Because of the number of differing assumptions potentially affecting whether an
investment is impaired in any period or the amount of the impairment, a sensitivity analysis is not practicable.
A sensitivity analysis of the impact on earnings for these periods if other assumptions had been used in impairment reviews
and impairment calculations is not practicable, given the broad range of the company’s PP&E and the number of
assumptions involved in the estimates. That is, favorable changes to some assumptions might have avoided the need to
impair any assets in these periods, whereas unfavorable changes might have caused an additional unknown number of other
assets to become impaired, or resulted in larger impacts on impaired assets.
Asset Retirement Obligations In the determination of fair value for an asset retirement obligation (ARO), the company
uses various assumptions and judgments, including such factors as the existence of a legal obligation, estimated amounts
and timing of settlements, discount and inflation rates, and the expected impact of advances in technology and process
improvements. A sensitivity analysis of the ARO impact on earnings for 2021 is not practicable, given the broad range of
the company’s long-lived assets and the number of assumptions involved in the estimates. That is, favorable changes to
some assumptions would have reduced estimated future obligations, thereby lowering accretion expense and amortization
costs, whereas unfavorable changes would have the opposite effect. Refer to Note 25 Asset Retirement Obligations for
additional discussions on asset retirement obligations.
Pension and Other Postretirement Benefit Plans Note 23 Employee Benefit Plans includes information on the funded
status of the company’s pension and other postretirement benefit (OPEB) plans reflected on the Consolidated Balance
Sheet; the components of pension and OPEB expense reflected on the Consolidated Statement of Income; and the related
underlying assumptions.
The determination of pension plan expense and obligations is based on a number of actuarial assumptions. Two critical
assumptions are the expected long-term rate of return on plan assets and the discount rate applied to pension plan
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Management's Discussion and Analysis of Financial Condition and Results of Operations
obligations. Critical assumptions in determining expense and obligations for OPEB plans, which provide for certain health
care and life insurance benefits for qualifying retired employees and which are not funded, are the discount rate and the
assumed health care cost-trend rates. Information related to the company’s processes to develop these assumptions is
included in Note 23 Employee Benefit Plans under the relevant headings. Actual rates may vary significantly from
estimates because of unanticipated changes beyond the company’s control.
For 2021, the company used an expected long-term rate of return of 6.5 percent and a discount rate for service costs of 3.0
percent and a discount rate for interest cost of 1.9 percent for the primary U.S. pension plan. The actual return for 2021 was
11.2 percent. For the 10 years ended December 31, 2021, actual asset returns averaged 9.8 percent for this plan.
Additionally, with the exception of two years within this 10-year period, actual asset returns for this plan equaled or
exceeded 6.5 percent during each year.
Total pension expense for 2021 was $1.2 billion. An increase in the expected long-term return on plan assets or the
discount rate would reduce pension plan expense, and vice versa. As an indication of the sensitivity of pension expense to
the long-term rate of return assumption, a 1 percent increase in this assumption for the company’s primary U.S. pension
plan, which accounted for about 67 percent of companywide pension expense, would have reduced total pension plan
expense for 2021 by approximately $81 million. A 1 percent increase in the discount rates for this same plan would have
reduced pension expense for 2021 by approximately $357 million.
The aggregate funded status recognized at December 31, 2021, was a net liability of approximately $3.4 billion. An
increase in the discount rate would decrease the pension obligation, thus changing the funded status of a plan. At December
31, 2021, the company used a discount rate of 2.8 percent to measure the obligations for the primary U.S. pension plan. As
an indication of the sensitivity of pension liabilities to the discount rate assumption, a 0.25 percent increase in the discount
rate applied to the company’s primary U.S. pension plan, which accounted for about 60 percent of the companywide
pension obligation, would have reduced the plan obligation by approximately $425 million, and would have decreased the
plan’s underfunded status from approximately $1.2 billion to $800 million.
For the company’s OPEB plans, expense for 2021 was $85 million, and the total liability, all unfunded at the end of 2021,
was $2.5 billion. For the primary U.S. OPEB plan, the company used a discount rate for service cost of 2.9 percent and a
discount rate for interest cost of 1.6 percent to measure expense in 2021, and a 2.8 percent discount rate to measure the
benefit obligations at December 31, 2021. Discount rate changes, similar to those used in the pension sensitivity analysis,
resulted in an immaterial impact on 2021 OPEB expense and OPEB liabilities at the end of 2021.
Differences between the various assumptions used to determine expense and the funded status of each plan and actual
experience are included in actuarial gain/loss. Refer to page 88 in Note 23 Employee Benefit Plans for more information on
the $5.1 billion of before-tax actuarial losses recorded by the company as of December 31, 2021. In addition, information
related to company contributions is included on page 91 in Note 23 Employee Benefit Plans under the heading “Cash
Contributions and Benefit Payments.”
Contingent Losses Management also makes judgments and estimates in recording liabilities for claims, litigation, tax
matters and environmental remediation. Actual costs can frequently vary from estimates for a variety of reasons. For
example, the costs for settlement of claims and litigation can vary from estimates based on differing interpretations of laws,
opinions on culpability and assessments on the amount of damages. Similarly, liabilities for environmental remediation are
subject to change because of changes in laws, regulations and their interpretation, the determination of additional
information on the extent and nature of site contamination, and improvements in technology.
Under the accounting rules, a liability is generally recorded for these types of contingencies if management determines the
loss to be both probable and estimable. The company generally reports these losses as “Operating expenses” or “Selling,
general and administrative expenses” on the Consolidated Statement of Income. An exception to this handling is for
income tax matters, for which benefits are recognized only if management determines the tax position is “more likely than
not” (i.e., likelihood greater than 50 percent) to be allowed by the tax jurisdiction. For additional discussion of income tax
uncertainties, refer to Note 24 Other Contingencies and Commitments under the heading Income Taxes. Refer also to the
business segment discussions elsewhere in this section for the effect on earnings from losses associated with certain
litigation, environmental remediation and tax matters for the three years ended December 31, 2021.
An estimate as to the sensitivity to earnings for these periods if other assumptions had been used in recording these
liabilities is not practicable because of the number of contingencies that must be assessed, the number of underlying
assumptions and the wide range of reasonably possible outcomes, both in terms of the probability of loss and the estimates
of such loss. For further information, refer to “Changes in management’s estimates and assumptions may have a material
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Management's Discussion and Analysis of Financial Condition and Results of Operations
impact on the company’s consolidated financial statements and financial or operational performance in any given period”
in “Risk Factors” in Part I, Item 1A, on pages 24 and 25 of the company’s Annual Report on Form 10-K.
New Accounting Standards
Refer to Note 4 New Accounting Standards for information regarding new accounting standards.
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Quarterly Results
Unaudited
Millions of dollars, except per-share amounts
4th Q
3rd Q
2nd Q
2021
1st Q
4th Q
3rd Q
2nd Q
2020
1st Q
Revenues and Other Income
Sales and other operating revenues
Income from equity affiliates
Other income
Total Revenues and Other Income
Costs and Other Deductions
Purchased crude oil and products
Operating expenses
$ 45,861 $ 42,552 $ 36,117 $ 31,076 $ 24,843 $ 23,997 $ 15,926 $ 29,705
1,657
1,647
1,442
611
511
38
911
42
568
(165)
510
(2,515)
(56)
83
965
831
48,129
44,710
37,597
32,029
25,246
24,451
13,494
31,501
27,341
23,834
20,629
17,568
13,387
13,448
8,144
15,509
5,507
5,353
4,899
4,967
4,898
4,604
5,530
5,291
Selling, general and administrative expenses
1,271
657
1,096
990
1,129
832
1,569
Exploration expenses
192
158
113
86
367
117
895
683
158
Depreciation, depletion and amortization
4,813
4,304
4,522
4,286
4,486
4,017
6,717
4,288
Taxes other than on income
Interest and debt expense
Other components of net periodic benefit costs
1,779
2,075
1,566
1,420
1,276
1,091
965
1,167
155
86
174
100
185
165
198
337
199
461
164
222
172
99
162
98
Total Costs and Other Deductions
41,144
36,655
33,175
29,852
26,203
24,495
24,091
27,356
Income (Loss) Before Income Tax Expense
6,985
8,055
4,422
2,177
1,903
1,940
1,328
779
(957)
(301)
(44)
(10,597)
4,145
165
(2,320)
564
$ 5,082 $ 6,115 $ 3,094 $ 1,398 $
(656) $
(209) $ (8,277) $ 3,581
Income Tax Expense (Benefit)
Net Income (Loss)
Less: Net income attributable to noncontrolling interests
27
4
12
21
9
(2)
(7)
(18)
Net Income (Loss) Attributable to Chevron Corporation
$ 5,055 $ 6,111 $ 3,082 $ 1,377 $
(665) $
(207) $ (8,270) $ 3,599
Per Share of Common Stock
Net Income (Loss) Attributable to Chevron Corporation
– Basic
– Diluted
Dividends per share
$ 2.63 $ 3.19 $ 1.61 $ 0.72 $ (0.33) $ (0.12) $ (4.44) $ 1.93
$ 2.63 $ 3.19 $ 1.60 $ 0.72 $ (0.33) $ (0.12) $ (4.44) $ 1.93
$ 1.34 $ 1.34 $ 1.34 $ 1.29 $ 1.29 $ 1.29 $ 1.29 $ 1.29
Chevron Corporation 2021 Annual Report
54
54
Millions of dollars, except per-share amounts
4th Q
3rd Q
2nd Q
4th Q
3rd Q
2nd Q
2020
1st Q
2019
1st Q
Quarterly Results
Unaudited
Revenues and Other Income
Sales and other operating revenues
Income from equity affiliates
Other income
Total Revenues and Other Income
Costs and Other Deductions
Purchased crude oil and products
Operating expenses
Selling, general and administrative expenses
Exploration expenses
Depreciation, depletion and amortization
Taxes other than on income
Interest and debt expense
Other components of net periodic benefit costs
$ 24,843
$ 23,997
$ 15,926
$ 29,705
$ 34,574
$ 34,779
$ 36,323
$ 34,189
568
(165)
510
(56)
(2,515)
83
965
831
538
1,238
1,172
165
1,196
1,331
1,062
(51)
25,246
24,451
13,494
31,501
36,350
36,116
38,850
35,200
13,387
4,898
1,129
367
4,486
1,276
199
461
13,448
4,604
832
117
4,017
1,091
164
222
8,144
5,530
1,569
895
6,717
965
172
99
15,509
5,291
683
158
4,288
1,167
162
98
19,693
19,882
20,835
19,703
5,987
1,129
272
16,429
969
178
98
5,325
954
168
4,361
1,059
197
121
5,187
1,076
141
4,334
1,047
198
97
4,886
984
189
4,094
1,061
225
101
Total Costs and Other Deductions
26,203
24,495
24,091
27,356
44,755
32,067
32,915
31,243
Income (Loss) Before Income Tax Expense
Income Tax Expense (Benefit)
(957)
(301)
(44)
165
(10,597)
(2,320)
4,145
564
(8,405)
(1,738)
4,049
1,469
5,935
1,645
3,957
1,315
Net Income (Loss)
$
(656) $
(209) $ (8,277) $ 3,581
$ (6,667) $ 2,580
$ 4,290
$ 2,642
Less: Net income attributable to noncontrolling interests
9
(2)
(7)
(18)
(57)
—
(15)
(7)
Net Income (Loss) Attributable to Chevron Corporation
$
(665) $
(207) $ (8,270) $ 3,599
$ (6,610) $ 2,580
$ 4,305
$ 2,649
Per Share of Common Stock
Net Income (Loss) Attributable to Chevron
Corporation
– Basic
– Diluted
Dividends per share
$
1.29
$
1.29
$
1.29
$
1.29
$
1.19
$
1.19
$ (0.33) $ (0.12) $
(4.44) $
$ (0.33) $ (0.12) $
(4.44) $
1.93
1.93
$ (3.51) $
$ (3.51) $
1.38
1.36
$
$
$
2.28
2.27
1.19
$
$
$
1.40
1.39
1.19
Management’s Responsibility for Financial Statements
To the Stockholders of Chevron Corporation
To the Stockholders of Chevron Corporation
Management’s Responsibility for Financial Statements
Management of Chevron Corporation is responsible for preparing the accompanying consolidated financial statements
and the related information appearing in this report. The statements were prepared in accordance with accounting
principles generally accepted in the United States of America and fairly represent the transactions and financial
position of the company. The financial statements include amounts that are based on management’s best estimates and
judgments.
Management of Chevron Corporation is responsible for preparing the accompanying consolidated financial statements and
the related information appearing in this report. The statements were prepared in accordance with accounting principles
generally accepted in the United States of America and fairly represent the transactions and financial position of the
company. The financial statements include amounts that are based on management’s best estimates and judgments.
As stated in its report included herein, the independent registered public accounting firm of PricewaterhouseCoopers
LLP has audited the company’s consolidated financial statements in accordance with the standards of the Public
Company Accounting Oversight Board (United States).
As stated in its report included herein, the independent registered public accounting firm of PricewaterhouseCoopers LLP
has audited the company’s consolidated financial statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States).
The Board of Directors of Chevron has an Audit Committee composed of directors who are not officers or employees
of the company. The Audit Committee meets regularly with members of management, the internal auditors and the
independent registered public accounting firm to review accounting, internal control, auditing and financial reporting
matters. Both the internal auditors and the independent registered public accounting firm have free and direct access to
the Audit Committee without the presence of management.
The Board of Directors of Chevron has an Audit Committee composed of directors who are not officers or employees of
the company. The Audit Committee meets regularly with members of management, the internal auditors and the
independent registered public accounting firm to review accounting, internal control, auditing and financial reporting
matters. Both the internal auditors and the independent registered public accounting firm have free and direct access to the
Audit Committee without the presence of management.
The company’s management has evaluated, with the participation of the Chief Executive Officer and Chief Financial
Officer, the effectiveness of the company’s disclosure controls and procedures (as defined in the Exchange Act Rules
13a-15(e) and 15d-15(e)) as of December 31, 2021. Based on that evaluation, management concluded that the
company’s disclosure controls are effective in ensuring that information required to be recorded, processed,
summarized and reported, are done within the time periods specified in the U.S. Securities and Exchange
Commission’s rules and forms.
The company’s management has evaluated, with the participation of the Chief Executive Officer and Chief Financial
Officer, the effectiveness of the company’s disclosure controls and procedures (as defined in the Exchange Act Rules
13a-15(e) and 15d-15(e)) as of December 31, 2020. Based on that evaluation, management concluded that the company’s
disclosure controls are effective in ensuring that information required to be recorded, processed, summarized and
reported, are done within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms.
Management’s Report on Internal Control Over Financial Reporting
The company’s management is responsible for establishing and maintaining adequate internal control over financial
reporting, as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f). The company’s management, including the
Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the company’s
internal control over financial reporting based on the Internal Control – Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the results of this
evaluation, the company’s management concluded that internal control over financial reporting was effective as of
December 31, 2021.
The company’s management is responsible for establishing and maintaining adequate internal control over financial
reporting, as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f). The company’s management, including the
Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the company’s
internal control over financial reporting based on the Internal Control – Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the results of this evaluation,
the company’s management concluded that internal control over financial reporting was effective as of December 31,
2020.
The effectiveness of the company’s internal control over financial reporting as of December 31, 2021, has been
audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in its report
included herein.
The company excluded Noble from our assessment of internal control over financial reporting as of December 31, 2020
because it was acquired by the company in a business combination during 2020. Total assets and total revenues of Noble,
a wholly-owned subsidiary, represent eight percent and one percent, respectively, of the related consolidated financial
statement amounts as of and for the year ended December 31, 2020.
Management’s Report on Internal Control Over Financial Reporting
The effectiveness of the company’s internal control over financial reporting as of December 31, 2020, has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in its report included herein.
Michael K. Wirth
Michael K. Wirth
Chairman of the Board
and Chief Executive Officer
Chairman of the Board
and Chief Executive Officer
February 25, 2021
February 24, 2022
Pierre R. Breber
Pierre R. Breber
Vice President
and Chief Financial Officer
Vice President
and Chief Financial Officer
David A. Inchausti
David A. Inchausti
Vice President
and Controller
Vice President
and Controller
54
Chevron Corporation 2021 Annual Report
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55
Chevron Corporation 2020 Annual Report
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55
55
55
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3/12/21 4:55 PM
3/12/21 4:55 PM
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Chevron Corporation
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheet of Chevron Corporation and its subsidiaries (the
“Company”) as of December 31, 2021 and 2020, and the related consolidated statements of income, of comprehensive
income, of equity and of cash flows for each of the three years in the period ended December 31, 2021, including the
related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's
internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control -
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2021 in conformity with accounting principles
generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in
Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective
internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial
reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our
responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal
control over financial reporting based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities
and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of
material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was
maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements. Our audit of internal control over financial reporting included obtaining an understanding of
internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide
a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on
the financial statements.
Chevron Corporation 2021 Annual Report
56
56
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that (i) relates
to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially
challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way
our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical
audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it
relates.
The Impact of Proved Crude Oil and Natural Gas Reserves on Upstream Property, Plant, and Equipment, Net
As described in Notes 1 and 18 to the consolidated financial statements, the Company’s upstream property, plant and
equipment, net balance was $130.8 billion as of December 31, 2021, and depreciation, depletion and amortization
expense was $16.5 billion for the year ended December 31, 2021. The Company follows the successful efforts method
of accounting for crude oil and natural gas exploration and production activities. Depreciation and depletion of all
capitalized costs of proved crude oil and natural gas producing properties, except mineral interests, are expensed using
the unit-of-production method, generally by individual field, as the proved developed reserves are produced. Depletion
expenses for capitalized costs of proved mineral interests are recognized using the unit-of-production method by
individual field as the related proved reserves are produced. As disclosed by management, variables impacting the
Company’s estimated volumes of crude oil and natural gas reserves include field performance, available technology,
commodity prices, and development, production and carbon costs. Reserves are estimated by Company asset teams
composed of earth scientists and engineers. As part of the internal control process related to reserves estimation, the
Company maintains a Reserves Advisory Committee (RAC) (the Company’s earth scientists, engineers and RAC are
collectively referred to as “management’s specialists”).
The principal considerations for our determination that performing procedures relating to the impact of proved crude oil
and natural gas reserves on upstream property, plant, and equipment, net is a critical audit matter are (i) the significant
judgment by management, including the use of management’s specialists, when developing the estimates of proved
crude oil and natural gas reserve volumes, which in turn led to (ii) a high degree of auditor judgment, subjectivity, and
effort in performing procedures and evaluating audit evidence obtained related to the data, methods and assumptions
used by management and its specialists in developing the estimates of proved crude oil and natural gas reserve volumes.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our
overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls
relating to management’s estimates of proved crude oil and natural gas reserve volumes. The work of management’s
specialists was used in performing the procedures to evaluate the reasonableness of the proved crude oil and natural gas
reserve volumes. As a basis for using this work, the specialists’ qualifications were understood and the Company’s
relationship with the specialists was assessed. The procedures performed also included evaluation of the methods and
assumptions used by the specialists, tests of the data used by the specialists and an evaluation of the specialists’
findings.
San Francisco, California
February 24, 2022
We have served as the Company’s auditor since 1935.
Chevron Corporation 2021 Annual Report
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57
Consolidated Statement of Income
Millions of dollars, except per-share amounts
Revenues and Other Income
Sales and other operating revenues
Income (loss) from equity affiliates
Other income
Total Revenues and Other Income
Costs and Other Deductions
Purchased crude oil and products
Operating expenses
Selling, general and administrative expenses
Exploration expenses
Depreciation, depletion and amortization
Taxes other than on income
Interest and debt expense
Other components of net periodic benefit costs
Total Costs and Other Deductions
Income (Loss) Before Income Tax Expense
Income Tax Expense (Benefit)
Net Income (Loss)
Less: Net income (loss) attributable to noncontrolling interests
Net Income (Loss) Attributable to Chevron Corporation
Per Share of Common Stock
Net Income (Loss) Attributable to Chevron Corporation
- Basic
- Diluted
See accompanying Notes to the Consolidated Financial Statements.
2021
Year ended December 31
2019
2020
$
$ 155,606
5,657
1,202
162,465
94,471 $ 139,865
3,968
2,683
146,516
(472)
693
94,692
89,372
20,726
4,014
549
17,925
6,840
712
688
140,826
21,639
5,950
15,689
64
15,625
8.15
8.14
$
$
$
50,488
20,323
4,213
1,537
19,508
4,499
697
880
102,145
(7,453)
(1,892)
(5,561)
(18)
(5,543) $
80,113
21,385
4,143
770
29,218
4,136
798
417
140,980
5,536
2,691
2,845
(79)
2,924
(2.96) $
(2.96) $
1.55
1.54
$
$
$
Chevron Corporation 2021 Annual Report
58
58
Consolidated Statement of Comprehensive Income
Millions of dollars
Net Income (Loss)
Currency translation adjustment
Unrealized net change arising during period
Unrealized holding gain (loss) on securities
Net gain (loss) arising during period
Derivatives
Net derivatives loss on hedge transactions
Reclassification to net income
Income taxes on derivatives transactions
Total
Defined benefit plans
Actuarial gain (loss)
Amortization to net income of net actuarial loss and settlements
Actuarial gain (loss) arising during period
Prior service credits (cost)
Amortization to net income of net prior service costs and curtailments
Prior service (costs) credits arising during period
Defined benefit plans sponsored by equity affiliates - benefit (cost)
Income tax benefit (cost) on defined benefit plans
Total
Other Comprehensive Gain (Loss), Net of Tax
Comprehensive Income
Comprehensive loss (income) attributable to noncontrolling interests
Comprehensive Income (Loss) Attributable to Chevron Corporation
See accompanying Notes to the Consolidated Financial Statements.
Year ended December 31
2019
2020
2021
$
15,689
$
(5,561) $
2,845
(55)
(1)
(6)
6
—
—
1,069
1,244
(14)
—
127
(647)
1,779
1,723
17,412
(64)
17,348
$
35
(2)
—
—
—
—
(18)
2
(1)
—
3
2
1,107
(2,004)
519
(2,404)
(23)
—
(104)
369
(655)
(622)
(6,183)
18
(6,165) $
$
4
(28)
(33)
510
(1,432)
(1,446)
1,399
79
1,478
Chevron Corporation 2021 Annual Report
59
59
Consolidated Balance Sheet
Millions of dollars, except per-share amounts
Assets
Cash and cash equivalents
Marketable securities
Accounts and notes receivable (less allowance: 2021 - $303; 2020 - $284)
Inventories:
Crude oil and petroleum products
Chemicals
Materials, supplies and other
Total inventories
Prepaid expenses and other current assets
Total Current Assets
Long-term receivables, net (less allowances: 2021 - $442; 2020 - $387)
Investments and advances
Properties, plant and equipment, at cost
Less: Accumulated depreciation, depletion and amortization
Properties, plant and equipment, net
Deferred charges and other assets
Goodwill
Assets held for sale
Total Assets
Liabilities and Equity
Short-term debt
Accounts payable
Accrued liabilities
Federal and other taxes on income
Other taxes payable
Total Current Liabilities
Long-term debt1
Deferred credits and other noncurrent obligations
Noncurrent deferred income taxes
Noncurrent employee benefit plans
Total Liabilities2
Preferred stock (authorized 100,000,000 shares; $1.00 par value; none issued)
Common stock (authorized 6,000,000,000 shares; $0.75 par value; 2,442,676,580 shares
issued at December 31,2021 and 2020)
Capital in excess of par value
Retained earnings
Accumulated other comprehensive losses
Deferred compensation and benefit plan trust
Treasury stock, at cost (2021 - 512,870,523 shares; 2020 - 517,490,263 shares)
Total Chevron Corporation Stockholders’ Equity
Noncontrolling interests (includes redeemable noncontrolling interest of $135 and $120 at December
31, 2021 and 2020)
Total Equity
Total Liabilities and Equity
1 Includes finance lease liabilities of $449 and $447 at December 31, 2021 and 2020, respectively.
2 Refer to Note 24 Other Contingencies and Commitments.
See accompanying Notes to the Consolidated Financial Statements.
Chevron Corporation 2021 Annual Report
60
60
At December 31
2020
2021
$
5,640 $
35
18,419
5,596
31
11,471
4,248
565
1,492
6,305
3,339
33,738
603
40,696
336,045
189,084
146,961
12,384
4,385
768
3,576
457
1,643
5,676
3,304
26,078
589
39,052
345,232
188,614
156,618
11,950
4,402
1,101
$ 239,535 $ 239,790
$
$
256 $
16,454
6,972
1,700
1,409
26,791
31,113
20,778
14,665
6,248
1,548
10,950
7,812
921
952
22,183
42,767
20,328
12,569
9,217
99,595 $ 107,064
—
—
1,832
17,282
165,546
(3,889)
(240)
(41,464)
139,067
1,832
16,829
160,377
(5,612)
(240)
(41,498)
131,688
873
139,940
1,038
132,726
$ 239,535 $ 239,790
Consolidated Statement of Cash Flows
Millions of dollars
Operating Activities
Net Income (Loss)
Adjustments
Depreciation, depletion and amortization
Dry hole expense
Distributions more (less) than income from equity affiliates
Net before-tax gains on asset retirements and sales
Net foreign currency effects
Deferred income tax provision
Net decrease (increase) in operating working capital
Decrease (increase) in long-term receivables
Net decrease (increase) in other deferred charges
Cash contributions to employee pension plans
Other
Net Cash Provided by Operating Activities
Investing Activities
Cash acquired from Noble Energy, Inc.
Capital expenditures
Proceeds and deposits related to asset sales and returns of investment
Net maturities of (investments in) time deposits
Net sales (purchases) of marketable securities
Net repayment (borrowing) of loans by equity affiliates
Net Cash Used for Investing Activities
Financing Activities
Net borrowings (repayments) of short-term obligations
Proceeds from issuances of long-term debt
Repayments of long-term debt and other financing obligations
Cash dividends - common stock
Net contributions from (distributions to) noncontrolling interests
Net sales (purchases) of treasury shares
Net Cash Provided by (Used for) Financing Activities
Year ended December 31
2019
2020
2021
$
15,689 $
(5,561) $
2,845
17,925
118
(1,998)
(1,021)
(7)
700
(1,361)
21
(320)
(1,751)
1,192
29,187
—
(8,056)
1,791
—
(1)
401
(5,865)
(5,572)
—
(7,364)
(10,179)
(36)
38
(23,113)
19,508
1,036
2,015
(760)
619
(3,604)
(1,652)
296
(248)
(1,213)
141
10,577
373
(8,922)
2,968
—
35
(1,419)
(6,965)
651
12,308
(5,489)
(9,651)
(24)
(1,531)
(3,736)
29,218
172
(2,073)
(1,367)
272
(1,966)
1,494
502
(69)
(1,362)
(352)
27,314
—
(14,116)
2,951
950
2
(1,245)
(11,458)
(2,821)
—
(5,025)
(8,959)
(18)
(2,935)
(19,758)
332
(3,570)
10,481
6,911
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash
Net Change in Cash, Cash Equivalents and Restricted Cash
Cash, Cash Equivalents and Restricted Cash at January 1
Cash, Cash Equivalents and Restricted Cash at December 31
$
(151)
58
6,737
6,795 $
(50)
(174)
6,911
6,737 $
See accompanying Notes to the Consolidated Financial Statements.
