Our company’s financial strength enables the funding of attractive investments consistent with our long-term strategies, said chairman and chief executive officer Dave O’Reilly. O’Reilly said about 75 % of the 2009 spending program is for upstream oil and gas exploration and production projects worldwide. Another 20 % is associated with the company’s downstream businesses that manufacture, transport and sell gasoline, diesel fuel and other refined products.

Much of our 2009 spending continues to be on large, multiyear projects aimed at increasing energy supplies to meet global demand and also improving operating efficiency and reliability, O’Reilly added. About 10 % of the budget is for large, one-time payments related to upstream production concessions outside the United States.

Upstream – Exploration and Production

Spending of $17.5 billion is planned for exploration, production and natural gas-related projects. A significant portion relates to development projects that build on the company’s successful and focused exploration results in recent years, including opportunities in the deepwater US Gulf of Mexico, western Africa and the Gulf of Thailand. Funding also is earmarked for further appraisal and evaluation of other prospective areas in the world’s major hydrocarbon basins, including Northwest Australia.

Our upstream investments are aimed at finding and developing oil and gas resources to increase production and help supply the energy needs of markets around the world, said George Kirkland, Chevron’s executive vice president of Upstream and Gas. Start-ups of major projects in 2009 are expected to include Tahiti in the Gulf of Mexico, Tombua-Landana offshore Angola and Frade offshore Brazil. We also anticipate significant production increases from recent start-ups at Agbami offshore Nigeria and Blind Faith in the Gulf of Mexico and from expansion activity at Tengiz in Kazakhstan.

Major upstream spending in 2009 includes activities in the following areas:

US Gulf of Mexico – deepwater exploration and development, including Perdido and Jack- St. Malo.

Brazil – development of the Frade Field

Nigeria – development of the Agbami and Usan deepwater fields

Angola – development of block 14 assets, including Tombua-Landana, and construction of LNG facilities

Western Australia – development of Gorgon, Wheatstone and North West Shelf offshore natural gas resources, including LNG facilities

Thailand – development of the Platong Gas II project offshore Thailand

Indonesia – northern expansion of the Duri Field steamflood project

China – one-time payment and initial development of the Chuandongbei gas field

Middle East – one-time payment for concession extension and development in the

Partitioned Neutral Zone of Saudi Arabia and Kuwait

Downstream – Refining, Marketing and Transportation

Capital spending of $4.3 billion in 2009 is budgeted for global downstream operations, including $2 billion for projects in the US. Included in the US spending is $1.5 billion for improvements to the refinery network.

Downstream expenditures are aimed at enhancing the company’s ability to safely and reliably manufacture transportation fuels from a variety of feedstocks, increasing energy efficiency and providing environmental benefits.

Outlays in 2009 include projects in the company’s refineries in Mississippi and California. The company’s 50 %-owned GS Caltex affiliate is also expected to continue development work on upgrading of its Yeosu refining complex in South Korea. In support of projects to commercialize the company’s large natural gas resource base, downstream expenditures will be made in 2009 on gas-to-liquids manufacturing facilities.

Chemicals and Other:

Expenditures of about $1 billion in 2009 are budgeted for chemicals, technology, power generation and other corporate activities.