Chevron Corporation 2021 Annual Report
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61
Consolidated Statement of Equity
Amounts in millions of dollars
Common
Stock1
Acc. Other
Retained Comprehensive
Income (Loss)
Earnings
Treasury Chevron Corp.
Stockholders’
Equity
Stock
(at cost)
Noncontrolling
Interests
Total
Equity
Balance at December 31, 2018
$
18,704 $
180,987 $
(3,544) $
(41,593) $
154,554
$
1,088
$
155,642
Treasury stock transactions
Net income (loss)
Cash dividends ($4.76 per share)
Stock dividends
Other comprehensive income
Purchases of treasury shares
Issuances of treasury shares
Other changes, net
153
—
—
—
—
—
—
—
—
2,924
(8,959)
(3)
—
—
—
(4)
—
—
—
—
(1,446)
—
—
—
—
—
—
—
—
(4,039)
1,033
—
153
2,924
(8,959)
(3)
(1,446)
(4,039)
1,033
(4)
—
(79)
(18)
—
—
—
—
4
153
2,845
(8,977)
(3)
(1,446)
(4,039)
1,033
—
Balance at December 31, 2019
$
18,857 $
174,945 $
(4,990) $
(44,599) $
144,213
$
995
$
145,208
Treasury stock transactions
Noble Acquisition2
Net income (loss)
Cash dividends ($5.16 per share)
Stock dividends
Other comprehensive income
Purchases of treasury shares
Issuances of treasury shares
Other changes, net
84
(520)
—
—
—
—
—
—
—
—
—
(5,543)
(9,651)
(5)
—
—
—
631
—
—
—
—
—
(622)
—
—
—
—
4,629
—
—
—
—
84
4,109
(5,543)
(9,651)
(5)
(622)
(1,757)
(1,757)
229
—
229
631
—
779
(18)
(24)
—
—
—
—
(694)
84
4,888
(5,561)
(9,675)
(5)
(622)
(1,757)
229
(63)
Balance at December 31, 2020
$
18,421 $
160,377 $
(5,612) $
(41,498) $
131,688
$
1,038
$
132,726
Treasury stock transactions
NBLX Acquisition
Net income (loss)
Cash dividends ($5.31 per share)
Stock dividends
Other comprehensive income
Purchases of treasury shares
Issuances of treasury shares
Other changes, net
315
138
—
—
—
—
—
—
—
—
(148)
15,625
(10,179)
(3)
—
—
—
(126)
—
—
—
—
—
1,723
—
—
—
—
377
—
—
—
—
(1,383)
1,040
—
315
367
15,625
(10,179)
(3)
1,723
(1,383)
1,040
(126)
—
(321)
64
(53)
—
—
—
—
145
315
46
15,689
(10,232)
(3)
1,723
(1,383)
1,040
19
Balance at December 31, 2021
$
18,874 $
165,546 $
(3,889) $
(41,464) $
139,067
$
873
$
139,940
Balance at December 31, 2018
Purchases
Issuances
Issued3
2,442,676,580
—
—
Balance at December 31, 2019
2,442,676,580
Purchases
Issuances
—
—
Balance at December 31, 2020
2,442,676,580
Purchases
Issuances
—
—
Common Stock Share Activity
Treasury
(539,838,890)
(33,955,300)
13,285,711
(560,508,479)
(17,577,457)
60,595,673
(517,490,263)
(13,015,737)
17,635,477
Outstanding
1,902,837,690
(33,955,300)
13,285,711
1,882,168,101
(17,577,457)
60,595,673
1,925,186,317
(13,015,737)
17,635,477
Balance at December 31, 2021
1 Beginning and ending balances for all periods include capital in excess of par, common stock issued at par for $1,832, and $(240) associated with Chevron’s Benefit Plan
1,929,806,057
2,442,676,580
(512,870,523)
Trust. Changes reflect capital in excess of par.
2 Includes $120 redeemable noncontrolling interest.
3 Beginning and ending total issued share balances include 14,168,000 shares associated with Chevron’s Benefit Plan Trust.
See accompanying Notes to the Consolidated Financial Statements.
Chevron Corporation 2021 Annual Report
62
62
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
Note 1
Summary of Significant Accounting Policies
General The company’s Consolidated Financial Statements are prepared in accordance with accounting principles
generally accepted in the United States of America. These require the use of estimates and assumptions that affect the
assets, liabilities, revenues and expenses reported in the financial statements, as well as amounts included in the notes
thereto, including discussion and disclosure of contingent liabilities. Although the company uses its best estimates and
judgments, actual results could differ from these estimates as circumstances change and additional information becomes
known.
Subsidiary and Affiliated Companies The Consolidated Financial Statements include the accounts of controlled subsidiary
companies more than 50 percent-owned and any variable interest entities in which the company is the primary beneficiary.
Undivided interests in oil and gas joint ventures and certain other assets are consolidated on a proportionate basis.
Investments in and advances to affiliates in which the company has a substantial ownership interest of approximately
20 percent to 50 percent, or for which the company exercises significant influence but not control over policy decisions, are
accounted for by the equity method.
Investments in affiliates are assessed for possible impairment when events indicate that the fair value of the investment
may be below the company’s carrying value. When such a condition is deemed to be other than temporary, the carrying
value of the investment is written down to its fair value, and the amount of the write-down is included in net income. In
making the determination as to whether a decline is other than temporary, the company considers such factors as the
duration and extent of the decline, the investee’s financial performance, and the company’s ability and intention to retain its
investment for a period that will be sufficient to allow for any anticipated recovery in the investment’s market value. The
new cost basis of investments in these equity investees is not changed for subsequent recoveries in fair value.
Differences between the company’s carrying value of an equity investment and its underlying equity in the net assets of the
affiliate are assigned to the extent practicable to specific assets and liabilities based on the company’s analysis of the
various factors giving rise to the difference. When appropriate, the company’s share of the affiliate’s reported earnings is
adjusted quarterly to reflect the difference between these allocated values and the affiliate’s historical book values.
Noncontrolling Interests Ownership interests in the company’s subsidiaries held by parties other than the parent are
presented separately from the parent’s equity on the Consolidated Balance Sheet. The amount of consolidated net income
attributable to the parent and the noncontrolling interests are both presented on the face of the Consolidated Statement of
Income and Consolidated Statement of Equity. Included within noncontrolling interest is redeemable noncontrolling
interest.
Fair Value Measurements The three levels of the fair value hierarchy of inputs the company uses to measure the fair value
of an asset or a liability are as follows. Level 1 inputs are quoted prices in active markets for identical assets or liabilities.
Level 2 inputs are inputs other than quoted prices included within Level 1 that are directly or indirectly observable for the
asset or liability. Level 3 inputs are inputs that are not observable in the market.
Derivatives The majority of the company’s activity in derivative commodity instruments is intended to manage the
financial risk posed by physical transactions. For some of this derivative activity, the company may elect to apply fair value
or cash flow hedge accounting with changes in fair value recorded as components of accumulated other comprehensive
income (loss). For other similar derivative instruments, generally because of the short-term nature of the contracts or their
limited use, the company does not apply hedge accounting, and changes in the fair value of those contracts are reflected in
current income. For the company’s commodity trading activity, gains and losses from derivative instruments are reported
in current income. The company may enter into interest rate swaps from time to time as part of its overall strategy to
manage the interest rate risk on its debt. Interest rate swaps related to a portion of the company’s fixed-rate debt, if any,
may be accounted for as fair value hedges. Interest rate swaps related to floating-rate debt, if any, are recorded at fair value
on the balance sheet with resulting gains and losses reflected in income. Where Chevron is a party to master netting
arrangements, fair value receivable and payable amounts recognized for derivative instruments executed with the same
counterparty are generally offset on the balance sheet.
Inventories Crude oil, petroleum products and chemicals inventories are generally stated at cost, using a last-in, first-out
method. In the aggregate, these costs are below market. “Materials, supplies and other” inventories are primarily stated at
cost or net realizable value.
Chevron Corporation 2021 Annual Report
63
63
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
Properties, Plant and Equipment The successful efforts method is used for crude oil and natural gas exploration and
production activities. All costs for development wells, related plant and equipment, proved mineral interests in crude oil
and natural gas properties, and related asset retirement obligation (ARO) assets are capitalized. Costs of exploratory wells
are capitalized pending determination of whether the wells found proved reserves. Costs of wells that are assigned proved
reserves remain capitalized. Costs also are capitalized for exploratory wells that have found crude oil and natural gas
reserves even if the reserves cannot be classified as proved when the drilling is completed, provided the exploratory well
has found a sufficient quantity of reserves to justify its completion as a producing well and the company is making
sufficient progress assessing the reserves and the economic and operating viability of the project. All other exploratory
wells and costs are expensed. Refer to Note 21 Accounting for Suspended Exploratory Wells for additional discussion of
accounting for suspended exploratory well costs.
Long-lived assets to be held and used, including proved crude oil and natural gas properties, are assessed for possible
impairment by comparing their carrying values with their associated undiscounted, future net cash flows. Events that can
trigger assessments for possible impairments include write-downs of proved reserves based on field performance,
significant decreases in the market value of an asset (including changes to the commodity price forecast or carbon costs),
significant change in the extent or manner of use of or a physical change in an asset, and a more-likely-than-not expectation
that a long-lived asset or asset group will be sold or otherwise disposed of significantly sooner than the end of its
previously estimated useful life. Impaired assets are written down to their estimated fair values, generally their discounted,
future net cash flows. For proved crude oil and natural gas properties, the company performs impairment reviews on a
country, concession, PSC, development area or field basis, as appropriate. In Downstream, impairment reviews are
performed on the basis of a refinery, a plant, a marketing/lubricants area or distribution area, as appropriate. Impairment
amounts are recorded as incremental “Depreciation, depletion and amortization” expense.
Long-lived assets that are held for sale are evaluated for possible impairment by comparing the carrying value of the asset
with its fair value less the cost to sell. If the net book value exceeds the fair value less cost to sell, the asset is considered
impaired and adjusted to the lower value. Refer to Note 9 Fair Value Measurements relating to fair value measurements.
The fair value of a liability for an ARO is recorded as an asset and a liability when there is a legal obligation associated
with the retirement of a long-lived asset and the amount can be reasonably estimated. Refer also to Note 25 Asset
Retirement Obligations relating to AROs.
Depreciation and depletion of all capitalized costs of proved crude oil and natural gas producing properties, except mineral
interests, are expensed using the unit-of-production method, generally by individual field, as the proved developed reserves
are produced. Depletion expenses for capitalized costs of proved mineral interests are recognized using the unit-of-
production method by individual field as the related proved reserves are produced. Impairments of capitalized costs of
unproved mineral interests are expensed.
The capitalized costs of all other plant and equipment are depreciated or amortized over their estimated useful lives. In
general, the declining-balance method is used to depreciate plant and equipment in the United States; the straight-line
method is generally used to depreciate international plant and equipment and to amortize finance lease right-of-use assets.
Gains or losses are not recognized for normal retirements of properties, plant and equipment subject to composite group
amortization or depreciation. Gains or losses from abnormal retirements are recorded as expenses, and from sales as “Other
income.”
Expenditures for maintenance (including those for planned major maintenance projects), repairs and minor renewals to
maintain facilities in operating condition are generally expensed as incurred. Major replacements and renewals are
capitalized.
Leases Leases are classified as operating or finance leases. Both operating and finance leases recognize lease liabilities and
associated right-of-use assets. The company has elected the short-term lease exception and therefore only recognizes right-
of-use assets and lease liabilities for leases with a term greater than one year. The company has elected the practical
expedient to not separate non-lease components from lease components for most asset classes except for certain asset
classes that have significant non-lease (i.e., service) components.
Where leases are used in joint ventures, the company recognizes 100 percent of the right-of-use assets and lease liabilities
when the company is the sole signatory for the lease (in most cases, where the company is the operator of a joint venture).
Lease costs reflect only the costs associated with the operator’s working interest share. The lease term includes the
committed lease term identified in the contract, taking into account renewal and termination options that management is
Chevron Corporation 2021 Annual Report
64
64
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
reasonably certain to exercise. The company uses its incremental borrowing rate as a proxy for the discount rate based on
the term of the lease unless the implicit rate is available.
Goodwill Goodwill resulting from a business combination is not subject to amortization. The company tests such goodwill
at the reporting unit level for impairment annually at December 31, or more frequently if an event occurs or circumstances
change that would more likely than not reduce the fair value of the reporting unit below its carrying amount.
Environmental Expenditures Environmental expenditures that relate to ongoing operations or to conditions caused by past
operations are expensed. Expenditures that create future benefits or contribute to future revenue generation are capitalized.
Liabilities related to future remediation costs are recorded when environmental assessments or cleanups or both are
probable and the costs can be reasonably estimated. For crude oil, natural gas and mineral-producing properties, a liability
for an ARO is made in accordance with accounting standards for asset retirement and environmental obligations. Refer to
Note 25 Asset Retirement Obligations for a discussion of the company’s AROs.
For U.S. federal Superfund sites and analogous sites under state laws, the company records a liability for its designated
share of the probable and estimable costs, and probable amounts for other potentially responsible parties when mandated
by the regulatory agencies because the other parties are not able to pay their respective shares. The gross amount of
environmental liabilities is based on the company’s best estimate of future costs using currently available technology and
applying current regulations and the company’s own internal environmental policies. Future amounts are not discounted.
Recoveries or reimbursements are recorded as assets when receipt is reasonably assured.
Currency Translation The U.S. dollar is the functional currency for substantially all of the company’s consolidated
operations and those of its equity affiliates. For those operations, all gains and losses from currency remeasurement are
included in current period income. The cumulative translation effects for those few entities, both consolidated and
affiliated, using functional currencies other than the U.S. dollar are included in “Currency translation adjustment” on the
Consolidated Statement of Equity.
Revenue Recognition The company accounts for each delivery order of crude oil, natural gas, petroleum and chemical
products as a separate performance obligation. Revenue is recognized when the performance obligation is satisfied, which
typically occurs at the point in time when control of the product transfers to the customer. Payment is generally due within
30 days of delivery. The company accounts for delivery transportation as a fulfillment cost, not a separate performance
obligation, and recognizes these costs as an operating expense in the period when revenue for the related commodity is
recognized.
Revenue is measured as the amount the company expects to receive in exchange for transferring commodities to the
customer. The company’s commodity sales are typically based on prevailing market-based prices and may include
discounts and allowances. Until market prices become known under terms of the company’s contracts, the transaction price
included in revenue is based on the company’s estimate of the most likely outcome.
Discounts and allowances are estimated using a combination of historical and recent data trends. When deliveries contain
multiple products, an observable standalone selling price is generally used to measure revenue for each product. The
company includes estimates in the transaction price only to the extent that a significant reversal of revenue is not probable
in subsequent periods.
Stock Options and Other Share-Based Compensation The company issues stock options and other share-based
compensation to certain employees. For equity awards, such as stock options, total compensation cost is based on the grant
date fair value, and for liability awards, such as stock appreciation rights, total compensation cost is based on the settlement
value. The company recognizes stock-based compensation expense for all awards over the service period required to earn
the award, which is the shorter of the vesting period or the time period in which an employee becomes eligible to retain the
award at retirement. The company’s Long-Term Incentive Plan (LTIP) awards include stock options and stock appreciation
rights, which have graded vesting provisions by which one-third of each award vests on each of the first, second and third
anniversaries of the date of grant. In addition, performance shares granted under the company’s LTIP will vest at the end of
the three-year performance period. For awards granted under the company’s LTIP beginning in 2017, stock options and
stock appreciation rights have graded vesting by which one third of each award vests annually on each January 31 on or
after the first anniversary of the grant date. Standard restricted stock unit awards have cliff vesting by which the total award
will vest on January 31 on or after the fifth anniversary of the grant date, subject to adjustment upon termination pursuant
to the satisfaction of certain criteria. The company amortizes these awards on a straight-line basis.
Chevron Corporation 2021 Annual Report
65
65
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
Note 2
Changes in Accumulated Other Comprehensive Losses
The change in Accumulated Other Comprehensive Losses (AOCL) presented on the Consolidated Balance Sheet and the
impact of significant amounts reclassified from AOCL on information presented in the Consolidated Statement of Income
for the year ended December 31, 2021, are reflected in the table below.
Currency
Translation
Adjustments
(124)
$
Unrealized
Holding Gains
(Losses) on
Securities
(10)
$
Derivatives
(2)
$
Defined
Benefit Plans
(3,408)
$
(18)
—
(18)
(142)
35
—
35
(107)
$
$
$
$
2
—
2
(8)
(2)
—
(2)
(10)
$
$
(1)
3
2
—
—
—
—
—
$
$
(1,838)
406
(1,432)
(4,840)
(1,487)
832
(655)
(5,495)
Total
(3,544)
(1,855)
409
(1,446)
(4,990)
(1,454)
832
(622)
(5,612)
$
$
$
Balance at December 31, 2018
Components of Other Comprehensive Income (Loss)1:
Before Reclassifications
Reclassifications3
Net Other Comprehensive Income (Loss)
Balance at December 31, 2019
Components of Other Comprehensive Income (Loss)1:
Before Reclassifications
Reclassifications3
Net Other Comprehensive Income (Loss)
Balance at December 31, 2020
Components of Other Comprehensive Income (Loss)1:
Before Reclassifications
Reclassifications2, 3
Net Other Comprehensive Income (Loss)
(55)
—
(55)
(162)
(1)
—
(1)
(11)
(6)
6
—
—
949
830
1,779
(3,716)
887
836
1,723
(3,889)
Balance at December 31, 2021
1 All amounts are net of tax.
2 Refer to Note 10 Financial and Derivative Instruments for cash flow hedging.
3 Refer to Note 23 Employee Benefit Plans, for reclassified components, including amortization of actuarial gains or losses, amortization of prior service costs and settlement
losses, totaling $1,055 that are included in employee benefit costs for the year ended December 31, 2021. Related income taxes for the same period, totaling $225, are
reflected in Income Tax Expense on the Consolidated Statement of Income. All other reclassified amounts were insignificant.
$
$
$
$
$
Chevron Corporation 2021 Annual Report
66
66
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
Note 3
Information Relating to the Consolidated Statement of Cash Flows
Distributions more (less) than income from equity affiliates includes the following:
Distributions from equity affiliates
(Income) loss from equity affiliates
Distributions more (less) than income from equity affiliates
Net decrease (increase) in operating working capital was composed of the following:
Decrease (increase) in accounts and notes receivable
Decrease (increase) in inventories
Decrease (increase) in prepaid expenses and other current assets
Increase (decrease) in accounts payable and accrued liabilities
Increase (decrease) in income and other taxes payable
Net decrease (increase) in operating working capital
Net cash provided by operating activities includes the following cash payments:
Interest on debt (net of capitalized interest)
Income taxes
Proceeds and deposits related to asset sales and returns of investment consisted of the
following gross amounts:
Proceeds and deposits related to asset sales
Returns of investment from equity affiliates
Proceeds and deposits related to asset sales and returns of investment
Net maturities (investments) of time deposits consisted of the following gross amounts:
Investments in time deposits
Maturities of time deposits
Net maturities of (investments in) time deposits
Net sales (purchases) of marketable securities consisted of the following gross amounts:
Marketable securities purchased
Marketable securities sold
Net sales (purchases) of marketable securities
Net repayment (borrowing) of loans by equity affiliates:
Borrowing of loans by equity affiliates
Repayment of loans by equity affiliates
Net repayment (borrowing) of loans by equity affiliates
Net borrowings (repayments) of short-term obligations consisted of the following gross and
net amounts:
Proceeds from issuances of short-term obligations
Repayments of short-term obligations
Net borrowings (repayments) of short-term obligations with three months or less maturity
Net borrowings (repayments) of short-term obligations
Net sales (purchases) of treasury shares consists of the following gross and net amounts:
Shares issued for share-based compensation plans
Shares purchased under share repurchase and deferred compensation plans
Net sales (purchases) of treasury shares
Net contributions from (distributions to) noncontrolling interests consisted of the following
gross and net amounts:
Distributions to noncontrolling interests
Contributions from noncontrolling interests
Net contributions from (distributions to) noncontrolling interests
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
2021
3,659
(5,657)
(1,998)
(7,548)
(530)
19
5,475
1,223
(1,361)
699
4,355
1,352
439
1,791
—
—
—
(4)
3
(1)
—
401
401
4,448
(6,906)
(3,114)
(5,572)
1,421
(1,383)
38
(53)
17
(36)
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Year ended December 31
2019
2020
1,543 $
472
2,015 $
2,423 $
284
(87)
(3,576)
(696)
(1,652) $
720 $
2,987
2,891 $
77
2,968 $
— $
—
— $
— $
35
35 $
(3,925) $
2,506
(1,419) $
10,846 $
(9,771)
(424)
651 $
226 $
(1,757)
(1,531) $
(26) $
2
(24) $
1,895
(3,968)
(2,073)
1,852
7
(323)
(109)
67
1,494
810
4,817
2,809
142
2,951
—
950
950
(1)
3
2
(1,350)
105
(1,245)
2,586
(1,430)
(3,977)
(2,821)
1,104
(4,039)
(2,935)
(18)
—
(18)
The “Other” line in the Operating Activities section includes changes in postretirement benefits obligations and other long-
term liabilities.
The Consolidated Statement of Cash Flows excludes changes to the Consolidated Balance Sheet that did not affect cash.
“Distributions more (less) than income from equity affiliates,” “Depreciation, depletion and amortization,” “Deferred
income tax provision,” and “Dry hole expense,” collectively include approximately $4.8 billion in non-cash reductions to
properties, plant and equipment in 2020 relating to impairments and other non-cash charges. The company did not have
any material impairments in 2021.
Chevron Corporation 2021 Annual Report
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67
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
Refer also to Note 25 Asset Retirement Obligations for a discussion of revisions to the company’s AROs that also did not
involve cash receipts or payments for the three years ending December 31, 2021.
The major components of “Capital expenditures” and the reconciliation of this amount to the reported capital and
exploratory expenditures, including equity affiliates, are presented in the following table.
Additions to properties, plant and equipment *
Additions to investments
Current-year dry hole expenditures
Payments for other assets and liabilities, net
Capital expenditures
Expensed exploration expenditures
Assets acquired through finance leases and other obligations
Payments for other assets and liabilities, net
Capital and exploratory expenditures, excluding equity affiliates
Company’s share of expenditures by equity affiliates
Capital and exploratory expenditures, including equity affiliates
* Excludes non-cash movements of $316 in 2021, $816 in 2020 and $(239) in 2019.
$
$
2021
7,515
460
83
(2)
8,056
431
64
2
8,553
3,167
11,720
$
$
Year ended December 31
2019
2020
13,839
8,492 $
140
136
124
327
13
(33)
14,116
8,922
598
500
181
53
(13)
42
14,882
9,517
6,112
3,982
20,994
13,499 $
The table below quantifies the beginning and ending balances of restricted cash and restricted cash equivalents in the
Consolidated Balance Sheet:
Cash and cash equivalents
Restricted cash included in “Prepaid expenses and other current assets”
Restricted cash included in “Deferred charges and other assets”
Total cash, cash equivalents and restricted cash
$
$
2021
5,640
333
822
6,795
$
$
Year ended December 31
2019
2020
5,686
5,596 $
452
365
773
776
6,911
6,737 $
Note 4
New Accounting Standards
There are not currently any new or pending accounting standards that have a significant impact on Chevron.
Note 5
Lease Commitments
The company enters into leasing arrangements as a lessee; any lessor arrangements are not significant. Operating lease
arrangements mainly involve land, bareboat charters, terminals, drill ships, drilling rigs, time chartered vessels, office
buildings and warehouses, and exploration and production equipment. Finance leases primarily include facilities, vessels,
office buildings, and production equipment.
Details of the right-of-use assets and lease liabilities for operating and finance leases, including the balance sheet
presentation, are as follows:
Chevron Corporation 2021 Annual Report
68
68
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
Deferred charges and other assets
Properties, plant and equipment, net
Right-of-use assets*
Accrued Liabilities
Short-term Debt
Current lease liabilities
Deferred credits and other noncurrent obligations
Long-term Debt
Noncurrent lease liabilities
Total lease liabilities
At December 31, 2021
Finance
Leases
Operating
Leases
At December 31, 2020
Finance
Leases
Operating
Leases
$
$
$
$
3,668
$
—
$
3,949
$
—
3,668
995
—
995
2,508
—
2,508
3,503
$
$
$
429
429
—
48
48
—
449
449
497
$
$
$
—
3,949
1,291
—
1,291
2,615
—
2,615
3,906
$
$
$
—
455
455
—
186
186
—
447
447
633
Weighted-average remaining lease term (in years)
Weighted-average discount rate
* Includes non-cash additions of $1,063 and $60 in 2021, and $1,353 and $164 in 2020 for right-of-use assets obtained in exchange for new and modified lease
liabilities for operating and finance leases, respectively. 2020 includes $566 in operating lease right-of-use assets and $566 lease liabilities associated with the
Puma acquisition. 2020 also includes $124 in operating lease right-of-use assets and $148 lease liabilities, and $112 in finance lease right-of-use assets and $309
lease liabilities associated with the Noble acquisition.
7.8
2.2 %
13.2
4.2 %
7.2
2.8 %
10.4
3.9 %
Total lease costs consist of both amounts recognized in the Consolidated Statement of Income during the period and
amounts capitalized as part of the cost of another asset. Total lease costs incurred for operating and finance leases were as
follows:
Operating lease costs*
Finance lease costs
Total lease costs
* Includes variable and short-term lease costs.
Year-ended December 31
2021
2,199 $
66
2,265 $
2020
2,551 $
45
2,596 $
2019
2,621
66
2,687
$
$
Cash paid for amounts included in the measurement of lease liabilities was as follows:
Operating cash flows from operating leases
Investing cash flows from operating leases
Operating cash flows from finance leases
Financing cash flows from finance leases
Year-ended December 31
2021
2020
$
1,670 $
1,744 $
398
21
193
762
14
34
2019
1,574
1,047
13
24
At December 31, 2021, the estimated future undiscounted cash flows for operating and finance leases were as follows:
Year
2022
2023
2024
2025
2026
Thereafter
Total
Less: Amounts representing interest
Total lease liabilities
At December 31, 2021
Finance
Leases
Operating
Leases
$
1,054 $
674
487
376
245
1,049
3,885 $
382
3,503 $
$
$
64
62
61
58
55
316
616
119
497
Additionally, the company has $1,074 in future undiscounted cash flows for operating leases not yet commenced. These
leases are primarily for a drill ship and drilling rigs. For those leasing arrangements where the underlying asset is not yet
constructed, the lessor is primarily involved in the design and construction of the asset.
Chevron Corporation 2021 Annual Report
69
69
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
Note 6
Summarized Financial Data – Chevron U.S.A. Inc.
Chevron U.S.A. Inc. (CUSA) is a major subsidiary of Chevron Corporation. CUSA and its subsidiaries manage and operate
most of Chevron’s U.S. businesses. Assets include those related to the exploration and production of crude oil, natural gas
and natural gas liquids and those associated with the refining, marketing, supply and distribution of products derived from
petroleum, excluding most of the regulated pipeline operations of Chevron. CUSA also holds the company’s investment in
the Chevron Phillips Chemical Company LLC joint venture, which is accounted for using the equity method. The
summarized financial information for CUSA and its consolidated subsidiaries is as follows:
Sales and other operating revenues
Total costs and other deductions
Net income (loss) attributable to CUSA
Current assets
Other assets
Current liabilities
Other liabilities
Total CUSA net equity
Memo: Total debt
$
2021
120,380
114,641
6,904
$
Year ended December 31
2019
2020
109,314
116,365
(5,061)
67,950 $
72,575
(2,676)
$
$
$
2021
20,216
47,355
17,824
18,438
31,309
11,693
At December 31
2020
10,555
48,054
12,403
14,102
32,104
7,133
$
$
$
Note 7
Summarized Financial Data – Tengizchevroil LLP
Chevron has a 50 percent equity ownership interest in Tengizchevroil LLP (TCO). Refer to Note 15 Investments and
Advances for a discussion of TCO operations. Summarized financial information for 100 percent of TCO is presented in
the table below:
Sales and other operating revenues
Costs and other deductions
Net income attributable to TCO
Current assets
Other assets
Current liabilities
Other liabilities
Total TCO net equity
$
2021
15,927
8,186
5,418
$
Year ended December 31
2019
2020
16,281
9,194 $
7,903
6,076
5,884
2,196
$
$
2021
3,307
51,473
3,436
12,060
39,284
At December 31
2020
2,114
48,390
1,686
12,553
36,265
$
$
Note 8
Summarized Financial Data – Chevron Phillips Chemical Company LLC
Chevron has a 50 percent equity ownership interest in Chevron Phillips Chemical Company LLC (CPChem). Refer to Note
15 Investments and Advances for a discussion of CPChem operations. Summarized financial information for 100 percent
of CPChem is presented in the table below:
Sales and other operating revenues
Costs and other deductions
Net income attributable to CPChem
$
2021
14,104 $
10,862
3,684
Year ended December 31
2019
2020
9,333
8,407 $
7,863
7,221
1,760
1,260
Chevron Corporation 2021 Annual Report
70
70
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
Current assets
Other assets
Current liabilities
Other liabilities
Total CPChem net equity
$
$
2021
3,381 $
14,396
1,854
3,160
12,763 $
At December 31
2020
2,816
14,210
1,394
3,380
12,252
Note 9
Fair Value Measurements
The tables below show the fair value hierarchy for assets and liabilities measured at fair value on a recurring and
nonrecurring basis at December 31, 2021 and December 31, 2020.
Marketable Securities The company calculates fair value for its marketable securities based on quoted market prices for
identical assets. The fair values reflect the cash that would have been received if the instruments were sold at December 31,
2021.
Derivatives The company records most of its derivative instruments – other than any commodity derivative contracts that
are accounted for as normal purchase and normal sale – on the Consolidated Balance Sheet at fair value, with the offsetting
amount to the Consolidated Statement of Income. The company designates certain derivative instruments as cash flow
hedges that, if applicable, are reflected in the table below. Derivatives classified as Level 1 include futures, swaps and
options contracts traded in active markets such as the New York Mercantile Exchange. Derivatives classified as Level 2
include swaps, options and forward contracts principally with financial institutions and other oil and gas companies, the
fair values of which are obtained from third-party broker quotes, industry pricing services and exchanges. The company
obtains multiple sources of pricing information for the Level 2 instruments. Since this pricing information is generated
from observable market data, it has historically been very consistent. The company does not materially adjust this
information.
Properties, Plant and Equipment The company did not have any individually material impairments in 2021. The company
reported impairments for certain upstream properties in 2020 primarily due to downward revisions to its oil and gas price
outlook.
Investments and Advances In 2021, the company did not have any material impairments of investments and advances
measured at fair value on a nonrecurring basis. In 2020, the company fully impaired its investments in Petropiar and
Petroboscan in Venezuela. The impact of these impairments is included in “Income (loss) from equity affiliates” on the
Consolidated Statement of Income.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Marketable securities
Derivatives - not designated
Total assets at fair value
Derivatives - not designated
Total liabilities at fair value
Total
Level 1
At December 31, 2021
Level 3
Level 2
Total
Level 1
$
$
$
35 $
313
348 $
72
72 $
35 $
285
320 $
24
24 $
— $
28
28 $
48
48 $
— $
—
— $
—
— $
31 $
74
105 $
173
173 $
31 $
37
68 $
58
58 $
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Level 2
At December 31, 2020
Level 3
—
—
—
—
—
— $
37
37 $
115
115 $
At December 31
Before-Tax
Loss
At December 31
Before-Tax
Loss
Total Level 1 Level 2 Level 3 Year 2021
Total Level 1 Level 2 Level 3
Year 2020
$
124 $ — $ — $
124 $
414 $ 2,443 $ — $
20 $ 2,423 $
2,599
Properties, plant and equipment, net (held
and used)
Properties, plant and equipment, net (held
for sale)
Investments and advances
—
16
—
—
—
—
—
16
—
32
1,418
—
1,418
—
28
—
—
28
193
2,555
5,347
Total nonrecurring assets at fair value
$
140 $ — $ — $
140 $
446 $ 3,889 $ — $ 1,438 $ 2,451 $
Chevron Corporation 2021 Annual Report
71
71
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
At year-end 2021, the company had assets measured at fair value Level 3 using unobservable inputs of $140. The carrying
value of these assets were written down to fair value based on estimates derived from internal discounted cash flow models.
Cash flows were determined using estimates of future production, an outlook of future price based on published prices and
a discount rate believed to be consistent with those used by principal market participants.
Assets and Liabilities Not Required to Be Measured at Fair Value The company holds cash equivalents in U.S. and non-
U.S. portfolios. The instruments classified as cash equivalents are primarily bank time deposits with maturities of 90 days
or less and money market funds. “Cash and cash equivalents” had carrying/fair values of $5,640 and $5,596 at
December 31, 2021, and December 31, 2020, respectively. The fair values of cash and cash equivalents are classified as
Level 1 and reflect the cash that would have been received if the instruments were settled at December 31, 2021.
“Cash and cash equivalents” do not include investments with a carrying/fair value of $1,155 and $1,141 at December 31,
2021, and December 31, 2020, respectively. At December 31, 2021, these investments are classified as Level 1 and include
restricted funds related to certain upstream decommissioning activities, tax payments and a financing program.
Long-term debt, excluding finance lease liabilities, of $22,164 and $30,805 at December 31, 2021, and December 31, 2020,
respectively, had estimated fair values of $23,670 and $34,390, respectively. Long-term debt primarily includes corporate
issued bonds. The fair value of corporate bonds is $22,835 and classified as Level 1. The fair value of other long-term debt
is $835 and classified as Level 2.
The carrying values of short-term financial assets and liabilities on the Consolidated Balance Sheet approximate their fair
values. Fair value remeasurements of other financial instruments at December 31, 2021 and 2020, were not material.
Note 10
Financial and Derivative Instruments
Derivative Commodity Instruments The company’s derivative commodity instruments principally include crude oil,
natural gas, liquefied natural gas and refined product futures, swaps, options, and forward contracts. The company applies
cash flow hedge accounting to certain commodity transactions, where appropriate, to manage the market price risk
associated with forecasted sales of crude oil. The company’s derivatives are not material to the company’s financial
position, results of operations or liquidity. The company believes it has no material market or credit risks to its operations,
financial position or liquidity as a result of its commodity derivative activities.
The company uses derivative commodity instruments traded on the New York Mercantile Exchange and on electronic
platforms of the Inter-Continental Exchange and Chicago Mercantile Exchange. In addition, the company enters into swap
contracts and option contracts principally with major financial institutions and other oil and gas companies in the “over-
the-counter” markets, which are governed by International Swaps and Derivatives Association agreements and other master
netting arrangements. Depending on the nature of the derivative transactions, bilateral collateral arrangements may also be
required.
Derivative instruments measured at fair value at December 31, 2021, 2020 and 2019, and their classification on the
Consolidated Balance Sheet below and Consolidated Statement of Income on the following page:
Consolidated Balance Sheet: Fair Value of Derivatives
Type of Contract
Commodity
Commodity
Total assets at fair value
Commodity
Commodity
Total liabilities at fair value
Balance Sheet Classification
Accounts and notes receivable, net
Long-term receivables, net
Accounts payable
Deferred credits and other noncurrent obligations
$
$
$
$
2021
251
62
313
71
1
72
Chevron Corporation 2021 Annual Report
72
72
At December 31
2020
73
1
74
172
1
173
$
$
$
$
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
Consolidated Statement of Income: The Effect of Derivatives
Type of Derivative
Statement of
Contract
Commodity
Commodity
Commodity
Income Classification
Sales and other operating revenues
Purchased crude oil and products
Other income
$
$
2021
(685)
(64)
(46)
(795)
$
$
Gain/(Loss)
Year ended December 31
2019
(291)
(17)
(2)
(310)
2020
69
(36)
7
40
$
$
All designated cash flow hedges during the year were settled by December 31, 2021. The impact on sales and other
operating revenues from designated hedges in 2021 was immaterial.
The table below represents gross and net derivative assets and liabilities subject to netting agreements on the Consolidated
Balance Sheet at December 31, 2021 and December 31, 2020.
Consolidated Balance Sheet: The Effect of Netting Derivative Assets and Liabilities
At December 31, 2021
Derivative Assets - not designated
Derivative Liabilities - not designated
At December 31, 2020
Derivative Assets - not designated
Derivative Liabilities - not designated
Gross Amounts
Recognized
1,684 $
1,443 $
818 $
917 $
Gross Amounts
Offset
1,371 $
1,371 $
744 $
744 $
$
$
$
$
Net Amounts
Presented
Gross Amounts
Not Offset
313 $
72 $
74 $
173 $
— $
— $
— $
— $
Net
Amounts
313
72
74
173
Derivative assets and liabilities are classified on the Consolidated Balance Sheet as accounts and notes receivable, long-
term receivables, accounts payable, and deferred credits and other noncurrent obligations. Amounts not offset on the
Consolidated Balance Sheet represent positions that do not meet all the conditions for “a right of offset.”
Concentrations of Credit Risk The company’s financial instruments that are exposed to concentrations of credit risk
consist primarily of its cash equivalents, marketable securities, derivative financial instruments and trade receivables. The
company’s short-term investments are placed with a wide array of financial institutions with high credit ratings. Company
investment policies limit the company’s exposure both to credit risk and to concentrations of credit risk. Similar policies on
diversification and creditworthiness are applied to the company’s counterparties in derivative instruments. For a discussion
of credit risk on trade receivables, see Note 28 Financial Instruments - Credit Losses.
Note 11
Assets Held for Sale
At December 31, 2021, the company classified $768 of net properties, plant and equipment as “Assets held for sale” on the
Consolidated Balance Sheet. These assets are associated with upstream operations that are anticipated to be sold in the next
12 months. The revenues and earnings contributions of these assets in 2021 were not material.
Note 12
Equity
Retained earnings at December 31, 2021 and 2020, included $28,876 and $26,532, respectively, for the company’s share of
undistributed earnings of equity affiliates.
At December 31, 2021, about 66 million shares of Chevron’s common stock remained available for issuance from the 260
million shares that were reserved for issuance under the Chevron Long-Term Incentive Plan. In addition, 614,768 shares
remain available for issuance from the 1,600,000 shares of the company’s common stock that were reserved for awards
under the Chevron Corporation Non-Employee Directors’ Equity Compensation and Deferral Plan.
Chevron Corporation 2021 Annual Report
73
73
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
Note 13
Earnings Per Share
Basic earnings per share (EPS) is based upon “Net Income (Loss) Attributable to Chevron Corporation” (“earnings”) and
includes the effects of deferrals of salary and other compensation awards that are invested in Chevron stock units by certain
officers and employees of the company. Diluted EPS includes the effects of these items as well as the dilutive effects of
outstanding stock options awarded under the company’s stock option programs (refer to Note 22 Stock Options and Other
Share-Based Compensation). The table below sets forth the computation of basic and diluted EPS:
Basic EPS Calculation
Earnings available to common stockholders - Basic1
Weighted-average number of common shares outstanding2
Add: Deferred awards held as stock units
Total weighted-average number of common shares outstanding
Earnings per share of common stock - Basic
Diluted EPS Calculation
Earnings available to common stockholders - Diluted1
Weighted-average number of common shares outstanding2
Add: Deferred awards held as stock units
Add: Dilutive effect of employee stock-based awards
Total weighted-average number of common shares outstanding
$
$
$
$
$
$
2021
15,625
1,916
—
1,916
8.15
15,625
1,916
—
4
1,920
Year ended December 31
2019
2020
(5,543) $
1,870
—
1,870
(2.96) $
(5,543) $
1,870
—
—
1,870
2,924
1,882
—
1,882
1.55
2,924
1,882
—
13
1,895
1.54
Earnings per share of common stock - Diluted
1 There was no effect of dividend equivalents paid on stock units or dilutive impact of employee stock-based awards on earnings.
2 Millions of shares; 1 million shares of employee-based awards were not included in the 2020 diluted EPS calculation as the result would be anti-dilutive.
(2.96) $
8.14
$
$
Note 14
Operating Segments and Geographic Data
Although each subsidiary of Chevron is responsible for its own affairs, Chevron Corporation manages its investments in
these subsidiaries and their affiliates. The investments are grouped into two business segments, Upstream and Downstream,
representing the company’s “reportable segments” and “operating segments.” Upstream operations consist primarily of
exploring for, developing, producing and transporting crude oil and natural gas; liquefaction, transportation and
regasification associated with liquefied natural gas (LNG); transporting crude oil by major international oil export
pipelines; processing, transporting, storage and marketing of natural gas; and a gas-to-liquids plant. Downstream operations
consist primarily of refining of crude oil into petroleum products; marketing of crude oil, refined products, and lubricants;
manufacturing and marketing of renewable fuels; transporting of crude oil and refined products by pipeline, marine vessel,
motor equipment and rail car; and manufacturing and marketing of commodity petrochemicals, plastics for industrial uses,
and fuel and lubricant additives. All Other activities of the company include worldwide cash management and debt
financing activities, corporate administrative functions, insurance operations, real estate activities, and technology
activities.
The company’s segments are managed by “segment managers” who report to the “chief operating decision
maker” (CODM). The segments represent components of the company that engage in activities (a) from which revenues
are earned and expenses are incurred; (b) whose operating results are regularly reviewed by the CODM, which makes
decisions about resources to be allocated to the segments and assesses their performance; and (c) for which discrete
financial information is available.
The company’s primary country of operation is the United States of America, its country of domicile. Other components of
the company’s operations are reported as “International” (outside the United States).
Segment Earnings The company evaluates the performance of its operating segments on an after-tax basis, without
considering the effects of debt financing interest expense or investment interest income, both of which are managed by the
company on a worldwide basis. Corporate administrative costs are not allocated to the operating segments. However,
operating segments are billed for the direct use of corporate services. Non-billable costs remain at the corporate level in
“All Other.” Earnings by major operating area are presented in the following table:
Chevron Corporation 2021 Annual Report
74
74
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
Upstream
United States
International
Total Upstream
Downstream
United States
International
Total Downstream
Total Segment Earnings
All Other
Interest expense
Interest income
Other
Net Income (Loss) Attributable to Chevron Corporation
$
2021
7,319
8,499
15,818
2,389
525
2,914
18,732
(662)
36
(2,481)
15,625
$
$
$
Year ended December 31
2019
2020
(1,608) $
(825)
(2,433)
(571)
618
47
(2,386)
(658)
52
(2,551)
(5,543) $
(5,094)
7,670
2,576
1,559
922
2,481
5,057
(761)
181
(1,553)
2,924
Segment Assets Segment assets do not include intercompany investments or receivables. Assets at year-end 2021 and 2020
are as follows:
Upstream
United States
International
Goodwill
Total Upstream
Downstream
United States
International
Total Downstream
Total Segment Assets
All Other
United States
International
Total All Other
Total Assets – United States
Total Assets – International
Goodwill
Total Assets
2021
41,870
138,157
4,385
184,412
26,376
18,848
45,224
229,636
5,746
4,153
9,899
73,992
161,158
4,385
239,535
$
$
At December 31
2020
$
$
42,431
144,476
4,402
191,309
23,490
16,096
39,586
230,895
4,017
4,878
8,895
69,938
165,450
4,402
239,790
Segment Sales and Other Operating Revenues Operating segment sales and other operating revenues, including internal
transfers, for the years 2021, 2020 and 2019, are presented in the table on the next page. Products are transferred between
operating segments at internal product values that approximate market prices.
Revenues for the upstream segment are derived primarily from the production and sale of crude oil and natural gas, as well
as the sale of third-party production of natural gas. Revenues for the downstream segment are derived from the refining and
marketing of petroleum products such as gasoline, jet fuel, gas oils, lubricants, residual fuel oils and other products derived
from crude oil. This segment also generates revenues from the manufacture and sale of fuel and lubricant additives and the
transportation and trading of refined products and crude oil. “All Other” activities include revenues from insurance
operations, real estate activities and technology companies.
Chevron Corporation 2021 Annual Report
75
75
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
Upstream
United States
International
Subtotal
Intersegment Elimination — United States
Intersegment Elimination — International
Total Upstream
Downstream
United States
International
Subtotal
Intersegment Elimination — United States
Intersegment Elimination — International
Total Downstream
All Other
United States
International
Subtotal
Intersegment Elimination — United States
Intersegment Elimination — International
Total All Other
Sales and Other Operating Revenues
United States
International
Subtotal
Intersegment Elimination — United States
Intersegment Elimination — International
2021
Year ended December 311
2019
2020
$
29,219
$
14,577 $
40,921
70,140
(15,154)
(10,994)
43,992
57,209
58,098
115,307
(2,296)
(1,521)
111,490
506
2
508
(382)
(2)
124
86,934
99,021
185,955
(17,832)
(12,517)
26,804
41,381
(8,068)
(7,002)
26,311
32,589
38,936
71,525
(2,150)
(1,292)
68,083
744
15
759
(667)
(15)
77
47,910
65,755
113,665
(10,885)
(8,309)
23,358
35,628
58,986
(14,944)
(12,335)
31,707
55,271
57,654
112,925
(3,924)
(1,089)
107,912
1,064
20
1,084
(818)
(20)
246
79,693
93,302
172,995
(19,686)
(13,444)
139,865
Total Sales and Other Operating Revenues
94,471 $
1 Other than the United States, no other country accounted for 10 percent or more of the company’s Sales and Other Operating Revenues.
155,606
$
$
Segment Income Taxes Segment income tax expense for the years 2021, 2020 and 2019 is as follows:
Upstream
United States
International
Total Upstream
Downstream
United States
International
Total Downstream
All Other
Total Income Tax Expense (Benefit)
2021
1,934
4,192
6,126
547
203
750
(926)
5,950
$
$
$
$
Year ended December 31
2019
2020
(570) $
(415)
(985)
(192)
253
61
(968)
(1,892) $
(1,550)
3,492
1,942
392
170
562
187
2,691
Other Segment Information Additional information for the segmentation of major equity affiliates is contained in Note 15
Investments and Advances. Information related to properties, plant and equipment by segment is contained in Note 18
Properties, Plant and Equipment.
Chevron Corporation 2021 Annual Report
76
76
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
Note 15
Investments and Advances
Equity in earnings, together with investments in and advances to companies accounted for using the equity method and
other investments accounted for at or below cost, is shown in the following table. For certain equity affiliates, Chevron
pays its share of some income taxes directly. For such affiliates, the equity in earnings does not include these taxes, which
are reported on the Consolidated Statement of Income as “Income tax expense.”
Upstream
Tengizchevroil
Petropiar
Petroboscan
Caspian Pipeline Consortium
Angola LNG Limited
Other*
Total Upstream
Downstream
Chevron Phillips Chemical Company LLC
GS Caltex Corporation
Other
Total Downstream
All Other
Other
Total equity method
Other non-equity method investments
Total investments and advances
Total United States
Total International
$
$
$
$
$
Investments and Advances
At December 31
2020
2021
23,727 $
—
—
805
2,180
1,859
28,571
6,455
3,616
1,725
11,796
(10)
40,357 $
339
40,696 $
8,540 $
32,156 $
22,685 $
—
—
835
2,258
1,875
27,653
6,181
3,547
1,389
11,117
(14)
38,756 $
296
39,052
7,978 $
31,074 $
Equity in Earnings
Year ended December 31
2019
2020
2021
2,831 $
—
—
155
336
187
3,509
1,842
85
220
2,147
1,238 $
(1,396)
(1,112)
159
(166)
137
(1,140)
630
(185)
223
668
1
5,657 $
—
(472) $
1,889 $
3,768 $
709 $
(1,181) $
3,067
80
(11)
155
(26)
(478)
2,787
880
13
288
1,181
—
3,968
641
3,327
* Upstream Other line includes amounts previously reported as Noble Midstream equity affiliates.
Descriptions of major affiliates and non-equity investments, including significant differences between the company’s
carrying value of its investments and its underlying equity in the net assets of the affiliates, are as follows:
Tengizchevroil Chevron has a 50 percent equity ownership interest in Tengizchevroil (TCO), which operates the Tengiz
and Korolev crude oil fields in Kazakhstan. At December 31, 2021, the company’s carrying value of its investment in TCO
was about $100 higher than the amount of underlying equity in TCO’s net assets. This difference results from Chevron
acquiring a portion of its interest in TCO at a value greater than the underlying book value for that portion of TCO’s net
assets. Included in the investment is a loan to TCO to fund the development of the FGP/WPMP with a balance of $4,500.
Petropiar Chevron has a 30 percent interest in Petropiar, a joint stock company which operates the heavy oil Huyapari
Field and upgrading project in Venezuela’s Orinoco Belt. In 2020, the company fully impaired its investments in the
Petropiar affiliate and, effective July 1, 2020, began accounting for this venture as a non-equity method investment.
Petroboscan Chevron has a 39.2 percent interest in Petroboscan, a joint stock company which operates the Boscan Field in
Venezuela. In 2020, the company fully impaired its investments in the Petroboscan affiliate and, effective July 1, 2020,
began accounting for this venture as a non-equity method investment. The company also has an outstanding long-term loan
to Petroboscan of $560, which has been fully provisioned for at year-end 2021.
Caspian Pipeline Consortium Chevron has a 15 percent interest in the Caspian Pipeline Consortium, which provides the
critical export route for crude oil from both TCO and Karachaganak.
Angola LNG Limited Chevron has a 36.4 percent interest in Angola LNG Limited, which processes and liquefies natural
gas produced in Angola for delivery to international markets.
Chevron Phillips Chemical Company LLC Chevron owns 50 percent of Chevron Phillips Chemical Company LLC. The
other half is owned by Phillips 66.
GS Caltex Corporation Chevron owns 50 percent of GS Caltex Corporation, a joint venture with GS Energy in South
Korea. The joint venture imports, refines and markets petroleum products, petrochemicals and lubricants.
Chevron Corporation 2021 Annual Report
77
77
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
Other Information “Sales and other operating revenues” on the Consolidated Statement of Income includes $10,796,
$6,038 and $8,006 with affiliated companies for 2021, 2020 and 2019, respectively. “Purchased crude oil and products”
includes $5,778, $3,003 and $5,694 with affiliated companies for 2021, 2020 and 2019, respectively.
“Accounts and notes receivable” on the Consolidated Balance Sheet includes $1,454 and $807 due from affiliated
companies at December 31, 2021 and 2020, respectively. “Accounts payable” includes $552 and $244 due to affiliated
companies at December 31, 2021 and 2020, respectively.
The following table provides summarized financial information on a 100 percent basis for all equity affiliates as well as
Chevron’s total share, which includes Chevron’s net loans to affiliates of $4,704, $5,153 and $4,331 at December 31, 2021,
2020 and 2019, respectively.
$
2021
71,241 $
15,175
12,598
$
21,871 $
100,235
17,275
24,219
80,612 $
$
2020
49,093 $
5,682
4,704
17,087 $
97,468
12,164
25,586
76,805 $
Affiliates
2019
66,473
13,197
9,809
30,791
97,177
26,032
21,593
80,343
Year ended December 31
Total revenues
Income before income tax expense
Net income attributable to affiliates
At December 31
Current assets
Noncurrent assets
Current liabilities
Noncurrent liabilities
Total affiliates’ net equity
Note 16
Litigation
Ecuador
2021
2020
$
34,359 $
21,641 $
6,984
5,670
2,550
2,034
Chevron Share
2019
32,628
5,954
4,366
$
9,267 $
7,328 $
44,360
7,492
5,982
43,247
5,052
5,884
$
40,153 $
39,639 $
12,998
41,531
10,610
5,068
38,851
Texaco Petroleum Company (Texpet), a subsidiary of Texaco Inc., was a minority member of an oil production consortium
with Ecuadorian state-owned Petroecuador from 1967 until 1992. After termination of the consortium and a third-party
environmental audit, Ecuador and the consortium parties entered into a settlement agreement specifying Texpet’s
remediation obligations. Following Texpet’s completion of a three-year remediation program, Ecuador certified the
remediation as proper and released Texpet and its affiliates from environmental liability. In May 2003, plaintiffs alleging
environmental harm from the consortium’s activities sued Chevron in the Superior Court in Lago Agrio, Ecuador. In
February 2011, that court entered a judgment against Chevron for approximately $9,500 plus additional punitive damages.
An appellate panel affirmed, and Ecuador’s National Court of Justice ratified the judgment but nullified the punitive
damages, resulting in a judgment of approximately $9,500. Ecuador’s highest Constitutional Court rejected Chevron’s final
appeal in July 2018.
In February 2011, Chevron sued the Lago Agrio plaintiffs and several of their lawyers and supporters in the U.S. District
Court for the Southern District of New York (SDNY) for violations of the Racketeer Influenced and Corrupt Organizations
(RICO) Act and state law. The SDNY court ruled that the Ecuadorian judgment had been procured through fraud, bribery,
and corruption, and prohibited the RICO defendants from seeking to enforce the Ecuadorian judgment in the United States
or profiting from their illegal acts. The Court of Appeals for the Second Circuit affirmed, and the U.S. Supreme Court
denied certiorari in June 2017, rendering final the U.S. judgment in favor of Chevron. The Lago Agrio plaintiffs sought to
have the Ecuadorian judgment recognized and enforced in Canada, Brazil, and Argentina. All of those recognition and
enforcement actions were dismissed and resolved in Chevron’s favor. Chevron and Texpet filed an arbitration claim against
Ecuador in September 2009 before an arbitral tribunal administered by the Permanent Court of Arbitration in The Hague,
under the United States-Ecuador Bilateral Investment Treaty. In August 2018, the Tribunal issued an award holding that
the Ecuadorian judgment was based on environmental claims that Ecuador had settled and released, and that it was
procured through fraud, bribery, and corruption. According to the Tribunal, the Ecuadorian judgment “violates
international public policy” and “should not be recognized or enforced by the courts of other States.” The Tribunal ordered
Ecuador to remove the status of enforceability from the Ecuadorian judgment and to compensate Chevron for any injuries
resulting from the judgment. The third and final phase of the arbitration, to determine the amount of compensation Ecuador
owes to Chevron, is ongoing. In September 2020, the District Court of The Hague denied Ecuador’s request to set aside the
Tribunal’s award, stating that it now is “common ground” between Ecuador and Chevron that the Ecuadorian judgment is
fraudulent. In December 2020, Ecuador appealed the District Court’s decision to The Hague Court of Appeals. In a
Chevron Corporation 2021 Annual Report
78
78
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
separate proceeding, Ecuador also admitted that the Ecuadorian judgment is fraudulent in a public filing with the Office of
the United States Trade Representative in July 2020. Management continues to believe that the Ecuadorian judgment is
illegitimate and unenforceable and will vigorously defend against any further attempts to have it recognized or enforced.
Climate Change
Governmental and other entities in various jurisdictions across the United States have filed legal proceedings against fossil
fuel producing companies, including Chevron entities, purporting to seek legal and equitable relief to address alleged
impacts of climate change. Chevron entities are or were among the codefendants in 21 separate lawsuits brought by 17 U.S.
cities and counties, two U.S. states, the District of Columbia and a trade group. One of the city lawsuits was dismissed on
the merits, and one of the county lawsuits was voluntarily dismissed by the plaintiff. The lawsuits assert various causes of
action, including public nuisance, private nuisance, failure to warn, design defect, product defect, trespass, negligence,
impairment of public trust, and violations of consumer protection statutes, based upon the company’s production of oil and
gas products and alleged misrepresentations or omissions relating to climate change risks associated with those products.
The unprecedented legal theories set forth in these proceedings entail the possibility of damages liability (both
compensatory and punitive), injunctive and other forms of equitable relief, including without limitation abatement and
disgorgement of profits, civil penalties and liability for fees and costs of suits, that, while we believe remote, could have a
material adverse effect on the company’s results of operations and financial condition. Further such proceedings are likely
to be filed by other parties. Management believes that these proceedings are legally and factually meritless and detract from
constructive efforts to address the important policy issues presented by climate change, and will vigorously defend against
such proceedings.
Louisiana
Seven coastal parishes and the State of Louisiana have filed lawsuits in Louisiana against numerous oil and gas companies
seeking damages for coastal erosion in or near oil fields located within Louisiana’s coastal zone under Louisiana’s State
and Local Coastal Resources Management Act (SLCRMA). Chevron entities are defendants in 39 of these cases. The
lawsuits allege that the defendants’ historical operations were conducted without necessary permits or failed to comply
with permits obtained and seek damages and other relief, including the costs of restoring coastal wetlands allegedly
impacted by oil field operations. Plaintiffs’ SLCRMA theories are unprecedented; thus, there remains significant
uncertainty about the scope of the claims and alleged damages and any potential effects on the company’s results of
operations and financial condition. Management believes that the claims lack legal and factual merit and will continue to
vigorously defend against such proceedings.
Note 17
Taxes
Income Taxes
Income tax expense (benefit)
U.S. federal
Current
Deferred
State and local
Current
Deferred
Total United States
International
Current
Deferred
Total International
Total income tax expense (benefit)
2021
Year ended December 31
2019
2020
$
$
$
174
1,004
(182) $
(1,315)
222
202
1,602
4,854
(506)
4,348
5,950
$
65
(152)
(1,584)
1,833
(2,141)
(308)
(1,892) $
(73)
(1,074)
153
(172)
(1,166)
4,577
(720)
3,857
2,691
The reconciliation between the U.S. statutory federal income tax rate and the company’s effective income tax rate is
detailed in the following table:
Chevron Corporation 2021 Annual Report
79
79
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
separate proceeding, Ecuador also admitted that the Ecuadorian judgment is fraudulent in a public filing with the Office of
the United States Trade Representative in July 2020. Management continues to believe that the Ecuadorian judgment is
illegitimate and unenforceable and will vigorously defend against any further attempts to have it recognized or enforced.
Climate Change
Governmental and other entities in various jurisdictions across the United States have filed legal proceedings against fossil
fuel producing companies, including Chevron entities, purporting to seek legal and equitable relief to address alleged
impacts of climate change. Chevron entities are or were among the codefendants in 21 separate lawsuits brought by 17 U.S.
cities and counties, two U.S. states, the District of Columbia and a trade group. One of the city lawsuits was dismissed on
the merits, and one of the county lawsuits was voluntarily dismissed by the plaintiff. The lawsuits assert various causes of
action, including public nuisance, private nuisance, failure to warn, design defect, product defect, trespass, negligence,
impairment of public trust, and violations of consumer protection statutes, based upon the company’s production of oil and
gas products and alleged misrepresentations or omissions relating to climate change risks associated with those products.
The unprecedented legal theories set forth in these proceedings entail the possibility of damages liability (both
compensatory and punitive), injunctive and other forms of equitable relief, including without limitation abatement and
disgorgement of profits, civil penalties and liability for fees and costs of suits, that, while we believe remote, could have a
material adverse effect on the company’s results of operations and financial condition. Further such proceedings are likely
to be filed by other parties. Management believes that these proceedings are legally and factually meritless and detract from
constructive efforts to address the important policy issues presented by climate change, and will vigorously defend against
such proceedings.
Louisiana
Seven coastal parishes and the State of Louisiana have filed lawsuits in Louisiana against numerous oil and gas companies
seeking damages for coastal erosion in or near oil fields located within Louisiana’s coastal zone under Louisiana’s State
and Local Coastal Resources Management Act (SLCRMA). Chevron entities are defendants in 39 of these cases. The
lawsuits allege that the defendants’ historical operations were conducted without necessary permits or failed to comply
with permits obtained and seek damages and other relief, including the costs of restoring coastal wetlands allegedly
impacted by oil field operations. Plaintiffs’ SLCRMA theories are unprecedented; thus, there remains significant
uncertainty about the scope of the claims and alleged damages and any potential effects on the company’s results of
operations and financial condition. Management believes that the claims lack legal and factual merit and will continue to
vigorously defend against such proceedings.
Note 17
Taxes
Income Taxes
Income tax expense (benefit)
U.S. federal
Current
Deferred
State and local
Current
Deferred
Total United States
$
174
$
2021
1,004
222
202
1,602
Year ended December 31
2020
2019
(182) $
(1,315)
65
(152)
(1,584)
(73)
(1,074)
153
(172)
(1,166)
International
Current
Deferred
Notes to the Consolidated Financial Statements
Total International
Millions of dollars, except per-share amounts
Total income tax expense (benefit)
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
The reconciliation between the U.S. statutory federal income tax rate and the company’s effective income tax rate is
detailed in the following table:
Income (loss) before income taxes
2019
2020
2021
$
$
1,833
(2,141)
(308)
(1,892) $
4,577
(720)
3,857
2,691
$
$
$
$
$
$
Income (loss) before income taxes
United States
International
United States
International
2020
(5,700)
(1,753)
(5,700)
(7,453)
(1,753)
(1,565)
(7,453)
—
(1,565)
211
—
(39)
211
(65)
(39)
(236)
(65)
(33)
(236)
(165)
(33)
(1,892)
(165)
25.4 %
(1,892)
2019
(5,483)
11,019
(5,483)
5,536
11,019
1,163
5,536
3
1,163
(687)
3
2,196
(687)
(18)
2,196
192
(18)
(18)
192
(140)
(18)
2,691
(140)
48.6 %
2,691
$
$
$
$
$
$
79
25.4 %
48.6 %
Deferred tax liabilities
Deferred tax liabilities
Properties, plant and equipment
Investments and other
Properties, plant and equipment
Investments and other
Total income (loss) before income taxes
Theoretical tax (at U.S. statutory rate of 21% )
Total income (loss) before income taxes
Effect of U.S. tax reform
Theoretical tax (at U.S. statutory rate of 21% )
Equity affiliate accounting effect
Effect of U.S. tax reform
Effect of income taxes from international operations
Equity affiliate accounting effect
State and local taxes on income, net of U.S. federal income tax benefit
Effect of income taxes from international operations
Prior year tax adjustments, claims and settlements 1
State and local taxes on income, net of U.S. federal income tax benefit
Tax credits
Prior year tax adjustments, claims and settlements 1
Other U.S. 1, 2
Tax credits
Total income tax expense (benefit)
Other U.S. 1, 2
Effective income tax rate
Total income tax expense (benefit)
1 Includes one-time tax costs (benefits) associated with changes in uncertain tax positions.
Effective income tax rate
27.5 %
2 Includes one-time tax costs (benefits) associated with changes in valuation allowances (2021 - $(624); 2020 - $0; 2019 - $0).
1 Includes one-time tax costs (benefits) associated with changes in uncertain tax positions.
The 2021 increase in income tax expense of $7,842 is a result of the year-over-year increase in total income before income
2 Includes one-time tax costs (benefits) associated with changes in valuation allowances (2021 - $(624); 2020 - $0; 2019 - $0).
tax expense, which is primarily due to higher upstream realizations, the absence of 2020 impairment and write-offs and
The 2021 increase in income tax expense of $7,842 is a result of the year-over-year increase in total income before income
higher downstream margins. The company’s effective tax rate changed from 25.4 percent in 2020 to 27.5 percent in 2021.
tax expense, which is primarily due to higher upstream realizations, the absence of 2020 impairment and write-offs and
The change in effective tax rate is mainly due to mix effects resulting from the absolute level of earnings or losses and
higher downstream margins. The company’s effective tax rate changed from 25.4 percent in 2020 to 27.5 percent in 2021.
whether they arose in higher or lower tax rate jurisdictions.
The change in effective tax rate is mainly due to mix effects resulting from the absolute level of earnings or losses and
whether they arose in higher or lower tax rate jurisdictions.
The company records its deferred taxes on a tax-jurisdiction basis. The reported deferred tax balances are composed of the
following:
The company records its deferred taxes on a tax-jurisdiction basis. The reported deferred tax balances are composed of the
At December 31
following:
2020
At December 31
2020
16,603
5,617
16,603
22,220
5,617
22,220
(10,585)
(4,721)
(10,585)
(3,856)
(4,721)
(1,056)
(3,856)
(6,701)
(1,056)
(228)
(6,701)
(633)
(228)
(1,234)
(633)
(3,685)
(1,234)
(32,699)
Total deferred tax assets
(3,685)
17,762
Deferred tax assets valuation allowance
(32,699)
Total deferred tax assets
7,283
Total deferred taxes, net
17,762
Deferred tax assets valuation allowance
Deferred tax liabilities decreased by $946 from year-end 2020. The decrease to Investments and other was driven by a
Total deferred taxes, net
7,283
consolidated subsidiary restructuring, partially offset with an increase to Properties, plant and equipment. Deferred tax
Deferred tax liabilities decreased by $946 from year-end 2020. The decrease to Investments and other was driven by a
assets decreased by $2,780 from year-end 2020. This decrease was primarily related to decreases in tax loss carryforwards
consolidated subsidiary restructuring, partially offset with an increase to Properties, plant and equipment. Deferred tax
for various locations, and employee benefits, partially offset by the increase in foreign tax credits.
assets decreased by $2,780 from year-end 2020. This decrease was primarily related to decreases in tax loss carryforwards
for various locations, and employee benefits, partially offset by the increase in foreign tax credits.
The overall valuation allowance relates to deferred tax assets for U.S. foreign tax credit carryforwards, tax loss
carryforwards and temporary differences. The valuation allowance reduces the deferred tax assets to amounts that are, in
The overall valuation allowance relates to deferred tax assets for U.S. foreign tax credit carryforwards, tax loss
management’s assessment, more likely than not to be realized. At the end of 2021, the company had gross tax loss
carryforwards and temporary differences. The valuation allowance reduces the deferred tax assets to amounts that are, in
carryforwards of approximately $10,750 and tax credit carryforwards of approximately $993, primarily related to various
management’s assessment, more likely than not to be realized. At the end of 2021, the company had gross tax loss
international tax jurisdictions. Whereas some of these tax loss carryforwards do not have an expiration date, others expire
carryforwards of approximately $10,750 and tax credit carryforwards of approximately $993, primarily related to various
at various times from 2022 through 2040. U.S. foreign tax credit carryforwards of $11,718 will expire between 2022 and
international tax jurisdictions. Whereas some of these tax loss carryforwards do not have an expiration date, others expire
2032.
at various times from 2022 through 2040. U.S. foreign tax credit carryforwards of $11,718 will expire between 2022 and
2032.
Foreign tax credits
Asset retirement obligations/environmental reserves
Foreign tax credits
Employee benefits
Asset retirement obligations/environmental reserves
Deferred credits
Employee benefits
Tax loss carryforwards
Deferred credits
Other accrued liabilities
Tax loss carryforwards
Inventory
Other accrued liabilities
Operating leases
Inventory
Miscellaneous
Operating leases
Miscellaneous
2021
17,169
4,105
17,169
21,274
4,105
21,274
(11,718)
(4,553)
(11,718)
(3,037)
(4,553)
(996)
(3,037)
(4,175)
(996)
(239)
(4,175)
(289)
(239)
(1,255)
(289)
(3,657)
(1,255)
(29,919)
(3,657)
17,651
(29,919)
9,006
17,651
9,006
Total deferred tax liabilities
Deferred tax assets
Total deferred tax liabilities
Deferred tax assets
2021
$
$
$
$
$
$
$
$
4,854
(506)
4,348
5,950
2021
9,674
11,965
9,674
21,639
11,965
4,544
21,639
—
4,544
(890)
—
2,692
(890)
216
2,692
362
216
(173)
362
(801)
(173)
5,950
(801)
27.5 %
5,950
Chevron Corporation 2021 Annual Report
80
80
80
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
At December 31, 2021 and 2020, deferred taxes were classified on the Consolidated Balance Sheet as follows:
Deferred charges and other assets
Noncurrent deferred income taxes
Total deferred income taxes, net
$
$
2021
(5,659)
14,665
9,006
At December 31
2020
(5,286)
12,569
7,283
$
$
Income taxes are not accrued for unremitted earnings of international operations that have been or are intended to be
reinvested indefinitely. The indefinite reinvestment assertion continues to apply for the purpose of determining deferred tax
liabilities for U.S. state and foreign withholding tax purposes.
U.S. state and foreign withholding taxes are not accrued for unremitted earnings of international operations that have been
or are intended to be reinvested indefinitely. Undistributed earnings of international consolidated subsidiaries and affiliates
for which no deferred income tax provision has been made for possible future remittances totaled approximately $49,200 at
December 31, 2021. This amount represents earnings reinvested as part of the company’s ongoing international business. It
is not practicable to estimate the amount of state and foreign taxes that might be payable on the possible remittance of
earnings that are intended to be reinvested indefinitely. The company does not anticipate incurring significant additional
taxes on remittances of earnings that are not indefinitely reinvested.
Uncertain Income Tax Positions The company recognizes a tax benefit in the financial statements for an uncertain tax
position only if management’s assessment is that the position is “more likely than not” (i.e., a likelihood greater than 50
percent) to be allowed by the tax jurisdiction based solely on the technical merits of the position. The term “tax position” in
the accounting standards for income taxes refers to a position in a previously filed tax return or a position expected to be
taken in a future tax return that is reflected in measuring current or deferred income tax assets and liabilities for interim or
annual periods.
The following table indicates the changes to the company’s unrecognized tax benefits for the years ended December 31,
2021, 2020 and 2019. The term “unrecognized tax benefits” in the accounting standards for income taxes refers to the
differences between a tax position taken or expected to be taken in a tax return and the benefit measured and recognized in
the financial statements. Interest and penalties are not included.
Balance at January 1
Foreign currency effects
Additions based on tax positions taken in current year
Additions for tax positions taken in prior years
Reductions for tax positions taken in prior years
Settlements with taxing authorities in current year
Reductions as a result of a lapse of the applicable statute of limitations
Balance at December 31
$
$
2021
5,018
(1)
194
218
(36)
(18)
(87)
5,288
$
$
2020
4,987 $
2
253
437
(216)
(429)
(16)
5,018 $
2019
5,070
1
94
313
(194)
(78)
(219)
4,987
Approximately 82 percent of the $5,288 of unrecognized tax benefits at December 31, 2021, would have an impact on the
effective tax rate if subsequently recognized. Certain of these unrecognized tax benefits relate to tax carryforwards that
may require a full valuation allowance at the time of any such recognition.
Tax positions for Chevron and its subsidiaries and affiliates are subject to income tax audits by many tax jurisdictions
throughout the world. For the company’s major tax jurisdictions, examinations of tax returns for certain prior tax years had
not been completed as of December 31, 2021. For these jurisdictions, the latest years for which income tax examinations
had been finalized were as follows: United States – 2013, Nigeria – 2007, Australia – 2009, Kazakhstan – 2012 and Saudi
Arabia – 2015.
The company engages in ongoing discussions with tax authorities regarding the resolution of tax matters in the various
jurisdictions. Both the outcome of these tax matters and the timing of resolution and/or closure of the tax audits are highly
uncertain. However, it is reasonably possible that developments on tax matters in certain tax jurisdictions may result in
significant increases or decreases in the company’s total unrecognized tax benefits within the next 12 months. Given the
number of years that still remain subject to examination and the number of matters being examined in the various tax
jurisdictions, the company is unable to estimate the range of possible adjustments to the balance of unrecognized tax
benefits.
Chevron Corporation 2021 Annual Report
81
81
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
On the Consolidated Statement of Income, the company reports interest and penalties related to liabilities for uncertain tax
positions as “Income tax expense.” As of December 31, 2021, accrual benefit of $(76) for anticipated interest and penalty
was included on the Consolidated Balance Sheet, compared with accrual benefit of $(95) as of year-end 2020. Income tax
expense (benefit) associated with interest and penalties was $19, $(124) and $(3) in 2021, 2020 and 2019, respectively.
Taxes Other Than on Income
United States
Import duties and other levies
Property and other miscellaneous taxes
Payroll taxes
Taxes on production
Total United States
International
Import duties and other levies
Property and other miscellaneous taxes
Payroll taxes
Taxes on production
Total International
Total taxes other than on income
Note 18
Properties, Plant and Equipment1
2021
7
3,378
302
628
4,315
49
2,225
113
138
2,525
6,840
$
Year ended December 31
2019
2020
7
2,248
235
317
2,807
39
1,461
117
75
1,692
4,499 $
2
1,785
254
355
2,396
35
1,435
125
145
1,740
4,136
$
Gross Investment at Cost
2019
2020
2021
2021
At December 31
Net Investment
2019
2020
Additions at Cost2
2019
2020
2021
Year ended December 31
Depreciation Expense3
2019
2020
2021
Upstream
United States
International
Total Upstream
Downstream
$ 93,393 $ 96,555 $ 82,117 $ 36,027 $ 38,175 $ 31,082 $ 4,520 $ 13,067 $ 7,751 $ 5,675 $ 6,841 $ 15,222
12,618
202,757
27,840
296,150
94,770
130,797
102,010
140,185
102,639
133,721
206,292
288,409
209,846
306,401
11,121
17,962
10,824
16,499
2,349
6,869
3,664
11,415
11,069
24,136
United States
International
26,888
8,134
Total Downstream 35,022
All Other
26,499
7,993
34,492
25,968
7,480
33,448
10,766
3,300
14,066
11,101
3,395
14,496
11,398
3,114
14,512
543
234
777
638
573
1,211
1,452
355
1,807
833
296
1,129
851
283
1,134
869
256
1,125
United States
International
Total All Other
Total United States
Total International
Total
243
4,729
10
144
253
4,873
16,334
125,010
211,035
12,884
$ 336,045 $ 345,232 $ 326,722 $ 146,961 $ 156,618 $ 150,494 $ 7,796 $ 25,546 $ 13,555 $ 17,925 $ 19,508 $ 29,218
1,916
21
1,937
51,192
105,426
2,078
20
2,098
48,871
98,090
2,236
25
2,261
44,716
105,778
4,719
146
4,865
112,804
213,918
4,195
144
4,339
127,249
217,983
194
5
199
13,899
11,647
143
7
150
5,206
2,590
324
9
333
9,527
4,028
290
7
297
6,798
11,127
403
9
412
8,095
11,413
1 Other than the United States and Australia, no other country accounted for 10 percent or more of the company’s net properties, plant and equipment (PP&E) in 2021.
Australia had PP&E of $46,395, $48,060 and $51,359 in 2021, 2020 and 2019, respectively. Gross Investment at Cost, Net Investment and Additions at Cost for 2020 each
include $16,703 associated with the Noble acquisition.
2 Net of dry hole expense related to prior years’ expenditures of $35, $709 and $49 in 2021, 2020 and 2019, respectively.
3 Depreciation expense includes accretion expense of $616, $560 and $628 in 2021, 2020 and 2019, respectively, and impairments of $414, $2,792 and $10,797 in 2021, 2020
and 2019, respectively.
Chevron Corporation 2021 Annual Report
82
82
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
Note 19
Short-Term Debt
Commercial paper1
Notes payable to banks and others with originating terms of one year or less
Current maturities of long-term debt
Current maturities of long-term finance leases
Redeemable long-term obligations
Subtotal
Reclassified to long-term debt
Total short-term debt
1 Weighted-average interest rate at December 31, 2020 was 0.15%.
$
$
2021
—
62
4,946
48
2,959
8,015
(7,759)
256
At December 31
2020
5,612
15
2,600
186
2,960
11,373
(9,825)
1,548
$
$
Redeemable long-term obligations consist primarily of tax-exempt variable-rate put bonds that are included as current
liabilities because they become redeemable at the option of the bondholders during the year following the balance sheet
date.
The company may periodically enter into interest rate swaps on a portion of its short-term debt. At December 31, 2021, the
company had no interest rate swaps on short-term debt.
At December 31, 2021, the company had $10,075 in 364-day committed credit facilities with various major banks that
enable the refinancing of short-term obligations on a long-term basis. The credit facilities allow the company to convert
any amounts outstanding into a term loan for a period of up to one year. This supports commercial paper borrowing and
can also be used for general corporate purposes. The company’s practice has been to continually replace expiring
commitments with new commitments on substantially the same terms, maintaining levels management believes
appropriate. Any borrowings under the facility would be unsecured indebtedness at interest rates based on the London
Interbank Offered Rate (LIBOR), or Secured Overnight Financing Rate (SOFR) when LIBOR has permanently or
indefinitely ceased or is no longer representative, or an average of base lending rates published by specified banks and on
terms reflecting the company’s strong credit rating. No borrowings were outstanding under this facility at December 31,
2021.
The company classified $7,759 and $9,825 of short-term debt as long-term at December 31, 2021 and 2020, respectively.
Settlement of these obligations is not expected to require the use of working capital within one year, and the company has
both the intent and the ability, as evidenced by committed credit facilities, to refinance them on a long-term basis.
Chevron Corporation 2021 Annual Report
83
83
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
Note 20
Long-Term Debt
Total long-term debt including finance lease liabilities at December 31, 2021, was $31,113. The company’s long-term debt
outstanding at year-end 2021 and 2020 was as follows:
Notes due 2022
Floating rate notes due 2022
Notes due 2023
Floating rate notes due 2023
Notes due 2024
Notes due 2025
Notes due 2026
Notes due 2027
Notes due 2028
Notes due 2029
Notes due 2030
Debentures due 2031
Debentures due 2032
Notes due 2040
Notes due 2041
Notes due 2043
Notes due 2044
Notes due 2047
Notes due 2049
Notes due 2050
Debentures due 2097
Bank loans due 2022 - 2023
3.400% loan3
Medium-term notes, maturing from 2023 to 2038
Notes due 2021
Total including debt due within one year
Weighted Average
Interest Rate (%)1
2.179
0.536
2.377
0.617
3.291
1.724
2.379
8.416
2.763
1.765
4.485
Range of Interest
Rates (%)2
0.333 - 2.498
0.264 - 0.705
0.426 - 7.250
0.354 - 1.054
2.895 - 3.900
0.687 - 3.326
2.954
1.018 - 8.000
3.850
3.250
2.236
8.625
8.000 - 8.625
2.978
6.000
5.250
5.050
4.950
4.200
2.343 - 3.078
7.250
1.520 - 1.920
3.400
0.080 - 7.900
Debt due within one year
Fair market value adjustment for debt acquired in the Noble Energy acquisition
Reclassified from short-term debt
Unamortized discounts and debt issuance costs
Finance lease liabilities4
Total long-term debt
1 Weighted-average interest rate at December 31, 2021
2 Range of interest rates at December 31, 2021.
3 Principal amount to be repaid in installments between 2022 and 2025.
4 For details on finance lease liabilities, see Note 5 Lease Commitments.
At December 31
2021
2020
Principal
Principal
$
$
$
3,800
1,000
4,800
800
1,650
4,000
2,250
2,000
600
500
1,500
102
183
293
397
330
222
187
237
1,750
60
239
218
23
—
27,141
(4,946)
741
7,759
(31)
449
31,113
$
3,800
1,000
4,800
800
1,650
4,000
2,250
2,000
600
500
1,500
108
222
500
850
1,000
850
500
500
1,750
84
1,402
218
23
2,600
33,507
(2,600)
1,690
9,825
(102)
447
42,767
Chevron has an automatic shelf registration statement that expires in August 2023. This registration statement is for an
unspecified amount of nonconvertible debt securities issued or guaranteed by Chevron Corporation or CUSA.
Long-term debt excluding finance lease liabilities with a principal balance of $27,141 matures as follows: 2022 – $4,946;
2023 – $5,785; 2024 – $1,697; 2025 – $4,082; 2026 – $2,250; and after 2026 – $8,381.
In addition to the $2.6 billion in long-term debt that matured in 2021, the company also completed a tender offer in October
2021, with the objective of lowering future interest expenses, and redeemed bonds with a face value of $2.6 billion and a
book value of $3.4 billion (including the fair market valuation adjustment for debt acquired in the Noble Energy
acquisition), which resulted in an after-tax loss on the extinguishment of debt of $260 million. The company also repaid
$1.1 billion of bank loans associated with the NBLX acquisition during 2021.
In February 2022, the company early-redeemed $1.4 billion in notes at face value that were scheduled to mature in March
2022.
See Note 9 Fair Value Measurements for information concerning the fair value of the company’s long-term debt.
Chevron Corporation 2021 Annual Report
84
84
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
Note 21
Accounting for Suspended Exploratory Wells
The company continues to capitalize exploratory well costs after the completion of drilling when the well has found a
sufficient quantity of reserves to justify completion as a producing well, and the business unit is making sufficient progress
assessing the reserves and the economic and operating viability of the project. If either condition is not met or if the
company obtains information that raises substantial doubt about the economic or operational viability of the project, the
exploratory well would be assumed to be impaired, and its costs, net of any salvage value, would be charged to expense.
The following table indicates the changes to the company’s suspended exploratory well costs for the three years ended
December 31, 2021:
Beginning balance at January 1
Additions to capitalized exploratory well costs pending the determination of proved reserves
Reclassifications to wells, facilities and equipment based on the determination of proved reserves
Capitalized exploratory well costs charged to expense
Other*
Ending balance at December 31
* 2020 represents fair value of well costs acquired in the Noble acquisition. 2019 represents property sales.
2021
2,512 $
56
(425)
(34)
—
2,109 $
2020
3,041 $
28
(102)
(667)
212
2,512 $
2019
3,563
244
(500)
(125)
(141)
3,041
$
$
The following table provides an aging of capitalized well costs and the number of projects for which exploratory well costs
have been capitalized for a period greater than one year since the completion of drilling.
Exploratory well costs capitalized for a period of one year or less
Exploratory well costs capitalized for a period greater than one year
Balance at December 31
Number of projects with exploratory well costs that have been capitalized for a period greater than one year*
* Certain projects have multiple wells or fields or both.
$
$
2021
65 $
2,044
2,109 $
15
2020
26 $
At December 31
2019
214
2,827
3,041
22
2,486
2,512 $
17
Of the $2,044 of exploratory well costs capitalized for more than one year at December 31, 2021, $1,119 is related to nine
projects that had drilling activities underway or firmly planned for the near future. The $925 balance is related to six
projects in areas requiring a major capital expenditure before production could begin and for which additional drilling
efforts were not underway or firmly planned for the near future. Additional drilling was not deemed necessary because the
presence of hydrocarbons had already been established, and other activities were in process to enable a future decision on
project development.
The projects for the $925 referenced above had the following activities associated with assessing the reserves and the
projects’ economic viability: (a) $486 (four projects) – undergoing front-end engineering and design with final investment
decision expected within four years; (b) $439 (two projects) – development alternatives under review. While progress was
being made on all 15 projects, the decision on the recognition of proved reserves under SEC rules in some cases may not
occur for several years because of the complexity, scale and negotiations associated with the projects. More than half of
these decisions are expected to occur in the next five years.
The $2,044 of suspended well costs capitalized for a period greater than one year as of December 31, 2021, represents 83
exploratory wells in 15 projects. The tables below contain the aging of these costs on a well and project basis:
Aging based on drilling completion date of individual wells:
Amount
Number of wells
2000-2009
2010-2014
2015-2020
Total
Aging based on drilling completion date of last suspended well in project:
2003-2012
2013-2016
2017-2021
Total
$
$
$
$
312
1,146
586
2,044
Amount
341
1,318
385
2,044
16
50
17
83
Number of projects
3
9
3
15
Chevron Corporation 2021 Annual Report
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85
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
Note 22
Stock Options and Other Share-Based Compensation
Compensation expense for stock options for 2021, 2020 and 2019 was $60 ($47 after tax), $94 ($74 after tax) and $81 ($64
after tax), respectively. In addition, compensation expense for stock appreciation rights, restricted stock, performance
shares and restricted stock units was $701 ($554 after tax), $96 ($76 after tax) and $313 ($266 after tax) for 2021, 2020 and
2019, respectively. No significant stock-based compensation cost was capitalized at December 31, 2021, or December 31,
2020.
Cash received in payment for option exercises under all share-based payment arrangements for 2021, 2020 and 2019 was
$1,274, $226 and $1,090, respectively. Actual tax benefits realized for the tax deductions from option exercises were $(15),
$8 and $43 for 2021, 2020 and 2019, respectively.
Cash paid to settle performance shares, restricted stock units and stock appreciation rights was $163, $95 and $119 for
2021, 2020 and 2019, respectively. Cash paid in 2021 included $4 million for Noble awards paid under change-in-control
plan provisions.
Awards under the Chevron Long-Term Incentive Plan (LTIP) may take the form of, but are not limited to, stock options,
restricted stock, restricted stock units, stock appreciation rights, performance shares and nonstock grants. From April 2004
through May 2023, no more than 260 million shares may be issued under the LTIP. For awards issued on or after May 29,
2013, no more than 50 million of those shares may be in a form other than a stock option, stock appreciation right or award
requiring full payment for shares by the award recipient. For the major types of awards issued before January 1, 2017, the
contractual terms vary between three years for the performance shares and restricted stock units, and 10 years for the stock
options and stock appreciation rights. For awards issued after January 1, 2017, contractual terms vary between three years
for the performance shares and special restricted stock units, five years for standard restricted stock units and 10 years for
the stock options and stock appreciation rights. Forfeitures for performance shares, restricted stock units, and stock
appreciation rights are recognized as they occur. Forfeitures for stock options are estimated using historical forfeiture data
dating back to 1990.
Noble Share-Based Plans (Noble Plans) When Chevron acquired Noble in October 2020, outstanding stock options
granted under various Noble Plans were exchanged for Chevron options. These awards retained the same provision as the
original Noble Plans. Awards issued may be exercised for up to five years after termination of employment, depending
upon the termination type, or the original expiration date, whichever is earlier. Other awards issued under the Noble Plans
included restricted stock awards, restricted stock units, and performance shares, which retained the same provisions as the
original Noble Plans. Upon termination of employment due to change-in-control, all unvested awards issued under the
Noble Plans, including stock options, restricted stock awards, restricted stock units and performance shares become vested
on the termination date. If not exercised, awards will expire between 2022 and 2029.
Fair Value and Assumptions The fair market values of stock options and stock appreciation rights granted in 2021, 2020
and 2019 were measured on the date of grant using the Black-Scholes option-pricing model, with the following weighted-
average assumptions:
Expected term in years1
Volatility2
Risk-free interest rate based on zero coupon U.S. treasury note
Dividend yield
Weighted-average fair value per option granted
2021
6.8
31.1 %
0.71 %
6.0 %
Year ended December 31
2020
6.6
20.8 %
1.5 %
4.0 %
2019
6.6
20.5 %
2.6 %
3.8 %
$
12.22
$
13.00
$
15.82
1 Expected term is based on historical exercise and post-vesting cancellation data.
2 Volatility rate is based on historical stock prices over an appropriate period, generally equal to the expected term.
A summary of option activity during 2021 is presented below:
Outstanding at January 1, 2021
Granted
Exercised
Forfeited
Outstanding at December 31, 2021
Exercisable at December 31, 2021
Shares (Thousands)
90,150
6,948
(12,831)
(6,868)
77,399
66,499
Weighted-Average
Exercise Price
$ 108.17
88.20
$
$
99.64
$ 102.61
$ 108.10
$ 109.80
Averaged Remaining
Contractual Term (Years)
Aggregate Intrinsic Value
4.17
3.45
$
$
1,020
806
Chevron Corporation 2021 Annual Report
86
86
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
The total intrinsic value (i.e., the difference between the exercise price and the market price) of options exercised during
2021, 2020 and 2019 was $152, $92 and $516, respectively. During this period, the company continued its practice of
issuing treasury shares upon exercise of these awards.
As of December 31, 2021, there was $57 of total unrecognized before-tax compensation cost related to nonvested share-
based compensation arrangements granted under the plan. That cost is expected to be recognized over a weighted-average
period of 1.7 years.
At January 1, 2021, the number of LTIP performance shares outstanding was equivalent to 4,434,797 shares. During 2021,
2,219,379 performance shares were granted, 1,378,766 shares vested with cash proceeds distributed to recipients and
252,345 shares were forfeited. At December 31, 2021, there were 5,023,065 performance shares outstanding that are
payable in cash. The fair value of the liability recorded for these instruments was $683 and was measured using the Monte
Carlo simulation method.
At January 1, 2021, the number of restricted stock units outstanding was equivalent to 3,303,933 shares. During 2021,
1,381,433 restricted stock units were granted, 111,831 units vested with cash proceeds distributed to recipients and 186,898
units were forfeited. At December 31, 2021, there were 4,386,637 restricted stock units outstanding that are payable in
cash. The fair value of the liability recorded for the vested portion of these instruments was $381, valued at the stock price
as of December 31, 2021. In addition, outstanding stock appreciation rights that were granted under LTIP totaled
approximately 3.4 million equivalent shares as of December 31, 2021. The fair value of the liability recorded for the vested
portion of these instruments was $75.
Note 23
Employee Benefit Plans
The company has defined benefit pension plans for many employees. The company typically prefunds defined benefit
plans as required by local regulations or in certain situations where prefunding provides economic advantages. In the
United States, all qualified plans are subject to the Employee Retirement Income Security Act (ERISA) minimum funding
standard. The company does not typically fund U.S. nonqualified pension plans that are not subject to funding
requirements under laws and regulations because contributions to these pension plans may be less economic and
investment returns may be less attractive than the company’s other investment alternatives.
The company also sponsors other postretirement benefit (OPEB) plans that provide medical and dental benefits, as well as
life insurance for some active and qualifying retired employees. The plans are unfunded, and the company and retirees
share the costs. For the company’s main U.S. medical plan, the increase to the pre-Medicare company contribution for
retiree medical coverage is limited to no more than 4 percent each year. Certain life insurance benefits are paid by the
company.
The company recognizes the overfunded or underfunded status of each of its defined benefit pension and OPEB plans as an
asset or liability on the Consolidated Balance Sheet.
Chevron Corporation 2021 Annual Report
87
87
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
The funded status of the company’s pension and OPEB plans for 2021 and 2020 follows:
$
Change in Benefit Obligation
Benefit obligation at January 1
Service cost
Interest cost
Plan participants’ contributions
Actuarial (gain) loss
Foreign currency exchange rate changes
Benefits paid
Divestitures/Acquisitions
Curtailment
Benefit obligation at December 31
Change in Plan Assets
Fair value of plan assets at January 1
Actual return on plan assets
Foreign currency exchange rate changes
Employer contributions
Plan participants’ contributions
Benefits paid
Fair value of plan assets at December 31
Funded status at December 31
$
Pension Benefits
2020
Int’l.
U.S.
Other Benefits
2020
2021
$
$
14,465 $
497
353
—
1,782
—
(2,045)
22
92
15,166
10,177
848
—
950
—
(2,045)
9,930
(5,236) $
5,680
130
175
3
550
158
(368)
—
(21)
6,307
4,791
500
174
263
3
(368)
5,363
(944)
$
$
2,650
43
53
43
(108)
(3)
(189)
—
—
2,489
—
—
—
146
43
(189)
—
(2,489)
$
$
2,520
38
71
59
191
(1)
(214)
—
(14)
2,650
—
—
—
155
59
(214)
—
(2,650)
2021
Int’l.
6,307
123
137
3
(364)
(85)
(746)
—
(24)
5,351
5,363
166
(35)
199
3
(746)
4,950
(401)
U.S.
15,166 $
450
235
—
(325)
—
(2,560)
—
—
12,966
9,930
997
—
1,552
—
(2,560)
9,919
(3,047) $
Amounts recognized on the Consolidated Balance Sheet for the company’s pension and OPEB plans at December 31, 2021
and 2020, include:
Deferred charges and other assets
Accrued liabilities
Noncurrent employee benefit plans
Net amount recognized at December 31
U.S.
36 $
(303)
(2,780)
(3,047) $
$
$
2021
Int’l.
696
(142)
(955)
(401)
$
$
U.S.
24 $
Pension Benefits
2020
Int’l.
547
(76)
(1,415)
(944)
(258)
(5,002)
(5,236) $
2021
—
(151)
(2,338)
(2,489)
$
$
$
Other Benefits
2020
—
(153)
(2,497)
(2,650)
$
For the year ended December 31, 2021, the decrease in benefit obligations was primarily due to actuarial gains caused by
higher discount rates used to value the obligations and large benefit payments paid to retirees in 2021. For the year ended
December 31, 2020, the increase in benefit obligations was primarily due to actuarial losses caused by lower discount rates
used to value the obligations.
Amounts recognized on a before-tax basis in “Accumulated other comprehensive loss” for the company’s pension and
OPEB plans were $4,979 and $7,278 at the end of 2021 and 2020, respectively. These amounts consisted of:
Net actuarial loss
Prior service (credit) costs
Total recognized at December 31
U.S.
4,007 $
2
4,009 $
$
$
2021
Int’l.
920
75
995
$
$
U.S.
Pension Benefits
2020
Int’l.
1,401
86
1,487
5,714 $
3
5,717 $
2021
134
(159)
(25)
$
$
Other Benefits
2020
260
(186)
74
$
$
The accumulated benefit obligations for all U.S. and international pension plans were $11,337 and $4,976, respectively, at
December 31, 2021, and $13,608 and $5,758, respectively, at December 31, 2020.
Information for U.S. and international pension plans with an accumulated benefit obligation in excess of plan assets at
December 31, 2021 and 2020, was:
Chevron Corporation 2021 Annual Report
88
88
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
Projected benefit obligations
Accumulated benefit obligations
Fair value of plan assets
$
U.S.
1,957 $
1,665
55
2021
Int’l.
1,097
883
2
$
Pension Benefits
2020
Int’l.
2,084
1,622
600
U.S.
15,103 $
13,545
9,842
The components of net periodic benefit cost and amounts recognized in the Consolidated Statement of Comprehensive
Income for 2021, 2020 and 2019 are shown in the table below:
Pension Benefits
Net Periodic Benefit Cost
Service cost
Interest cost
Expected return on plan assets
Amortization of prior service costs (credits)
Recognized actuarial losses
Settlement losses
Curtailment losses (gains)
Total net periodic benefit cost
Changes Recognized in Comprehensive Income
Net actuarial (gain) loss during period
Amortization of actuarial loss
Prior service (credits) costs during period
Amortization of prior service (costs) credits
Total changes recognized in other
comprehensive income
Recognized in Net Periodic Benefit Cost and
Other Comprehensive Income
2021
Int’l.
U.S.
2020
Int’l.
U.S.
$
497 $
353
(650)
2
385
620
92
1,299
130 $
175
(209)
10
45
37
2
190
U.S.
406 $
397
(565)
2
239
259
—
738
1,584
(1,005)
—
(2)
230
(98)
—
(17)
1,939
(498)
—
(2)
2019
Int’l.
139
199
(231)
11
21
3
16
158
338
(24)
29
(30)
Other Benefits
2021
2020
2019
$
$
43
53
—
(27)
16
—
—
85
(111)
(15)
—
27
38 $
71
—
(28)
3
—
(27)
57
190
(4)
—
42
36
96
—
(28)
(3)
—
—
101
128
3
(1)
28
$
450 $
235
(596)
2
309
672
—
1,072
(725)
(981)
—
(2)
123
137
(171)
8
46
7
(1)
149
(408)
(73)
—
(11)
(1,708)
(492)
577
115
1,439
313
(99)
228
158
$
(636) $
(343)
$ 1,876 $
305 $ 2,177 $
471
$
(14)
$
285 $
259
Assumptions The following weighted-average assumptions were used to determine benefit obligations and net periodic
benefit costs for years ended December 31:
2021
Int’l.
U.S.
2020
Int’l.
U.S.
Pension Benefits
2019
Int’l.
U.S.
Assumptions used to determine benefit obligations:
Discount rate
Rate of compensation increase
2.8 % 2.8 %
4.5 % 4.1 %
2.4 % 2.4 %
4.5 % 4.0 %
3.1 % 3.2 %
4.5 % 4.0 %
Assumptions used to determine net periodic benefit cost:
Discount rate for service cost
Discount rate for interest cost
Expected return on plan assets
Rate of compensation increase
3.0 % 2.4 %
1.9 % 2.4 %
6.5 % 3.5 %
4.5 % 4.0 %
3.3 % 3.2 %
2.6 % 3.2 %
6.5 % 4.5 %
4.5 % 4.0 %
4.4 % 4.4 %
3.7 % 4.4 %
6.8 % 5.6 %
4.5 % 4.0 %
2021
2.9 %
N/A
3.0 %
2.1 %
N/A
N/A
Other Benefits
2019
2020
2.6 %
N/A
3.5 %
3.0 %
N/A
N/A
3.2 %
N/A
4.6 %
4.2 %
N/A
N/A
Expected Return on Plan Assets The company’s estimated long-term rates of return on pension assets are driven primarily
by actual historical asset-class returns, an assessment of expected future performance, advice from external actuarial firms
and the incorporation of specific asset-class risk factors. Asset allocations are periodically updated using pension plan
asset/liability studies, and the company’s estimated long-term rates of return are consistent with these studies. For 2021, the
company used an expected long-term rate of return of 6.50 percent for U.S. pension plan assets, which account for 67
percent of the company’s pension plan assets.
The market-related value of assets of the main U.S. pension plan used in the determination of pension expense was based
on the market values in the three months preceding the year-end measurement date. Management considers the three-month
time period long enough to minimize the effects of distortions from day-to-day market volatility and still be
contemporaneous to the end of the year. For other plans, market value of assets as of year-end is used in calculating the
pension expense.
Chevron Corporation 2021 Annual Report
89
89
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
Discount Rate The discount rate assumptions used to determine the U.S. and international pension and OPEB plan
obligations and expense reflect the rate at which benefits could be effectively settled, and are equal to the equivalent single
rate resulting from yield curve analysis. This analysis considered the projected benefit payments specific to the company’s
plans and the yields on high-quality bonds. The projected cash flows were discounted to the valuation date using the yield
curve for the main U.S. pension and OPEB plans. The effective discount rates derived from this analysis were 2.8 percent,
2.4 percent, and 3.1 percent for 2021, 2020, and 2019, respectively, for both the main U.S. pension and OPEB plans.
Other Benefit Assumptions For the measurement of accumulated postretirement benefit obligation at December 31, 2021,
for the main U.S. OPEB plan, the assumed health care cost-trend rates start with 6.2 percent in 2022 and gradually decline
to 4.5 percent for 2031 and beyond. For this measurement at December 31, 2020, the assumed health care cost-trend rates
started with 6.1 percent in 2021 and gradually declined to 4.5 percent for 2027 and beyond.
Plan Assets and Investment Strategy
The fair value measurements of the company’s pension plans for 2021 and 2020 are as follows:
Total
Level 1
Level 2
Level 3
U.S.
NAV
Total
Level 1
Level 2
Level 3
Int’l.
NAV
At December 31, 2020
Equities
U.S.1
International
Collective Trusts/Mutual Funds2
Fixed Income
Government
Corporate
Bank Loans
Mortgage/Asset Backed
Collective Trusts/Mutual Funds2
Mixed Funds3
Real Estate4
Alternative Investments
Cash and Cash Equivalents
Other5
Total at December 31, 2020
At December 31, 2021
Equities
U.S.1
International
Collective Trusts/Mutual Funds2
Fixed Income
Government
Corporate
Bank Loans
Mortgage/Asset Backed
Collective Trusts/Mutual Funds2
Mixed Funds3
Real Estate4
Alternative Investments
Cash and Cash Equivalents
Other5
Total at December 31, 2021
$ 2,286 $ 2,286 $ — $ — $ —
—
2,211
1,059
1,107
2,210
48
—
—
1
—
231
778
129
1
1,901
—
1,018
—
221
47
—
—
—
—
13
—
—
—
209
(19)
$ 9,930 $ 4,747 $ 1,171 $
231
778
127
1
—
—
—
—
12
22
—
—
—
—
—
2
—
—
1,888
—
—
—
1,018
—
—
—
—
—
41
3
44 $ 3,968
$ 1,677 $ 1,677 $ — $ — $ —
—
1,285
2,509
2,541
1,284
32
—
—
1
—
215
660
137
1
1,907
—
1,172
—
264
60
—
—
—
—
13
—
—
—
263
(1)
215
660
136
1
—
—
—
—
1
14
$ 9,919 $ 3,268 $ 1,027 $
—
—
—
—
—
1
—
—
1,894
—
—
—
1,172
—
—
—
—
—
46
1
48 $ 5,576
$ 5,363 $ 1,406 $
798 $
$
443 $
373
192
240
578
—
4
2,520
127
448
—
417
21
$
491 $
356
134
229
532
—
4
2,388
99
312
—
161
244
443 $ — $ — $ —
—
373
185
7
—
—
—
—
125
10
—
—
4
38
—
—
408
(2)
115
568
—
4
—
89
—
—
3
19
—
—
—
—
—
—
45
—
—
4
—
—
—
—
2,516
—
403
—
6
—
49 $ 3,110
491 $ — $ — $ —
—
355
128
6
1
—
—
—
135
2
—
—
1
12
—
—
89
—
94
530
—
4
—
87
—
—
3
17
—
—
—
—
—
—
—
—
2,387
—
—
—
270
42
—
—
69
—
113
114
156 $ 2,968
$ 4,950 $ 1,091 $
735 $
1 U.S. equities include investments in the company’s common stock in the amount of $0 at December 31, 2021, and $4 at December 31, 2020.
2 Collective Trusts/Mutual Funds for U.S. plans are entirely index funds; for International plans, they are mostly unit trust and index funds.
3 Mixed funds are composed of funds that invest in both equity and fixed-income instruments in order to diversify and lower risk.
4 The year-end valuations of the U.S. real estate assets are based on third-party appraisals that occur at least once a year for each property in the portfolio.
5 The “Other” asset class includes net payables for securities purchased but not yet settled (Level 1); dividends and interest- and tax-related receivables (Level 2); insurance
contracts (Level 3); and investments in private-equity limited partnerships (NAV).
Chevron Corporation 2021 Annual Report
90
90
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
The effects of fair value measurements using significant unobservable inputs on changes in Level 3 plan assets are outlined
below:
Total at December 31, 2019
Actual Return on Plan Assets:
Assets held at the reporting date
Assets sold during the period
Purchases, Sales and Settlements
Transfers in and/or out of Level 3
Total at December 31, 2020
Actual Return on Plan Assets:
Assets held at the reporting date
Assets sold during the period
Purchases, Sales and Settlements
Transfers in and/or out of Level 3
Total at December 31, 2021
Equity
International
$
1 $
—
—
—
—
$
1 $
—
—
—
—
$
1 $
Fixed Income
Corporate
3
Bank Loans
7
$
Real Estate
55
$
$
Other
46
$
Total
112
—
—
(3)
—
—
—
—
—
—
—
$
$
—
—
(5)
—
2
—
—
(2)
—
—
$
$
—
(10)
—
—
45
—
(3)
—
—
42
$
$
1
—
(2)
—
45
4
—
4
108
161
$
$
1
(10)
(10)
—
93
4
(3)
2
108
204
The primary investment objectives of the pension plans are to achieve the highest rate of total return within prudent levels
of risk and liquidity, to diversify and mitigate potential downside risk associated with the investments, and to provide
adequate liquidity for benefit payments and portfolio management.
The company’s U.S. and U.K. pension plans comprise 94 percent of the total pension assets. Both the U.S. and U.K. plans
have an Investment Committee that regularly meets during the year to review the asset holdings and their returns. To assess
the plans’ investment performance, long-term asset allocation policy benchmarks have been established.
For the primary U.S. pension plan, the company’s Investment Committee has established the following approved asset
allocation ranges: Equities 40–65 percent, Fixed Income 20–40 percent, Real Estate 0–15 percent, Alternative Investments
0–5 percent and Cash 0–25 percent. For the U.K. pension plan, the U.K. Board of Trustees has established the following
asset allocation guidelines: Equities 10–30 percent, Fixed Income 55–85 percent, Real Estate 5–15 percent, and Cash 0–5
percent. The other significant international pension plans also have established maximum and minimum asset allocation
ranges that vary by plan. Actual asset allocation within approved ranges is based on a variety of factors, including market
conditions and illiquidity constraints. To mitigate concentration and other risks, assets are invested across multiple asset
classes with active investment managers and passive index funds.
The company does not prefund its OPEB obligations.
Cash Contributions and Benefit Payments In 2021, the company contributed $1,552 and $199 to its U.S. and international
pension plans, respectively. In 2022, the company expects contributions to be approximately $1,100 to its U.S. plans and
$200 to its international pension plans. Actual contribution amounts are dependent upon investment returns, changes in
pension obligations, regulatory environments, tax law changes and other economic factors. Additional funding may
ultimately be required if investment returns are insufficient to offset increases in plan obligations.
The company anticipates paying OPEB benefits of approximately $150 in 2022; $146 was paid in 2021.
The following benefit payments, which include estimated future service, are expected to be paid by the company in the
next 10 years:
2022
2023
2024
2025
2026
2027-2031
$
$
Pension Benefits
Int’l.
296
211
225
232
245
1,367
U.S.
826 $
982
1,025
1,022
998
4,640
Other
Benefits
151
149
146
144
142
682
Employee Savings Investment Plan Eligible employees of Chevron and certain of its subsidiaries participate in the
Chevron Employee Savings Investment Plan (ESIP). Compensation expense for the ESIP totaled $252, $281 and $284 in
2021, 2020 and 2019, respectively.
Chevron Corporation 2021 Annual Report
91
91
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
Benefit Plan Trusts Prior to its acquisition by Chevron, Texaco established a benefit plan trust for funding obligations
under some of its benefit plans. At year-end 2021, the trust contained 14.2 million shares of Chevron treasury stock. The
trust will sell the shares or use the dividends from the shares to pay benefits only to the extent that the company does not
pay such benefits. The company intends to continue to pay its obligations under the benefit plans. The trustee will vote the
shares held in the trust as instructed by the trust’s beneficiaries. The shares held in the trust are not considered outstanding
for earnings-per-share purposes until distributed or sold by the trust in payment of benefit obligations.
Prior to its acquisition by Chevron, Unocal established various grantor trusts to fund obligations under some of its benefit
plans, including the deferred compensation and supplemental retirement plans. At December 31, 2021 and 2020, trust
assets of $36 and $36, respectively, were invested primarily in interest-earning accounts.
Employee Incentive Plans The Chevron Incentive Plan is an annual cash bonus plan for eligible employees that links
awards to corporate, business unit and individual performance in the prior year. Charges to expense for cash bonuses were
$1,165, $462 and $826 in 2021, 2020 and 2019, respectively. Chevron also has the LTIP for officers and other regular
salaried employees of the company and its subsidiaries who hold positions of significant responsibility. Awards under the
LTIP consist of stock options and other share-based compensation that are described in Note 22 Stock Options and Other
Share-Based Compensation.
Note 24
Other Contingencies and Commitments
Income Taxes The company calculates its income tax expense and liabilities quarterly. These liabilities generally are
subject to audit and are not finalized with the individual taxing authorities until several years after the end of the annual
period for which income taxes have been calculated. Refer to Note 17 Taxes for a discussion of the periods for which tax
returns have been audited for the company’s major tax jurisdictions and a discussion for all tax jurisdictions of the
differences between the amount of tax benefits recognized in the financial statements and the amount taken or expected to
be taken in a tax return.
Settlement of open tax years, as well as other tax issues in countries where the company conducts its businesses, are not
expected to have a material effect on the consolidated financial position or liquidity of the company and, in the opinion of
management, adequate provisions have been made for all years under examination or subject to future examination.
Guarantees The company has one guarantee to an equity affiliate totaling $215. This guarantee is associated with certain
payments under a terminal use agreement entered into by an equity affiliate. Over the approximate 6-year remaining term
of this guarantee, the maximum guarantee amount will be reduced as certain fees are paid by the affiliate. There are
numerous cross-indemnity agreements with the affiliate and the other partners to permit recovery of amounts paid under
the guarantee. Chevron has recorded no liability for this guarantee.
Indemnifications In the acquisition of Unocal, the company assumed certain indemnities relating to contingent
environmental liabilities associated with assets that were sold in 1997. The acquirer of those assets shared in certain
environmental remediation costs up to a maximum obligation of $200, which had been reached at December 31, 2009.
Under the indemnification agreement, after reaching the $200 obligation, Chevron is solely responsible until April 2022,
when the indemnification expires. The environmental conditions or events that are subject to these indemnities must have
arisen prior to the sale of the assets in 1997.
Although the company has provided for known obligations under this indemnity that are probable and reasonably
estimable, the amount of additional future costs may be material to results of operations in the period in which they are
recognized. The company does not expect these costs will have a material effect on its consolidated financial position or
liquidity.
Long-Term Unconditional Purchase Obligations and Commitments, Including Throughput and Take-or-Pay
Agreements The company and its subsidiaries have certain contingent liabilities with respect to long-term unconditional
purchase obligations and commitments, including throughput and take-or-pay agreements, some of which may relate to
suppliers’ financing arrangements. The agreements typically provide goods and services, such as pipeline and storage
capacity, utilities, and petroleum products, to be used or sold in the ordinary course of the company’s business. The
aggregate amounts of required payments under throughput and take-or-pay agreements are: 2022 – $1,049; 2023 – $1,106;
2024 – $1,119; 2025 – $1,193; 2026 – $1,223 ; after 2026 – $7,626. The aggregate amount of required payments for other
unconditional purchase obligations are: 2022 – $57; 2023 – $257; 2024 – $242; 2025 – $252; 2026 – $200; after 2026 –
Chevron Corporation 2021 Annual Report
92
92
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
$282. A portion of these commitments may ultimately be shared with project partners. Total payments under the
agreements were $861 in 2021, $514 in 2020 and $836 in 2019.
Environmental The company is subject to loss contingencies pursuant to laws, regulations, private claims and legal
proceedings related to environmental matters that are subject to legal settlements or that in the future may require the
company to take action to correct or ameliorate the effects on the environment of prior release of chemicals or petroleum
substances by the company or other parties. Such contingencies may exist for various operating, closed and divested sites,
including, but not limited to, U.S. federal Superfund sites and analogous sites under state laws, refineries, chemical plants,
marketing facilities, crude oil fields, and mining sites.
Although the company has provided for known environmental obligations that are probable and reasonably estimable, it is
likely that the company will continue to incur additional liabilities. The amount of additional future costs are not fully
determinable due to such factors as the unknown magnitude of possible contamination, the unknown timing and extent of
the corrective actions that may be required, the determination of the company’s liability in proportion to other responsible
parties, and the extent to which such costs are recoverable from third parties. These future costs may be material to results
of operations in the period in which they are recognized, but the company does not expect these costs will have a material
effect on its consolidated financial position or liquidity.
Chevron’s environmental reserve as of December 31, 2021, was $960. Included in this balance was $230 related to
remediation activities at approximately 145 sites for which the company had been identified as a potentially responsible
party under the provisions of the U.S. federal Superfund law or analogous state laws which provide for joint and several
liability for all responsible parties. Any future actions by regulatory agencies to require Chevron to assume other
potentially responsible parties’ costs at designated hazardous waste sites are not expected to have a material effect on the
company’s results of operations, consolidated financial position or liquidity.
Of the remaining year-end 2021 environmental reserves balance of $730, $466 is related to the company’s U.S.
downstream operations, $50 to its international downstream operations, and $214 to its upstream operations. Liabilities at
all sites were primarily associated with the company’s plans and activities to remediate soil or groundwater contamination
or both.
The company manages environmental liabilities under specific sets of regulatory requirements, which in the United States
include the Resource Conservation and Recovery Act and various state and local regulations. No single remediation site at
year-end 2021 had a recorded liability that was material to the company’s results of operations, consolidated financial
position or liquidity.
Refer to Note 25 Asset Retirement Obligations for a discussion of the company’s asset retirement obligations.
Other Contingencies Chevron receives claims from and submits claims to customers; trading partners; joint venture
partners; U.S. federal, state and local regulatory bodies; governments; contractors; insurers; suppliers; and individuals. The
amounts of these claims, individually and in the aggregate, may be significant and take lengthy periods to resolve, and may
result in gains or losses in future periods.
The company and its affiliates also continue to review and analyze their operations and may close, retire, sell, exchange,
acquire or restructure assets to achieve operational or strategic benefits and to improve competitiveness and profitability.
These activities, individually or together, may result in significant gains or losses in future periods.
Note 25
Asset Retirement Obligations
The company records the fair value of a liability for an asset retirement obligation (ARO) both as an asset and a liability
when there is a legal obligation associated with the retirement of a tangible long-lived asset and the liability can be
reasonably estimated. The legal obligation to perform the asset retirement activity is unconditional, even though
uncertainty may exist about the timing and/or method of settlement that may be beyond the company’s control. This
uncertainty about the timing and/or method of settlement is factored into the measurement of the liability when sufficient
information exists to reasonably estimate fair value. Recognition of the ARO includes: (1) the present value of a liability
and offsetting asset, (2) the subsequent accretion of that liability and depreciation of the asset, and (3) the periodic review
of the ARO liability estimates and discount rates.
AROs are primarily recorded for the company’s crude oil and natural gas producing assets. No significant AROs associated
with any legal obligations to retire downstream long-lived assets have been recognized, as indeterminate settlement dates
Chevron Corporation 2021 Annual Report
93
93
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
for the asset retirements prevent estimation of the fair value of the associated ARO. The company performs periodic
reviews of its downstream long-lived assets for any changes in facts and circumstances that might require recognition of a
retirement obligation.
The following table indicates the changes to the company’s before-tax asset retirement obligations in 2021, 2020 and 2019:
Balance at January 1
Liabilities assumed in the Noble acquisition
Liabilities incurred
Liabilities settled
Accretion expense
Revisions in estimated cash flows
Balance at December 31
$
$
2021
13,616
—
31
(1,887)
616
432
12,808
$
$
2020
12,832 $
630
10
(1,661)
560
1,245
13,616 $
2019
14,050
—
32
(1,694)
628
(184)
12,832
In the table above, the amount associated with “Revisions in estimated cash flows” in 2021 primarily reflects increased cost
estimates and scope changes to decommission wells, equipment and facilities. The long-term portion of the $12,808
balance at the end of 2021 was $11,611.
Note 26
Revenue
Revenue from contracts with customers is presented in “Sales and other operating revenue” along with some activity that is
accounted for outside the scope of Accounting Standard Codification (ASC) 606, which is not material to this line, on the
Consolidated Statement of Income. Purchases and sales of inventory with the same counterparty that are entered into in
contemplation of one another (including buy/sell arrangements) are combined and recorded on a net basis and reported in
“Purchased crude oil and products” on the Consolidated Statement of Income. Refer to Note 14 Operating Segments and
Geographic Data for additional information on the company’s segmentation of revenue.
Receivables related to revenue from contracts with customers are included in “Accounts and notes receivable, net” on the
Consolidated Balance Sheet, net of the allowance for doubtful accounts. The net balance of these receivables was $12,877
and $7,631 at December 31, 2021 and December 31, 2020, respectively. Other items included in “Accounts and notes
receivable, net” represent amounts due from partners for their share of joint venture operating and project costs and
amounts due from others, primarily related to derivatives, leases, buy/sell arrangements and product exchanges, which are
accounted for outside the scope of ASC 606.
Contract assets and related costs are reflected in “Prepaid expenses and other current assets” and contract liabilities are
reflected in “Accrued liabilities” and “Deferred credits and other noncurrent obligations” on the Consolidated Balance
Sheet. Amounts for these items are not material to the company’s financial position.
Note 27
Other Financial Information
Earnings in 2021 included after-tax gains of approximately $785 relating to the sale of certain properties. Of this amount,
approximately $30 and $755 related to downstream and upstream, respectively. Earnings in 2020 included after-tax gains
of approximately $765 relating to the sale of certain properties, of which approximately $30 and $735 related to
downstream and upstream assets, respectively. Earnings in 2019 included after-tax gains of approximately $1,500 relating
to the sale of certain properties, of which approximately $50 and $1,450 related to downstream and upstream assets,
respectively. Earnings in 2021 included after-tax charges of approximately $519 for pension settlement costs, $260 for
early retirement of debt, $120 relating to upstream remediation and $110 relating to downstream legal reserves. Earnings in
2020 included after-tax charges of approximately $4,800 for impairments and other asset write-offs related to upstream.
Earnings in 2019 included after-tax charges of approximately $10,400 for impairments and other asset write-offs related to
upstream.
Chevron Corporation 2021 Annual Report
94
94
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
Other financial information is as follows:
Total financing interest and debt costs
Less: Capitalized interest
Interest and debt expense
Research and development expenses
Excess of replacement cost over the carrying value of inventories (LIFO method)
LIFO profits (losses) on inventory drawdowns included in earnings
Foreign currency effects*
* Includes $180, $(152) and $(28) in 2021, 2020 and 2019, respectively, for the company’s share of equity affiliates’ foreign currency effects.
$
$
$
$
$
$
$
$
$
$
$
$
2021
775
63
712
268
5,588
35
306
38
Year ended December 31
2019
2020
817
735 $
19
798
500
4,513
(9)
(304)
697 $
435 $
2,749 $
(147) $
(645) $
The company has $4,385 in goodwill on the Consolidated Balance Sheet, all of which is in the upstream segment and
primarily related to the 2005 acquisition of Unocal. The company tested this goodwill for impairment during 2021, and no
impairment was required.
Note 28
Financial Instruments - Credit Losses
Chevron’s expected credit loss allowance balance was $745 million as of December 31, 2021 and $671 million as of
December 31, 2020, with a majority of the allowance relating to non-trade receivable balances.
The majority of the company’s receivable balance is concentrated in trade receivables, with a balance of $16.4 billion as of
December 31, 2021, which reflects the company’s diversified sources of revenues and is dispersed across the company’s
broad worldwide customer base. As a result, the company believes the concentration of credit risk is limited. The company
routinely assesses the financial strength of its customers. When the financial strength of a customer is not considered
sufficient, alternative risk mitigation measures may be deployed, including requiring prepayments, letters of credit or other
acceptable forms of collateral. Once credit is extended and a receivable balance exists, the company applies a quantitative
calculation to current trade receivable balances that reflects credit risk predictive analysis, including probability of default
and loss given default, which takes into consideration current and forward-looking market data as well as the company’s
historical loss data. This statistical approach becomes the basis of the company’s expected credit loss allowance for current
trade receivables with payment terms that are typically short-term in nature, with most due in less than 90 days.
Chevron’s non-trade receivable balance was $3.4 billion as of December 31, 2021, which includes receivables from certain
governments in their capacity as joint venture partners. Joint venture partner balances that are paid as per contract terms or
not yet due are subject to the statistical analysis described above while past due balances are subject to additional
qualitative management quarterly review. This management review includes review of reasonable and supportable
repayment forecasts. Non-trade receivables also include employee and tax receivables that are deemed immaterial and low
risk. Loans to equity affiliates and non-equity investees are also considered non-trade and associated allowances of $560
million are included within “Investments and Advances” on the Consolidated Balance Sheet at both December 31, 2021
and December 30, 2020.
Note 29
Acquisition of Noble Energy, Inc.
On October 5, 2020, the company acquired Noble Energy, Inc., an independent oil and gas exploration and production
company. Noble’s principal upstream operations are in the United States, the Eastern Mediterranean and West Africa.
Noble’s operations also include an integrated midstream business in the United States. The acquisition of Noble provides
the company with low-cost proved reserves, attractive undeveloped resources and cash-generating assets.
The aggregate purchase price of Noble was $4,109, with approximately 58 million shares of Chevron common stock issued
as consideration in the transaction, representing approximately 3 percent of shares of Chevron common stock outstanding
immediately after the acquisition. As part of the transaction, the company recognized long-term debt and finance leases
with a fair value of $9,231.
The acquisition was accounted for as a business combination under ASC 805, which requires assets acquired and liabilities
assumed to be measured at their acquisition date fair values. Provisional fair value measurements were made for acquired
assets and liabilities, and adjustments to those measurements may be made in subsequent periods, up to one year from the
acquisition date, as information necessary to complete the analysis is obtained. Oil and gas properties were valued using a
discounted cash flow approach that incorporated internally generated price assumptions and production profiles together
Chevron Corporation 2021 Annual Report
95
95
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts
with appropriate operating cost and development cost assumptions. Debt assumed in the acquisition was valued based on
observable market prices for Noble’s debt. As a result of measuring the assets acquired and the liabilities assumed at fair
value, there was no goodwill or bargain purchase recognized.
The following table summarizes the values assigned to assets acquired and liabilities assumed:
Current assets
Investments and long-term receivables
Properties (includes $14,935 for oil and gas properties)
Other assets
Total assets acquired
Current liabilities
Long-term debt and finance leases
Deferred income taxes
Other liabilities
Total liabilities assumed
Noncontrolling interest and redeemable noncontrolling interest
Net assets acquired
At October 5, 2020
1,105
1,282
16,703
607
19,697
1,829
9,231
2,355
1,394
14,809
779
4,109
$
$
The following unaudited pro forma summary presents the results of operations as if the acquisition of Noble had occurred
January 1, 2019:
Sales and other operating revenues
Net income
$
$
2020
Year ended December 31
2019
144,303
1,412
96,980 $
(9,890) $
The pro forma summary uses estimates and assumptions based on information available at the time. Management believes
the estimates and assumptions to be reasonable; however, actual results may differ significantly from this pro forma
financial information. The pro forma information does not reflect any synergistic savings that might be achieved from
combining the operations and is not intended to reflect the actual results that would have occurred had the companies
actually been combined during the periods presented.
Chevron Corporation 2021 Annual Report
96
96
Supplemental Information on Oil and Gas Producing Activities - Unaudited
In accordance with FASB and SEC disclosure requirements for oil and gas producing activities, this section provides
supplemental information on oil and gas exploration and producing activities of the company in seven separate tables.
Tables I through IV provide historical cost information pertaining to costs incurred in exploration, property acquisitions
and development; capitalized costs; and results of operations. Tables V through VII present information on the company’s
estimated net proved reserve quantities, standardized measure of estimated discounted future net cash flows related to
Table I - Costs Incurred in Exploration, Property Acquisitions and Development1
Millions of dollars
Year Ended December 31, 2021
Exploration
Wells
Geological and geophysical
Other
Total exploration
Property acquisitions2
Proved - Other
Unproved - Other
Total property acquisitions
Development3
Total Costs Incurred4
Year Ended December 31, 2020
Exploration
Wells
Geological and geophysical
Other
Total exploration
Property acquisitions2
Proved - Noble
Proved - Other
Unproved - Noble
Unproved - Other
Total property acquisitions
Development3
Total Costs Incurred4
Year Ended December 31, 2019
Exploration
Wells
Geological and geophysical
Other
Total exploration
Property acquisitions2
Proved
Unproved
Total property acquisitions
Development3
Total Costs Incurred4
Other
U.S. Americas
Africa
Asia Australia
Europe
Total
TCO
Other
Consolidated Companies
Affiliated Companies
$
$
$
184 $
67
80
331
98
13
111
4,360
4,802 $
190 $
83
125
398
31 $
58
80
169
—
16
16
640
825 $
181 $
29
77
287
5 $
40
39
84
15
—
15
383
482 $
1 $
58
42
101
36 $
—
14
50
53
—
53
545
648 $
8 $
3
22
33
3,463
23
2,845
35
6,366
4,622
$ 11,386 $
—
—
2
—
2
740
1,029 $
438
2
113
10
563
386
1,050 $
7,945
56
129
—
8,130
1,034
9,197 $
$
571 $
82
140
793
81
68
149
44 $
9 $
118
52
214
34
150
184
21
35
65
—
—
—
2 $
5
29
36
93
17
110
— $
22
25
47
—
—
—
526
573 $
1 $
12
39
52
—
—
—
—
—
753
805 $
4 $
11
44
59
—
1
1
— $
—
1
1
—
—
—
44
45 $
— $
—
2
2
256
187
239
682
166
29
195
6,498
7,375
381
185
307
873
11,846
—
81
—
3,089
—
45
—
15,061
—
37
7,572
39 $ 23,506
4 $
1
6
11
634
238
306
1,178
—
—
—
208
236
444
$
$
$
$
$
— $
—
—
—
—
—
—
2,442
2,442 $
— $
—
—
—
—
—
—
—
—
2,998
2,998 $
— $
—
—
—
—
—
—
—
—
—
—
—
—
—
27
27
—
—
—
—
—
—
—
—
—
81
81
—
—
8
8
—
—
—
7,072
8,014 $
1,216
1,614 $
$
279
344 $
1,020
1,166 $
518
578 $
199
10,304
210 $ 11,926
5,112
5,112 $
$
158
166
1 Includes costs incurred whether capitalized or expensed. Excludes general support equipment expenditures. Includes capitalized amounts related to asset retirement
obligations. See Note 25 Asset Retirement Obligations.
2 Includes wells, equipment and facilities associated with proved reserves. Does not include properties acquired in nonmonetary transactions.
3 Includes $298, $897 and $246 of costs incurred on major capital projects prior to assignment of proved reserves for consolidated companies in 2021, 2020, and 2019,
respectively.
4 Reconciliation of consolidated and affiliated companies total cost incurred to Upstream capital and exploratory (C&E) expenditures - $ billions:
Total cost incurred
Noble acquisition
Non-oil and gas activities
ARO reduction/(build)
Upstream C&E
2021
9.8
—
0.2
(0.4)
9.6
2020
$ 26.6
(14.9)
—
(0.8)
$ 10.9
$
$
2019
$ 17.2
— See Note 29 for additional information
0.3 (Primarily; LNG and transportation activities.)
0.3
$ 17.8 Reference page 45 Upstream total
Chevron Corporation 2021 Annual Report
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Supplemental Information on Oil and Gas Producing Activities - Unaudited
proved reserves, and changes in estimated discounted future net cash flows. The amounts for consolidated companies are
organized by geographic areas including the United States, Other Americas, Africa, Asia, Australia/Oceania and Europe.
Amounts for affiliated companies include Chevron’s equity interests in Tengizchevroil (TCO) in the Republic of
Kazakhstan and in other affiliates, principally in Venezuela and Angola. Refer to Note 15 Investments and Advances for a
discussion of the company’s major equity affiliates.
Table II - Capitalized Costs Related to Oil and Gas Producing Activities
Other
U.S. Americas
Africa
Asia Australia
Europe
Total
TCO
Other
Consolidated Companies
Affiliated Companies
$
3,302 $
2,382 $
191 $
982 $
1,987 $
— $
8,844
$
108 $
—
80,821
22,031
47,030
46,379
2,134
328
6,581
198
121
431
1,096
196
1,096
906
246
903
22,235
18,918
1,144
1,586
—
74
24
23,252
2,109
10,621
2,156
220,652
14,635
1,558
Millions of dollars
At December 31, 2021
Unproved properties
Proved properties and
related producing assets
Support equipment
Deferred exploratory wells
Other uncompleted projects
Accumulated provisions
Net Capitalized Costs
At December 31, 2020
Unproved properties
Proved properties and
related producing assets
Support equipment
Deferred exploratory wells
Other uncompleted projects
Accumulated provisions
Net Capitalized Costs
At December 31, 2019
Unproved properties
Proved properties and
related producing assets
Support equipment
Deferred exploratory wells
Other uncompleted projects
Gross Capitalized Costs
93,166
25,163
49,609
49,416
45,870
2,254
265,478
Unproved properties valuation
289
1,536
131
855
110
—
2,921
Proved producing properties –
Depreciation and depletion
55,064
11,745
37,657
33,300
Support equipment depreciation
1,681
155
778
623
8,920
3,724
602
147,288
—
6,961
57,034
13,436
38,566
34,778
12,754
602
157,170
$ 36,132 $ 11,727 $ 11,043 $ 14,638 $ 33,116 $
1,652 $ 108,308
$ 25,814 $
1,075
$
3,519 $
2,438 $
188 $
984 $
1,987 $
— $
9,116
$
108 $
—
81,573
24,108
46,637
58,086
1,882
411
5,549
197
142
582
1,087
202
1,030
2,042
505
803
22,321
18,898
1,144
1,157
2,117
234,842
—
108
20
24,106
2,512
9,141
Gross Capitalized Costs
92,934
27,467
49,144
62,420
45,507
2,245
279,717
Unproved properties valuation
179
1,471
126
856
110
—
2,742
Proved producing properties –
Depreciation and depletion
55,839
13,141
35,899
42,354
Support equipment depreciation
1,002
159
742
1,644
7,541
2,965
498
155,272
—
6,512
57,020
14,771
36,767
44,854
10,616
498
164,526
$ 35,914 $ 12,696 $ 12,377 $ 17,566 $ 34,891 $
1,747 $ 115,191
$ 24,281 $
1,078
$
4,620 $
2,492 $
151 $
1,081 $
1,986 $
— $ 10,330
$
108 $
—
82,199
24,189
45,756
56,648
2,287
533
5,080
311
147
505
1,098
405
1,176
2,075
513
926
22,032
18,610
1,322
1,023
2,082
232,906
—
121
15
24,381
3,041
8,725
Gross Capitalized Costs
94,719
27,644
48,586
61,243
44,973
2,218
279,383
Unproved properties valuation
3,964
1,271
120
842
109
—
6,306
Proved producing properties –
Depreciation and depletion
56,911
12,644
33,613
44,871
Support equipment depreciation
1,635
226
772
1,605
62,510
14,141
34,505
47,318
6,064
2,272
8,445
404
154,507
—
6,510
404
167,323
Accumulated provisions
Net Capitalized Costs
582
—
19,382
34,707
70
8,461
362
8,893
—
—
31
1,589
—
514
—
514
11,326
2,023
—
18,806
32,263
67
6,746
1,169
7,982
1,548
—
—
23
1,571
—
493
—
493
10,757
1,981
—
16,503
29,349
65
6,018
1,053
7,136
4,311
—
—
743
5,054
—
1,912
—
1,912
$ 32,209 $ 13,503 $ 14,081 $ 13,925 $ 36,528 $
1,814 $ 112,060
$ 22,213 $
3,142
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Supplemental Information on Oil and Gas Producing Activities - Unaudited
Table III - Results of Operations for Oil and Gas Producing Activities1
The company’s results of operations from oil and gas producing activities for the years 2021, 2020 and 2019 are shown in
the following table. Net income (loss) from exploration and production activities as reported on page 75 reflects income
taxes computed on an effective rate basis.
Income taxes in Table III are based on statutory tax rates, reflecting allowable deductions and tax credits. Interest income
and expense are excluded from the results reported in Table III and from the net income amounts on page 75.
Other
U.S. Americas
Africa
Asia Australia
Europe
Total
TCO
Other
Consolidated Companies
Affiliated Companies
Millions of dollars
Year Ended December 31, 2021
Revenues from net production
Sales
Transfers
Total
868
—
868
(20)
—
(3)
—
—
(332)
298
29
327
288
—
288
(98)
(30)
$
6,708 $
888 $
1,283 $
5,127 $
3,725 $
371 $ 18,102
$
5,564 $
12,653
19,361
3,029
3,917
5,232
6,515
3,019
8,146
Production expenses excluding taxes
(4,325)
(974)
(1,414)
(2,156)
Taxes other than on income
(928)
(73)
(88)
(15)
Proved producing properties:
3,858
7,583
(548)
(260)
—
371
27,791
45,893
(67)
(9,484)
(4)
(1,368)
—
5,564
(487)
(359)
Depreciation and depletion
(5,184)
(1,470)
(1,797)
(3,324)
(2,409)
(105)
(14,289)
(947)
(215)
Accretion expense2
Exploration expenses
Unproved properties valuation
Other income (expense)3
Results before income taxes
(197)
(221)
(43)
990
9,453
(22)
(144)
(113)
(132)
(95)
(33)
(83)
(5)
(72)
(20)
—
(124)
(75)
(47)
—
26
(13)
(35)
—
2
(564)
(538)
(143)
789
(7)
—
—
98
1,118
2,912
2,394
4,270
149
20,296
3,862
Income tax (expense) benefit
(2,108)
(318)
(1,239)
(1,326)
(1,314)
(38)
(6,343)
(1,161)
Results of Producing Operations
$
7,345 $
800 $
1,673 $
1,068 $
2,956 $
111 $ 13,953
$
2,701 $
Year Ended December 31, 2020
Revenues from net production
Sales
Transfers
Total
$
1,665 $
505 $
473 $
5,629 $
3,010 $
149 $ 11,431
$
3,088 $
7,711
9,376
1,683
2,188
3,378
3,851
1,092
6,721
1,830
4,840
(589)
(121)
—
149
15,694
27,125
(64)
(9,460)
(2)
(870)
—
3,088
(419)
(190)
Production expenses excluding taxes
(3,933)
(981)
(1,485)
(2,408)
Taxes other than on income
(597)
(62)
(77)
(11)
Proved producing properties:
Depreciation and depletion
(6,482)
(1,221)
(2,323)
(3,466)
(2,192)
(92)
(15,776)
(879)
(146)
Accretion expense2
Exploration expenses
Unproved properties valuation
Other income (expense)3
(165)
(457)
(58)
51
(22)
(314)
(215)
(8)
(136)
(431)
(6)
(11)
Results before income taxes
(2,265)
(635)
(618)
(120)
(67)
(8)
1,053
1,694
(62)
(231)
(1)
(2)
(10)
(515)
(15)
(1,515)
—
(288)
(9)
1,074
(9)
—
—
(6)
1
—
(29)
(2,103)
1,642
(43)
(225)
1,562
(2,094)
Income tax (expense) benefit
558
(5)
888
(353)
(558)
12
Results of Producing Operations
$
(1,707) $
(640) $
270 $
1,341 $
1,084 $
(31) $
542
317
(471)
161
$
1,091 $
(1,933)
1 The value of owned production consumed in operations as fuel has been eliminated from revenues and production expenses, and the related volumes have been deducted
from net production in calculating the unit average sales price and production cost. This has no effect on the results of producing operations.
2 Represents accretion of ARO liability. Refer to Note 25 Asset Retirement Obligations.
3
Includes foreign currency gains and losses, gains and losses on property dispositions and other miscellaneous income and expenses.
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Supplemental Information on Oil and Gas Producing Activities - Unaudited
Table III - Results of Operations for Oil and Gas Producing Activities1, continued
Other
U.S. Americas
Africa
Asia Australia
Europe
Total
TCO
Other
Consolidated Companies
Affiliated Companies
Millions of dollars
Year Ended December 31, 2019
Revenues from net production
Sales
Transfers
Total
Proved producing properties:
Depreciation and depletion
Accretion expense2
Exploration expenses
Unproved properties valuation
Other income (expense)3
Results before income taxes
Income tax (expense) benefit
780
—
780
(247)
(10)
(8)
(8)
—
(157)
139
(73)
66
$
2,259 $
863 $
668 $
7,410 $
4,332 $
592 $ 16,124
$
5,603 $
11,043
13,302
2,160
3,023
6,534
7,202
1,311
8,721
Production expenses excluding taxes
Taxes other than on income
(3,567)
(595)
(1,020)
(64)
(1,460)
(101)
(2,703)
(16)
2,596
6,928
(616)
(221)
655
1,247
(343)
(2)
24,299
40,423
(9,709)
(999)
—
5,603
(475)
(57)
(11,659)
(1,380)
(2,548)
(3,165)
(2,192)
(85)
(21,029)
(870)
(211)
(191)
(293)
(3,268)
(51)
(6,322)
1,311
(21)
(211)
(591)
(44)
(308)
(148)
(73)
(2)
(121)
(133)
(93)
(388)
413
(53)
(60)
(2)
53
2,749
2,636
3,837
(37)
(10)
—
1,373
2,143
(583)
(740)
(4,251)
1,623
4,735
(27)
(1,731)
(1,212)
(1,161)
(311)
(3,131)
(5)
—
(4)
1
4,193
(1,261)
Results of Producing Operations
$
(5,011) $
(335) $
1,018 $
1,424 $
2,676 $
1,832 $
1,604
$
2,932 $
1 The value of owned production consumed in operations as fuel has been eliminated from revenues and production expenses, and the related volumes have been deducted
from net production in calculating the unit average sales price and production cost. This has no effect on the results of producing operations.
2 Represents accretion of ARO liability. Refer to Note 25 Asset Retirement Obligations.
3
Includes foreign currency gains and losses, gains and losses on property dispositions and other miscellaneous income and expenses.
Table IV - Results of Operations for Oil and Gas Producing Activities - Unit Prices and Costs1
Other
U.S. Americas
Africa
Asia Australia
Europe
Total
TCO
Other
Consolidated Companies
Affiliated Companies
Year Ended December 31, 2021
Average sales prices
Crude, per barrel
Natural gas liquids, per barrel
Natural gas, per thousand cubic feet
Average production costs, per barrel2
Year Ended December 31, 2020
Average sales prices3
Crude, per barrel
$
65.16 $
62.84 $
72.38 $
63.71 $
71.40 $
69.20 $
66.14
$
58.31 $
—
28.54
3.02
10.45
26.33
3.39
13.91
39.40
2.66
12.40
—
4.10
10.52
30.00
8.22
3.65
—
29.10
27.13
66.00
12.50
13.40
5.08
9.90
0.47
4.09
9.71
1.25
$
36.28 $
35.80 $
38.89 $
39.77 $
37.82 $
34.20 $
37.41
$
25.39 $
25.22
9.97
0.96
10.01
11.79
2.20
14.27
20.51
1.61
13.19
Natural gas liquids, per barrel
Natural gas, per thousand cubic feet
Average production costs, per barrel2
Year Ended December 31, 2019
Average sales prices3
Crude, per barrel
Natural gas liquids, per barrel
Natural gas, per thousand cubic feet
Average production costs, per barrel2
1 The value of owned production consumed in operations as fuel has been eliminated from revenues and production expenses, and the related volumes have been deducted
61.80 $
—
4.43
14.28
59.53 $
—
4.73
12.74
63.94 $
24.00
1.84
11.90
57.58 $
11.22
1.07
10.48
57.50 $
7.50
2.24
15.97
60.15 $
—
7.54
4.08
50.85 $
18.57
0.79
3.53
59.43
12.60
4.86
10.62
40.97
5.42
4.02
10.58
0.54
3.17
11.11
3.68
10.07
—
4.30
11.24
—
1.07
13.23
$
$
47.58
31.94
0.99
7.93
22.52
0.61
3.91
from net production in calculating the unit average sales price and production cost. This has no effect on the results of producing operations.
2 Natural gas converted to oil-equivalent gas (OEG) barrels at a rate of 6 MCF = 1 OEG barrel.
3 2020 and 2019 unit prices have been conformed to current presentation. Crude and NGL realizations were previously combined and disclosed as liquids.
Chevron Corporation 2021 Annual Report
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Supplemental Information on Oil and Gas Producing Activities - Unaudited
Table V Proved Reserve Quantity Information*
Summary of Net Oil and Gas Reserves
Liquids in Millions of Barrels
2021
2020
2019
Natural Gas in Billions
of Cubic Feet
Proved Developed
Consolidated Companies
U.S.
Other Americas
Africa
Asia
Australia
Europe
Total Consolidated
Affiliated Companies
TCO
Other
Total Consolidated and
Affiliated Companies
Proved Undeveloped
Consolidated Companies
U.S.
Other Americas
Africa
Asia
Australia
Europe
Total Consolidated
Affiliated Companies
TCO
Other
Total Consolidated and
Affiliated Companies
Total Proved Reserves
Crude Oil
Condensate
Synthetic
Oil NGL
Natural
Gas
Crude Oil
Condensate
Synthetic
Oil NGL
Natural
Gas
Crude Oil
Condensate
Synthetic
Oil NGL
Natural
Gas
1,177
181
428
270
102
24
2,182
555
3
—
471
—
—
—
—
471
421
7
77
—
3
—
508
3,136
259
1,884
7,007
8,057
8
20,351
—
—
52
13
1,059
310
1,157
168
497
358
115
23
2,318
565
2
—
597
—
—
—
—
597
346
6
68
—
4
—
424
2,503
222
1,629
7,864
8,951
8
21,177
—
—
53
12
1,057
322
1,121
174
525
406
136
21
2,383
584
114
—
540
—
—
—
—
540
258
5
67
—
4
—
334
2,998
397
1,472
3,382
10,697
8
18,954
—
—
59
10
1,135
308
2,740
471
573
21,720
2,885
597
489
22,556
3,081
540
403
20,397
887
107
52
52
32
38
1,168
695
1
1,864
4,604
—
—
—
—
—
—
—
—
—
391
8
28
—
—
—
427
2,749
196
912
466
3,627
13
7,963
32
6
642
583
593
92
57
45
26
38
851
985
1
—
—
—
—
—
—
—
—
—
247
2
36
—
—
—
285
1,747
107
1,208
319
2,434
14
5,829
49
5
961
576
—
471
465
1,038
9,188
30,908
1,837
4,722
—
597
339
828
7,366
29,922
807
146
88
107
30
48
1,226
889
45
2,160
5,241
—
—
—
—
—
—
—
244
11
33
—
—
—
288
1,730
339
1,286
299
3,961
18
7,633
—
—
44
5
869
558
—
540
337
740
9,060
29,457
*Throughout Table V, some totals and percentages may not exactly agree with the sum of their component parts because of rounding.
Reserves Governance The company has adopted a comprehensive reserves and resources classification system modeled
after a system developed and approved by a number of organizations, including the Society of Petroleum Engineers, the
World Petroleum Congress and the American Association of Petroleum Geologists. The company classifies discovered
recoverable hydrocarbons into six categories based on their status at the time of reporting – three deemed commercial and
three potentially recoverable. Within the commercial classification are proved reserves and two categories of unproved
reserves: probable and possible. The potentially recoverable categories are also referred to as contingent resources. For
reserves estimates to be classified as proved, they must meet all SEC and company standards.
Proved oil and gas reserves are the estimated quantities that geoscience and engineering data demonstrate with reasonable
certainty to be economically producible in the future from known reservoirs under existing economic conditions, operating
methods and government regulations. Net proved reserves exclude royalties and interests owned by others and reflect
contractual arrangements and royalty obligations in effect at the time of the estimate.
Proved reserves are classified as either developed or undeveloped. Proved developed reserves are the quantities expected to
be recovered through existing wells with existing equipment and operating methods, or in which the cost of the required
equipment is relatively minor compared to the cost of a new well. Proved undeveloped reserves are the quantities expected
to be recovered from new wells on undrilled acreage or from existing wells where a relatively major expenditure is
required for recompletion.
Due to the inherent uncertainties and the limited nature of reservoir data, estimates of reserves are subject to change as
additional information becomes available.
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Supplemental Information on Oil and Gas Producing Activities - Unaudited
Proved reserves are estimated by company asset teams composed of earth scientists and engineers. As part of the internal
control process related to reserves estimation, the company maintains a Reserves Advisory Committee (RAC) that is
chaired by the Manager of Global Reserves, an organization that is separate from the upstream operating organization. The
Manager of Global Reserves has more than 30 years of experience working in the oil and gas industry and holds both
undergraduate and graduate degrees in geoscience. His experience includes various technical and management roles in
providing reserve and resource estimates in support of major capital and exploration projects, and more than 10 years of
overseeing oil and gas reserves processes. He has been named a Distinguished Lecturer by the American Association of
Petroleum Geologists and is an active member of the American Association of Petroleum Geologists, the SEPM Society of
Sedimentary Geologists and the Society of Petroleum Engineers.
All RAC members are degreed professionals, each with more than 10 years of experience in various aspects of reserves
estimation relating to reservoir engineering, petroleum engineering, earth science or finance. The members are
knowledgeable in SEC guidelines for proved reserves classification and receive annual training on the preparation of
reserves estimates.
The RAC has the following primary responsibilities: establish the policies and processes used within the business units to
estimate reserves; provide independent reviews and oversight of the business units’ recommended reserves estimates and
changes; confirm that proved reserves are recognized in accordance with SEC guidelines; determine that reserve quantities
are calculated using consistent and appropriate standards, procedures and technology; and maintain the Chevron
Corporation Reserves Manual, which provides standardized procedures used corporatewide for classifying and reporting
hydrocarbon reserves.
During the year, the RAC is represented in meetings with each of the company’s upstream business units to review and
discuss reserve changes recommended by the various asset teams. Major changes are also reviewed with the company’s
senior leadership team including the Chief Executive Officer and the Chief Financial Officer. The company’s annual
reserve activity is also reviewed with the Board of Directors. If major changes to reserves were to occur between the annual
reviews, those matters would also be discussed with the Board.
RAC subteams also conduct in-depth reviews during the year of many of the fields that have large proved reserves
quantities. These reviews include an examination of the proved reserve records and documentation of their compliance
with the Chevron Corporation Reserves Manual.
Technologies Used in Establishing Proved Reserves Additions In 2021, additions to Chevron’s proved reserves were
based on a wide range of geologic and engineering technologies. Information generated from wells, such as well logs, wire
line sampling, production and pressure testing, fluid analysis, and core analysis, was integrated with seismic data, regional
geologic studies, and information from analogous reservoirs to provide “reasonably certain” proved reserves estimates.
Both proprietary and commercially available analytic tools, including reservoir simulation, geologic modeling and seismic
processing, have been used in the interpretation of the subsurface data. These technologies have been utilized extensively
by the company in the past, and the company believes that they provide a high degree of confidence in establishing reliable
and consistent reserves estimates.
Proved Undeveloped Reserves
Noteworthy changes in proved undeveloped reserves are shown in the table below and discussed on the following page.
Proved Undeveloped Reserves (Millions of BOE)
Quantity at January 1
Revisions
Improved recovery
Extension and discoveries
Purchases
Sales
Transfers to proved developed
Quantity at December 31
2021
3,404
131
9
658
36
(7)
(371)
3,860
In 2021, revisions include an increase of 202 million BOE in Australia, primarily from the approval of the Jansz Io
Compression project (Gorgon and Jansz Io make up the Gorgon Project). In the United States, there was a net increase of
192 million BOE primarily from the Midland and Delaware basins, where 105 million BOE was attributed to improved
commodity price environment, and performance revisions, and 91 million BOE associated with the Anchor Project in the
Gulf of Mexico due to improved commodity price. In Bangladesh, there was an increase of 30 million BOE, primarily from
Chevron Corporation 2021 Annual Report
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Supplemental Information on Oil and Gas Producing Activities - Unaudited
the approval of the Bibiyana Optimization Project and entitlement effects. These increases were partially offset by a
decrease of 339 million BOE in Kazakhstan, primarily at TCO, which includes entitlement effects, changes in field
operating assumptions, reservoir model changes and changes to the FGP/WPMP schedule.
In 2021, extensions and discoveries of 630 million BOE in the United States were primarily due to the increase of activity
and planned development of new locations in shale and tight assets in the Midland and Delaware basins.
The difference in 2021 extensions and discoveries of 149 million BOE, between the net quantities of proved reserves of
807 million BOE as reflected on pages 105 to 107 and net quantities of proved undeveloped reserves of 658 million BOE,
is primarily due to proved Extensions and Discoveries that were not recognized as proved undeveloped reserves in the prior
year and were recognized directly as proved developed reserves in 2021.
Purchases of 36 million BOE in 2021 are from the acquisition of various properties in the Midland and Delaware basins in
the United States.
Transfers to proved developed reserves in 2021 include 245 million BOE in the United States, primarily from the Midland,
Delaware and DJ basin developments and 125 million BOE in Equatorial Guinea, Canada, and other international
locations. These transfers are the consequence of development expenditures on completing wells and facilities.
During 2021, investments totaling approximately $6.6 billion in oil and gas producing activities and about $0.1 billion in
non-oil and gas producing activities were expended to advance the development of proved undeveloped reserves. The
United States accounted for about $2.8 billion related primarily to various development activities in the Midland and
Delaware basins and the Gulf of Mexico. In Asia, expenditures during the year totaled approximately $2.5 billion,
primarily related to development projects of TCO in Kazakhstan. An additional $0.4 billion were spent on development
activities in Australia. In Africa, about $0.4 billion was expended on various offshore development and natural gas projects
in Nigeria, Angola and Republic of Congo. Development activities in Canada and other international locations were
primarily responsible for about $0.5 billion of expenditures.
Reserves that remain proved undeveloped for five or more years are a result of several factors that affect optimal project
development and execution. These factors may include the complex nature of the development project in adverse and
remote locations, physical limitations of infrastructure or plant capacities that dictate project timing, compression projects
that are pending reservoir pressure declines, and contractual limitations that dictate production levels.
At year-end 2021, the company held approximately 1.6 billion BOE of proved undeveloped reserves that have remained
undeveloped for five years or more. The majority of these reserves are in locations where the company has a proven track
record of developing major projects. In Australia, approximately 400 million BOE remain undeveloped for five years or
more related to the Gorgon and Wheatstone Projects. Further field development to convert the remaining proved
undeveloped reserves is scheduled to occur in line with operating constraints and infrastructure optimization. In Africa,
approximately 200 million BOE have remained undeveloped for five years or more, primarily due to facility constraints at
various fields and infrastructure associated with the Escravos gas projects in Nigeria. Affiliates account for about 950
million BOE of proved undeveloped reserves with about 900 million BOE that have remained undeveloped for five years
or more. Approximately 800 million BOE are related to TCO in Kazakhstan and about 100 million BOE are related to
Angola LNG. At TCO and Angola LNG, further field development to convert the remaining proved undeveloped reserves
is scheduled to occur in line with reservoir depletion and facility constraints.
Annually, the company assesses whether any changes have occurred in facts or circumstances, such as changes to
development plans, regulations, or government policies, that would warrant a revision to reserve estimates. In 2021,
improvements in commodity prices positively impacted the economic limits of oil and gas properties, resulting in proved
reserve increases, and negatively impacted proved reserves due to entitlement effects. The year-end reserves quantities
have been updated for these circumstances and significant changes have been discussed in the appropriate reserves
sections. Over the past three years, the ratio of proved undeveloped reserves to total proved reserves has ranged between 31
percent and 35 percent.
Proved Reserve Quantities For the three years ending December 31, 2021, the pattern of net reserve changes shown in the
following tables are not necessarily indicative of future trends. Apart from acquisitions, the company’s ability to add
proved reserves can be affected by events and circumstances that are outside the company’s control, such as delays in
government permitting, partner approvals of development plans, changes in oil and gas prices, OPEC constraints,
geopolitical uncertainties, and civil unrest.
Chevron Corporation 2021 Annual Report
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Supplemental Information on Oil and Gas Producing Activities - Unaudited
At December 31, 2021, proved reserves for the company were 11.3 billion BOE. The company’s estimated net proved
reserves of liquids including crude oil, condensate and synthetic oil for the years 2019, 2020 and 2021 are shown in the
table on page 105. The company’s estimated net proved reserves of natural gas liquids are shown on page 106 and the
company’s estimated net proved reserves of natural gas are shown on page 107.
Noteworthy changes in crude oil, condensate and synthetic oil proved reserves for 2019 through 2021 are discussed below
and shown in the table on the following page:
Revisions In 2019, portfolio optimizations, where future drilling in various fields in the Midland and Delaware basins is
being targeted away from reservoirs with higher gas-to-oil ratios and lower execution efficiencies, and planned divestments
in the Appalachian basin, were primarily responsible for the 153 million barrels decrease in the United States. Operational
issues with the Petropiar upgrader in Venezuela resulted in a decrease in reserves of synthetic oil of 126 million barrels and
an increase of crude oil and condensate reserves of 105 million barrels. Reservoir management and entitlement effects were
mainly responsible for the 75 million barrels increase at TCO in Kazakhstan. Improved field performance at various fields,
including Moho-Bilondo in the Republic of Congo, Mafumeira in Angola, and Sonam in Nigeria, were responsible for the
42 million barrels increase in Africa.
In 2020, capital reductions and commodity price effects in the Midland and Delaware basins and Anchor in the Gulf of
Mexico, were primarily responsible for the 279 million barrels decrease in the United States. Reserves in Venezuela
affiliates decreased by 149 million barrels, primarily due to impairments and accounting methodology change. Entitlement
effects and performance revisions in TCO were primarily responsible for the 180 million barrels increase. Entitlement
effects primarily contributed to an increase of 77 million barrels synthetic oil at the Athabasca Oil Sands in Canada and 74
million barrels at multiple locations in Asia.
In 2021, the 206 million barrels increase in United States was primarily in the Gulf of Mexico and the Midland and
Delaware basins. The higher commodity price environment led to the increase of 126 million barrels in the Gulf of Mexico
primarily from Anchor and a 68 million barrels increase in Midland and Delaware basins due to higher planned
development activity. In TCO, entitlement effects and technical changes in field operating assumptions, reservoir model,
and project schedule were primarily responsible for the 208 million barrels decrease in Kazakhstan. Entitlement effects
primarily contributed to a decrease of 106 million barrels of synthetic oil at the Athabasca Oil Sands project in Canada. In
the Other Americas, performance revisions and price effects, mainly in Canada and Argentina, were primarily responsible
for the 41 million barrels increase.
Extensions and Discoveries In 2019, portfolio optimizations, where future drilling in various fields in the Midland and
Delaware basins is being targeted towards liquids-rich reservoirs with higher execution efficiencies, and extensions and
discoveries in the deepwater fields in the Gulf of Mexico, were primarily responsible for the 394 million barrels increase in
the United States. Extensions and discoveries in Loma Campana in Argentina were primarily responsible for the 39 million
barrels increase in Other Americas.
In 2020, extensions and discoveries in the Midland and Delaware basins were primarily responsible for the 105 million
barrels increase in the United States.
In 2021, extensions and discoveries in the Midland and Delaware basins, and at the Whale Project in the Gulf of Mexico,
were primarily responsible for the 349 million barrels increase in the United States.
Purchases In 2020, the acquisition of Noble assets contributed 227 million barrels in the DJ basin, Midland and Delaware
basins in the United States.
Sales In 2019, sales of 69 million barrels in Europe were in the United Kingdom and Denmark.
In 2020, sales of 99 million barrels in Asia were in Azerbaijan.
In 2021, sales of 32 million barrels in the United States were in the Midland and Delaware basins.
Chevron Corporation 2021 Annual Report
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Supplemental Information on Oil and Gas Producing Activities - Unaudited
Net Proved Reserves of Crude Oil, Condensate and Synthetic Oil
Millions of barrels
U.S. Americas1 Africa Asia Australia Europe
Other
Synthetic
Oil2
Synthetic
Total
TCO
Oil Other3
Consolidated Companies
Affiliated Companies
Total
Consolidated
and Affiliated
Companies
1,874
341
678
579
156
146
545
4,319
1,504
127
67
6,017
Reserves at January 1, 2019
Changes attributable to:
Revisions
Improved recovery
Extensions and discoveries
Purchases
Sales
Production
Reserves at December 31, 20194
Changes attributable to:
Revisions
Improved recovery
Extensions and discoveries
Purchases
Sales
Production
Reserves at December 31, 20204
Changes attributable to:
Revisions
Improved recovery
Extensions and discoveries
Purchases
Sales
Production
(153)
7
394
19
—
(213)
1,928
(279)
1
105
227
(11)
(221)
1,750
206
—
349
26
(32)
(235)
320
613
513
166
42
(25)
—
—
1
39
2
—
(4) —
19
—
1
—
—
(33) (108) (86)
(25)
1
3
—
—
(39)
11
—
1
21
—
74
—
—
10
(99)
(92) (95)
6
—
2
—
25
—
1
—
—
(16)
(69)
(16)
69
(4)
(11)
—
1
—
—
(15)
—
—
—
—
(4)
61
260
554
403
141
(8)
41
9
16
—
—
(38)
10
—
—
—
—
—
—
2
(1)
(84) (74)
6
—
—
—
—
8
—
—
—
—
(15)
(5)
14
(72)
—
7
—
438
—
21
(73)
—
(19) (491)
75
—
—
—
—
(106)
(126) 105
—
—
—
—
(13)
—
—
—
—
(1)
(18)
7
438
21
(73)
(611)
540
4,149
1,473
—
159
5,781
(157)
77
2
—
110
—
258
—
(110)
—
(20) (486)
180
—
—
—
—
(103)
597
3,766
1,550
(106) 157
9
—
365
—
28
—
—
(33)
(20) (471)
(208)
—
—
—
—
(92)
—
—
—
—
—
—
—
—
—
—
—
—
—
(149)
—
—
—
—
(7)
(126)
2
110
258
(110)
(596)
3
5,319
2
—
—
—
—
(1)
(49)
9
365
28
(33)
(564)
4
5,075
Reserves at December 31, 20214
1 Ending reserve balances in North America were 183, 166 and 230 and in South America were 105, 94 and 90 in 2021, 2020 and 2019, respectively.
2 Reserves associated with Canada.
3 Ending reserve balances in Africa were 4, 3 and 3 and in South America were 0, 0 and 156 in 2021, 2020 and 2019, respectively.
4
3,821
480
1,250
2,064
322
134
288
471
62
—
Included are year-end reserve quantities related to production-sharing contracts (PSC) (refer to glossary of energy and financial terms for the definition of a PSC). PSC-
related reserve quantities are 7 percent, 9 percent and 11 percent for consolidated companies for 2021, 2020 and 2019, respectively.
Noteworthy changes in natural gas liquids proved reserves for 2019 through 2021 are discussed below and shown in the
table on the following page:
Revisions In 2019, portfolio optimizations and low price realizations in various fields in the Midland and Delaware basins
and planned divestments in the Appalachian basin were mainly responsible for the 120 million barrels decrease in the
United States.
In 2020, capital reductions and commodity price effects in various fields in Midland and Delaware basins were primarily
responsible for the 71 million barrels decrease in the United States.
In 2021, higher commodity prices resulting in the increase of planned development activity in the Midland and Delaware
basins were primarily responsible for the 107 million barrels increase in the United States.
Extensions and Discoveries In 2019, extensions and discoveries in the Midland and Delaware basins and deepwater fields
in the Gulf of Mexico were primarily responsible for the 140 million barrels increase in the United States.
In 2020, extensions and discoveries in various fields in Midland and Delaware basins were primarily responsible for the 60
million barrels increase in the United States.
In 2021, extensions and discoveries in the Midland and Delaware basins were primarily responsible for the 190 million
barrels increase in the United States.
Purchases In 2020, the acquisition of Noble assets contributed 198 million barrels primarily in the DJ basin, Midland and
Delaware basins and Eagle Ford Shale in the United States.
Chevron Corporation 2021 Annual Report
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Supplemental Information on Oil and Gas Producing Activities - Unaudited
Net Proved Reserves of Natural Gas Liquids
Millions of barrels
Reserves at January 1, 2019
Changes attributable to:
Revisions
Improved recovery
Extensions and discoveries
Purchases
Sales
Production
Reserves at December 31, 20193
Changes attributable to:
Revisions
Improved recovery
Extensions and discoveries
Purchases
Sales
Production
Reserves at December 31, 20203
Changes attributable to:
Revisions
Improved recovery
Extensions and discoveries
Purchases
Sales
Production
Consolidated Companies
Affiliated
Companies
Other
U.S. Americas1
528
22
Africa
Asia Australia Europe
98 —
5
3
Total
656
TCO Other2
16
101
Total
Consolidated
and Affiliated
Companies
773
(120)
—
140
5
—
(51)
502
(71)
—
60
198
(27)
(69)
593
(4)
6 —
— — —
— — —
— — —
— — —
(4) —
(2)
100 —
16
(7)
(3) —
— — —
1 — —
12 —
—
(5) —
104 —
—
—
(2)
8
— —
(118)
— — —
140
— —
5
— —
(2)
(2)
—
(59)
(1)
(1)
622
4 —
10
2
— —
— —
— —
— —
(3)
(8)
15
103
— —
(81)
— — —
61
— —
210
— —
(27)
— —
(76)
— —
709
4 —
5
8
— —
— —
— —
— —
(3)
(9)
17
102
(106)
—
140
5
(2)
(70)
740
(68)
—
61
210
(27)
(88)
828
107
—
190
8
(8)
(78)
812
5
8 —
— — —
4 — —
— — —
— — —
(6) —
(2)
106 —
15
— —
120
— — —
194
— —
8
— —
(8)
— —
(87)
(1) —
936
3 —
(10)
4
— —
— —
— —
— —
(3)
(8)
18
84
114
—
194
8
(8)
(98)
1,038
Reserves at December 31, 20213
1 Reserves associated with North America.
2 Reserves associated with Africa.
3 Year-end reserve quantities related to production-sharing contracts (PSC) (refer to glossary of energy and financial terms for the definition of a PSC) are not material for
2021, 2020 and 2019, respectively.
Noteworthy changes in natural gas proved reserves for 2019 through 2021 are discussed below and shown in the table
above:
Revisions In 2019, strong performances at Wheatstone and the greater Gorgon areas were mainly responsible for 1.7 TCF
increase in Australia. At TCO in Kazakhstan, reservoir management and entitlement effects were mainly responsible for
223 BCF increase. Portfolio optimizations and low price realizations in various fields of the Midland and Delaware basins
and planned divestments in the Appalachian basin were mainly responsible for the 2.6 TCF decrease in the United States.
In 2020, the demotion of Jansz Io compression project reserves and lower field performance, partially offset by positive
revisions at Gorgon, were mainly responsible for the net 2.5 TCF decrease in Australia. Capital reductions and commodity
price effects in various fields of the Midland and Delaware basins were mainly responsible for the 509 BCF decrease in the
United States. In Africa, a 229 BCF decrease was primarily due to reduced demand and development plan changes at
Meren in Nigeria.
In 2021, the approval of the Jansz Io Compression project was mainly responsible for the 1.2 TCF increase in Australia.
Higher commodity prices, resulting in the increase of planned development activity in the Midland and Delaware basins,
were mainly responsible for the 829 BCF increase in the United States. In TCO, entitlement effects and technical changes
in field operating assumptions, reservoir model, and project schedule were primarily responsible for the 179 BCF decrease.
Extensions and Discoveries In 2019, extensions and discoveries of 1.0 TCF in the United States were primarily in the
Midland and Delaware basins.
In 2020, extensions and discoveries of 385 BCF in the United States were primarily in the Midland and Delaware basins.
In 2021, extensions and discoveries of 1.4 TCF in the United States were primarily in the Midland and Delaware basins.
Chevron Corporation 2021 Annual Report
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Supplemental Information on Oil and Gas Producing Activities - Unaudited
Purchases In 2020, the acquisition of Noble assets contributed 5.4 TCF in Israel in Asia, 1.5 TCF in the DJ basin, Midland
and Delaware basins and Eagle Ford Shale in the United States and 441 BCF in Equatorial Guinea in Africa.
Sales In 2019, sales of 240 BCF in Europe were in the United Kingdom and Denmark.
In 2020, sales of 1.3 TCF were primarily in the Appalachian basin in the United States and 264 BCF primarily in
Azerbaijan in Asia.
Net Proved Reserves of Natural Gas
Billions of cubic feet (BCF)
Reserves at January 1, 2019
Changes attributable to:
Revisions
Improved recovery
Extensions and discoveries
Purchases
Sales
Production3
Reserves at December 31, 20194
Changes attributable to:
Revisions
Improved recovery
Extensions and discoveries
Purchases
Sales
Production3
Reserves at December 31, 20204
Changes attributable to:
Revisions
Improved recovery
Extensions and discoveries
Purchases
Sales
Production3
Other
U.S. Americas1 Africa
2,815
863
6,709
Consolidated Companies
Affiliated
Companies
Asia Australia Europe
Total
TCO
4,310
13,731
305
28,733
1,934
Other2
909
(2,565)
—
1,008
24
(1)
(447)
4,728
(107)
—
46
—
165
—
1,732
—
3
—
(726)
—
93
—
1
—
1,156
24
49
—
—
—
5
—
(2) —
—
(103)
(799)
(67)
736
2,758
3,681
14,658
—
(898)
(240)
(243)
(43) (2,357)
26,587
26
—
(153)
2,004
—
(102)
866
223
—
—
—
39
—
20
—
Total
Consolidated
and Affiliated
Companies
31,576
(464)
—
1,176
24
(243)
(2,612)
29,457
(509)
(178)
(229)
169
(2,455)
(2) (3,204)
162
138
(2,904)
—
385
1,548
(1,314)
(588)
4,250
—
—
—
2
—
—
—
58
—
—
453
441
5,350
—
—
7,339
8
—
(177) —
(60)
329
2,837
(135)
(264)
(753)
—
—
(876)
(1,755)
(2) (2,414)
27,006
22
8,183
11,385
—
—
—
—
(148)
2,018
829
129
147
119
1,181
1
2,406
(179)
—
1,408
44
(29)
(617)
—
—
—
—
—
—
63
—
—
19
—
1,490
—
—
—
—
—
44
—
(66)
455
—
—
(13) —
(188)
(829)
(888)
(42)
(2) (2,590)
28,314
21
—
—
—
—
(138)
—
—
—
—
(106)
898
82
—
—
—
—
(87)
893
—
453
7,339
(1,755)
(2,668)
29,922
2,309
—
1,490
44
(42)
(2,815)
30,908
Reserves at December 31, 20214
1 Ending reserve balances in North America and South America were 347, 234 and 462 and 108, 95 and 274 in 2021, 2020 and 2019, respectively.
2 Ending reserve balances in Africa and South America were 893, 898 and 802 and 0, 0 and 64 in 2021, 2020 and 2019, respectively.
3 Total “as sold” volumes are 2,599, 2,447 and 2,379 for 2021, 2020 and 2019, respectively.
4
1,701
7,473
2,796
5,885
11,684
Includes reserve quantities related to production-sharing contracts (PSC) (refer to glossary of energy and financial terms for the definition of a PSC). PSC-related reserve
quantities are 8 percent, 10 percent and 10 percent for consolidated companies for 2021, 2020 and 2019, respectively.
Chevron Corporation 2021 Annual Report
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Supplemental Information on Oil and Gas Producing Activities - Unaudited
Table VI - Standardized Measure of Discounted Future Net Cash Flows Related to Proved Oil and Gas Reserves
The standardized measure of discounted future net cash flows is calculated in accordance with SEC and FASB
requirements. This includes using the average of first-day-of-the-month oil and gas prices for the 12-month period prior to
the end of the reporting period, estimated future development and production costs assuming the continuation of existing
economic conditions, estimated costs for asset retirement obligations (includes costs to retire existing wells and facilities in
addition to those future wells and facilities necessary to produce proved undeveloped reserves), and estimated future
income taxes based on appropriate statutory tax rates. Discounted future net cash flows are calculated using 10 percent
mid-period discount factors. Estimates of proved reserve quantities are imprecise and change over time as new information
becomes available. Probable and possible reserves, which may become proved in the future, are excluded from the
calculations. The valuation requires assumptions as to the timing and amount of future development and production costs.
The calculations are made as of December 31 each year and do not represent management’s estimate of the company’s
future cash flows or value of its oil and gas reserves. In the following table, the caption “Standardized Measure Net Cash
Flows” refers to the standardized measure of discounted future net cash flows.
Consolidated Companies
Affiliated
Companies
Total
Consolidated
and Affiliated
Companies
498,668
(124,053)
(35,463)
(110,132)
229,020
Other
U.S. Americas
Africa
Millions of dollars
At December 31, 2021
Future cash inflows from production $ 174,976 $ 48,328 $ 41,698 $ 52,881 $ 87,676 $ 4,366 $ 409,925 $ 80,297 $ 8,446 $
Future production costs
Future development costs
Future income taxes
Undiscounted future net cash flows
10 percent midyear annual discount
(40,009) (16,204) (15,204) (13,871)
(2,707) (2,245) (2,774)
(16,709)
(24,182)
(7,723) (17,228) (21,064)
94,076
(13,726) (1,400) (100,414)
(661) (30,379)
(922) (91,719)
187,413
(285)
(18)
(15,563) (2,850)
5,293
36,314
(5,283)
(20,600)
48,067
(23,354)
(5,066)
Asia Australia Europe
21,694
15,172
1,383
7,021
Other
Total
TCO
for timing of estimated cash flows (41,357) (11,370) (1,899) (7,277)
(21,141)
(485) (83,529)
(14,372) (2,244)
(100,145)
Standardized Measure
Net Cash Flows
$ 52,719 $ 10,324 $ 5,122 $ 7,895 $ 26,926 $
898 $ 103,884 $ 21,942 $ 3,049 $
128,875
At December 31, 2020
Future cash inflows from production $ 74,671 $ 29,605 $ 27,521 $ 49,265 $ 53,241 $ 2,304 $ 236,607 $ 53,309 $ 1,070 $
Future production costs
Future development costs
Future income taxes
Undiscounted future net cash flows
10 percent midyear annual discount
(30,359) (15,410) (15,364) (12,784)
(2,366) (3,017) (2,274)
(10,492)
(3,131) (6,197) (17,543)
(5,874)
8,698
(11,036) (1,336) (86,289)
(522) (21,876)
(178) (44,623)
83,819
268
(19,525)
(7,138)
(7,994)
(3,205)
(11,700)
27,300
(426)
(38)
(212)
394
18,652
27,946
16,664
2,943
290,986
(106,240)
(29,052)
(52,829)
102,865
for timing of estimated cash flows (10,456)
(4,652)
(582) (7,856)
(11,774)
(56) (35,376)
(8,803)
(149)
(44,328)
Standardized Measure
Net Cash Flows
$ 17,490 $ 4,046 $ 2,361 $ 8,808 $ 15,526 $
212 $ 48,443 $ 9,849 $
245 $
58,537
At December 31, 2019
Future cash inflows from production $ 122,012 $ 45,701 $ 45,706 $ 43,386 $ 95,845 $ 4,466 $ 357,116 $ 85,179 $ 12,309 $
Future production costs
Future development costs
Future income taxes
Undiscounted future net cash flows
(32,349) (18,324) (17,982) (14,646)
(4,219) (3,643) (5,070)
(15,987)
(15,780)
(6,491) (17,562) (11,147)
57,896
(14,141) (1,428) (98,870)
(341) (34,718)
(22,874) (1,078) (74,932)
148,596
53,372
(22,302) (2,487)
(14,340)
(705)
(14,561) (3,855)
5,262
33,976
16,667
(5,458)
1,619
12,523
6,519
454,604
(123,659)
(49,763)
(93,348)
187,834
10 percent midyear annual discount
for timing of estimated cash flows (26,422)
(9,312) (1,629) (3,652)
(26,536)
(650) (68,201)
(16,990) (2,096)
(87,287)
Standardized Measure
Net Cash Flows
$ 31,474 $ 7,355 $ 4,890 $ 8,871 $ 26,836 $
969 $ 80,395 $ 16,986 $ 3,166 $
100,547
Chevron Corporation 2021 Annual Report
108
108
Supplemental Information on Oil and Gas Producing Activities - Unaudited
Table VII - Changes in the Standardized Measure of Discounted Future Net Cash Flows From Proved Reserves
The changes in present values between years, which can be significant, reflect changes in estimated proved reserve
quantities and prices and assumptions used in forecasting production volumes and costs. Changes in the timing of
production are included with “Revisions of previous quantity estimates.”
Millions of dollars
Present Value at January 1, 2019
Consolidated Companies
Affiliated Companies
Affiliated Companies
$
94,631
$
24,696
$ 119,327
Total Consolidated and
Sales and transfers of oil and gas produced net of production costs
Development costs incurred
Purchases of reserves
Sales of reserves
Extensions, discoveries and improved recovery less related costs
Revisions of previous quantity estimates
Net changes in prices, development and production costs
Accretion of discount
Net change in income tax
Net Change for 2019
(29,436)
10,497
406
(579)
5,697
621
(25,056)
13,538
10,077
(14,235)
(5,823)
5,120
—
—
43
2,122
(11,637)
3,584
2,046
(4,545)
(35,259)
15,617
406
(579)
5,740
2,743
(36,693)
17,122
12,123
(18,780)
Present Value at December 31, 2019
$
80,396
$
20,151
$ 100,547
Sales and transfers of oil and gas produced net of production costs
Development costs incurred
Purchases of reserves
Sales of reserves
Extensions, discoveries and improved recovery less related costs
Revisions of previous quantity estimates
Net changes in prices, development and production costs
Accretion of discount
Net change in income tax
Net Change for 2020
(16,621)
6,301
10,295
(803)
2,066
(1,293)
(62,788)
11,274
19,616
(31,953)
Present Value at December 31, 2020
Sales and transfers of oil and gas produced net of production costs
$
48,443
(34,668)
Development costs incurred
Purchases of reserves
Sales of reserves
Extensions, discoveries and improved recovery less related costs
Revisions of previous quantity estimates
Net changes in prices, development and production costs
Accretion of discount
Net change in income tax
Net Change for 2021
5,770
772
(889)
12,091
2,269
89,031
6,657
(25,592)
55,441
(2,322)
2,892
—
—
—
4,033
(22,925)
2,948
5,317
(10,057)
$
10,094
(5,760)
2,445
—
—
—
(6,675)
30,076
1,503
(6,692)
14,897
(18,943)
9,193
10,295
(803)
2,066
2,740
(85,713)
14,222
24,933
(42,010)
$
58,537
(40,428)
8,215
772
(889)
12,091
(4,406)
119,107
8,160
(32,284)
70,338
Present Value at December 31, 2021
$ 103,884
$
24,991
$ 128,875
Chevron Corporation 2021 Annual Report
109
109
glossary of energy
and financial terms
energy terms
Acreage Land leased for oil and gas exploration and production.
Additives Specialty chemicals incorporated into fuels and lubricants
that enhance the performance of the finished product.
Barrels of oil-equivalent A unit of measure to quantify crude oil,
natural gas liquids and natural gas amounts using the same basis.
Natural gas volumes are converted to barrels on the basis of energy
content. See oil-equivalent gas and production.
Carbon intensity is the amount of carbon dioxide or carbon dioxide
equivalent (co2e) per unit of measure.
Condensate Hydrocarbons that are in a gaseous state at reservoir
conditions, but when produced are in liquid state at surface conditions.
Development Drilling, construction and related activities
following discovery that are necessary to begin production and
transportation of crude oil and/or natural gas.
Enhanced recovery Techniques used to increase or prolong
production from crude oil and natural gas reservoirs.
Exploration Searching for crude oil and/or natural gas by utilizing
geological and topographical studies, geophysical and seismic
surveys, and drilling of wells.
Gas-to-liquids (GTL) A process that converts natural gas into high-
quality liquid transportation fuels and other products.
Hydrogen Chevron’s approach to hydrogen for new lower carbon
businesses envisions the use of green, blue, and gray hydrogen.
Chevron believes the use of blue and green hydrogen as a fuel
source can help reduce the amount of greenhouse gas emissions
entering the atmosphere. While gray hydrogen is viewed as not
directly supporting decarbonization of the energy sector, Chevron
believes that early-use cases of gray hydrogen can provide key
opportunities to de-risk technology, enable development of
supporting infrastructure, including fueling stations, and contribute
to learnings.
Liquefied natural gas (LNG) Natural gas that is liquefied under
extremely cold temperatures to facilitate storage or transportation
in specially designed vessels.
Liquefied petroleum gas (LPG) Light gases, such as butane and
propane, that can be maintained as liquids while under pressure.
Lower carbon energy includes a variety of existing and emerging
energy solutions and services, including traditional energy sources
linked with renewables or abatement technologies or measures,
carbon capture and sequestration, offsets, blue and green
hydrogen, geothermal and nuclear.
Lower carbon intensity oil, products and natural gas includes oil,
natural gas and hydrocarbon-based products that are produced
and sold to customers with a carbon intensity below that of
traditional oil, natural gas and hydrocarbon-based products.
Natural gas liquids (NGLs) Separated from natural gas, these
include ethane, propane, butane and natural gasoline.
Net reserves and resources Chevron’s interest share of oil and gas
after removing royalty share and overriding royalties paid to others.
Net includes any applicable Chevron-owned overriding royalties.
Net zero upstream aspiration (Scope 1 and 2) Chevron aspires
to reach net zero Upstream emissions (Scope 1 and 2) by 2050.
Accomplishing this aspiration depends on continuing progress on
commercially viable technology, government policy, successful
negotiations for carbon capture and storage and nature-based
projects, availability of cost-effective, verifiable offsets in the global
market, and granting of necessary permits by governing authorities.
Oil-equivalent gas The volume of natural gas needed to
generate the equivalent amount of heat as a barrel of crude oil.
Approximately 6,000 cubic feet of natural gas is equivalent to one
barrel of crude oil.
Oil sands Naturally occurring mixture of bitumen (a heavy, viscous
form of crude oil), water, sand and clay. Using hydroprocessing
technology, bitumen can be refined to yield synthetic oil.
Petrochemicals Compounds derived from petroleum. These
include: aromatics, which are used to make plastics, adhesives,
synthetic fibers and household detergents; and olefins, which are
used to make packaging, plastic pipes, tires, batteries, household
detergents and synthetic motor oils.
Portfolio Carbon Intensity represents the estimated energy-
weighted average greenhouse gas emissions intensity from
a simplified value chain from the production, refinement,
distribution, and end use of marketed energy products per
unit of energy delivered.
Production Total production refers to all the crude oil (including
synthetic oil), NGLs and natural gas produced from a property.
Net production is the company’s share of total production after
deducting both royalties paid to landowners and a government’s
agreed-upon share of production under a PSC. Liquids production
refers to crude oil, condensate, NGLs and synthetic oil volumes.
Oil-equivalent production is the sum of the barrels of liquids and the
oil-equivalent barrels of natural gas produced. See barrels of oil-
equivalent, oil-equivalent gas and production-sharing contract.
Chevron Corporation 2021 Annual Report
110
Production-sharing contract (PSC) An agreement between a
government and a contractor (generally an oil and gas company)
whereby production is shared between the parties in a prearranged
manner. The contractor typically incurs all exploration, development
and production costs, which are subsequently recoverable out of an
agreed-upon share of any future PSC production, referred to as cost
recovery oil and/or gas. Any remaining production, referred to as
profit oil and/or gas, is shared between the parties on an agreed-
upon basis as stipulated in the PSC. The government may also retain
a share of PSC production as a royalty payment, and the contractor
typically owes income tax on its portion of the profit oil and/or
gas. The contractor’s share of PSC oil and/or gas production and
reserves varies over time, as it is dependent on prices, costs and
specific PSC terms.
Refinery utilization Represents average crude oil consumed in fuel
and asphalt refineries for the year, expressed as a percentage of the
refineries’ average annual crude unit capacity.
Reserves Crude oil and natural gas contained in underground rock
formations called reservoirs and saleable hydrocarbons extracted
from oil sands, shale, coalbeds and other nonrenewable natural
resources that are intended to be upgraded into synthetic oil or gas.
Net proved reserves are the estimated quantities that geoscience
and engineering data demonstrate with reasonable certainty to be
economically producible in the future from known reservoirs under
existing economic conditions, operating methods and government
regulations and exclude royalties and interests owned by others.
Estimates change as additional information becomes available.
Oil-equivalent reserves are the sum of the liquids reserves and the
oil-equivalent gas reserves. See barrels of oil-equivalent and oil
equivalent gas. The company discloses only net proved reserves
in its filings with the U.S. Securities and Exchange Commission.
Investors should refer to proved reserves disclosures in Chevron’s
Annual Report on Form 10-K for the year ended December 31, 2021.
Resources Estimated quantities of oil and gas resources are
recorded under Chevron’s 6P system, which is modeled after
the Society of Petroleum Engineers’ Petroleum Resources
Management System, and include quantities classified as proved,
probable and possible reserves, plus those that remain contingent
on commerciality. Unrisked resources, unrisked resource base
and similar terms represent the arithmetic sum of the amounts
recorded under each of these classifications. Recoverable resources,
potentially recoverable volumes and other similar terms represent
estimated remaining quantities that are forecast to be ultimately
recoverable and produced in the future, adjusted to reflect the
relative uncertainty represented by the various classifications.
These estimates may change significantly as development
work provides additional information. All of these measures
are considered by management in making capital investment
and operating decisions and may provide some indication to
stockholders of the resource potential of oil and gas properties in
which the company has an interest.
Shale gas Natural gas produced from shale rock formations where
the gas was sourced from within the shale itself. Shale is very
fine-grained rock, characterized by low porosity and extremely low
permeability. Production of shale gas normally requires formation
stimulation such as the use of hydraulic fracturing (pumping a
fluid-sand mixture into the formation under high pressure) to help
produce the gas.
Synthetic oil A marketable and transportable hydrocarbon liquid,
resembling crude oil, that is produced by upgrading highly viscous
or solid hydrocarbons, such as extra-heavy crude oil or oil sands.
Tight oil Liquid hydrocarbons produced from shale (also referred
to as shale oil) and other rock formations with extremely low
permeability. As with shale gas, production from tight oil reservoirs
normally requires formation stimulation such as hydraulic fracturing.
Unconventional oil and gas resources Hydrocarbons contained in
formations over very large areas with extremely low permeability
that are not influenced by buoyancy. In contrast, conventional
resources are contained within geologic structures/stratigraphy
and float buoyantly over water. Unconventional resources include
shale gas, coalbed methane, crude oil and natural gas from tight
rock formations, tar sands, kerogen from oil shale, and gas hydrates
that cannot commercially flow without well stimulation.
Wells Oil and gas wells are classified as either exploration or
development wells. Exploration wells are wells drilled to find a
new field or to find a new reservoir in a field previously found to
be productive of oil and gas in another reservoir. Appraisal wells
are exploration wells drilled to confirm the results of a discovery
well. Delineation wells are exploration wells drilled to determine the
boundaries of a productive formation or to delineate the extent of
a find. Development wells are wells drilled in an existing reservoir
in a proved oil- or gas-producing area. Completed wells are wells
for which drilling work has been completed and that are capable of
producing. Dry wells are wells completed as dry holes, that is, wells
not capable of producing in commercial quantities.
financial terms
Capital employed The sum of Chevron Corporation stockholders’
equity, total debt and noncontrolling interests. Average capital
employed is computed by averaging the sum of capital employed at
the beginning and end of the year.
Cash flow from operating activities Cash generated from the
company’s businesses; an indicator of a company’s ability to fund
capital programs and stockholder distributions. Excludes cash flows
related to the company’s financing and investing activities.
Current ratio Current assets divided by current liabilities.
Debt ratio Total debt, including finance lease liabilities, divided by
total debt plus Chevron Corporation stockholders’ equity.
Earnings Net income attributable to Chevron Corporation as
presented on the Consolidated Statement of Income.
Free cash flow The cash provided by operating activities less cash
capital expenditures.
Goodwill An asset representing the future economic benefits
arising from the other assets acquired in a business combination
that are not individually identified and separately recognized.
Interest coverage ratio Income before income tax expense, plus
interest and debt expense and amortization of capitalized interest,
less net income attributable to noncontrolling interests, divided by
before-tax interest costs.
Margin The difference between the cost of purchasing, producing
and/or marketing a product and its sales price.
Net debt ratio Total debt less the sum of cash and cash equivalents,
time deposits, and marketable securities, as a percentage of total
debt less the sum of cash and cash equivalents, time deposits, and
marketable securities plus Chevron Corporation’s stockholders’ equity.
Return on capital employed (ROCE) This is calculated by dividing
earnings (adjusted for after-tax interest expense and noncontrolling
interests) by average capital employed.
Return on stockholders’ equity (ROSE) This is calculated by
dividing earnings by average Chevron Corporation stockholders’
equity. Average Chevron Corporation stockholders’ equity is
computed by averaging the sum of the beginning-of-year and end-
of-year balances.
Return on total assets This is calculated by dividing earnings by
average total assets. Average total assets is computed by averaging
the sum of the beginning-of-year and end-of year balances.
Total stockholder return The return to stockholders as measured by
stock price appreciation and reinvested dividends for a period of time.
Chevron Corporation 2021 Annual Report
111
stockholder and
investor information
stock exchange listing
dividend payment dates
Chevron common stock is listed on the New
York Stock Exchange. The symbol is “CVX.”
stockholder information
As of February 7, 2022, stockholders of record
numbered approximately 108,600.
For questions about stock ownership, changes
of address and dividend reinvestment
programs, please contact Chevron’s stock
transfer agent:
Computershare
P.O. Box 505000
Louisville, KY 40233-5000
800 368 8357 (U.S. and Canada)
201 680 6578 (outside the U.S. and Canada)
www.computershare.com/investor
Overnight correspondence should be sent to:
Computershare
462 South 4th Street
Suite 1600
Louisville, KY 40202
The Computershare Investment Plan is a direct
stock purchase and dividend reinvestment plan.
Quarterly dividends on common stock are paid,
generally, following declaration by the Board
of Directors, on or about the 10th day of March,
June, September and December. Direct deposit
of dividends is available to stockholders.
For information, contact Computershare.
(See “stockholder information” section.)
annual meeting
The Annual Meeting of Stockholders will be
held online via live audio webcast at 8 a.m.
PDT, Wednesday, May 25, 2022.
www.virtualshareholdermeeting.com/
CVX2022
electronic access
In an effort to conserve natural resources and
reduce the cost of printing and mailing proxy
materials, we encourage stockholders to register
to receive these documents by email and vote
their shares on the internet. Stockholders of
record may sign up for electronic access (and
beneficial stockholders may be able to request
electronic access by contacting their broker
or bank or Broadridge Financial Solutions)
on this website: www.icsdelivery.com/cvx/.
Enrollment is revocable until each year’s
Annual Meeting record date.
Chevron Corporation 2021 Annual Report
112
investor information
Securities analysts, portfolio managers
and representatives of financial institutions
may contact:
Investor Relations
Chevron Corporation
6001 Bollinger Canyon Road
San Ramon, CA 94583-2324
925 842 5690
Email: invest@chevron.com
notice
As used in this report, the term “Chevron”
and such terms as “the company,” “the
corporation,” “our,” “we,” “us” and “its” may
refer to one or more of Chevron’s consolidated
subsidiaries or to all of them taken as a whole.
All of these terms are used for convenience
only and are not intended as a precise
description of any of the separate companies,
each of which manages its own affairs.
corporate headquarters
6001 Bollinger Canyon Road
San Ramon, CA 94583-2324
925 842 1000
Since 1999, Chevron Technology
Ventures has been investing in
startups across a wide cross section
of energy innovation. We have a
track record of collaboration to
bring innovation to scale, enabling
business solutions with the potential
to enhance the way Chevron
produces and delivers affordable,
reliable and ever-cleaner energy
now and into the future.
Find out more by visiting:
www.chevron.com/technology/
technology-ventures
publications and
other news sources
The Annual Report, distributed in April,
summarizes the company’s financial
performance in the preced ing year and
provides an overview of the company’s
major activities.
Chevron’s Annual Report on Form 10-K
filed with the U.S. Securities and Exchange
Commission and the Supplement to the
Annual Report, containing additional financial
and operating data, are available on the
company’s website, www.chevron.com, or
copies may be requested by contacting:
Investor Relations
Chevron Corporation
6001 Bollinger Canyon Road, A3140
San Ramon, CA 94583-2324
925 842 5690
Email: invest@chevron.com
The 2021 Sustainability Report will be available
in May at www.chevron.com/sustainability,
where a guide to Chevron’s sustainability
efforts and approach to our environment,
social and governance (ESG) priorities can
be found.
Highlights include: the innovative and
responsible actions Chevron is taking to
advance environmental performance; our
investment in people and partnership; and
our commitment to delivering results the right
and responsible way, with safety and health as
operating priorities.
Printed copies may be requested by writing to:
Corporate Affairs: Corporate Sustainability
Communications
Chevron Corporation
6001 Bollinger Canyon Road
Building G
San Ramon, CA 94583-2324
Details of the company’s political contributions
for 2021 are available on the company’s
website, www.chevron.com, or by writing to:
Corporate Affairs
Chevron Corporation
6001 Bollinger Canyon Road
Building G
San Ramon, CA 94583-2324
For additional information about the company
and the energy industry, visit Chevron’s
website, www.chevron.com. It includes
articles, news releases, presentations,
quarterly earnings information, the Proxy
Statement and the complete text of this
Annual Report.
connect with us
This Annual Report contains forward-looking statements – identified by words such as “advances,” “aim,” “ambitions,” “anticipates,” “approaches,” “aspiration,” “believe,” “budgets,”
“can,” “commit,” “commits,” “drives,” “estimates,” “expect,” “focus,” “forecast,” “goal,” “intend,” “may,” “on track,” “opportunity,” “plan,” “position,” “potential,” “progress,” “project,”
“schedule,” “seeks,” “should,” “strategy,” “target,” “will” and similar phrases – that reflect management’s current estimates and beliefs, but are not guarantees of future results. Please
see “Cautionary Statements Relevant to Forward-Looking Information for the Purpose of ‘Safe Harbor’ Provisions of the Private Securities Litigation Reform Act of 1995” on page 31 for
a discussion of some of the factors that could cause actual results to differ materially.
Produced by Corporate Affairs and Controller’s Departments, Chevron Corporation
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Chevron Corporation 2021 Annual Report
114
More than 13,000 people have received ear
health screenings through the Chevron Pilbara
Ear Health Program over the past decade.
The program is unique to Western Australia
and provides mobile screening, diagnosis
and clinical care pathways to address the
significant ear health concerns of children
in remote communities, with a focus on
Aboriginal ear health.
In 2021, we committed $1.9 million to Telethon
Speech & Hearing and the Channel 7 Telethon
Trust. We also boosted funding for the
Onslow Education Initiative to include speech
and language support with occupational
therapy to identify students not meeting
developmental milestones.
Our partnerships will significantly increase
the scale of early diagnosis and intervention
services in the region, driving greater health
and education outcomes in the Pilbara.
Learn more at:
australia.chevron.com
Human ingenuity has the power to solve any challenge and overcome any
obstacle. Meeting the world’s growing energy needs demands pursuit of
innovations and advancements that deliver a better future for all.
learn more
chevron.com/sustainability
Chevron Corporation
6001 Bollinger Canyon Road, San Ramon, CA 94583-2324 USA
www.chevron.com
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