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Offshore Drilling Challenges and Opportunities
2012 Chevron U.S.A. Inc.
J. Keith CouvillionChevron U.S.A. Inc.
October 18, 2012
Cautionary StatementCAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF
SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This presentation of Chevron Corporation contains forward-looking statements relating to Chevrons operations that are based on managements current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries. Words such as anticipates, expects, intends, plans, targets, forecasts, projects, believes, seeks, schedules, estimates, budgets, outlook 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, some of which are beyond the companys 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 presentation. 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; changing refining marketing and chemical margins; actions of competitors or regulators; timing of exploration
oil and natural gas prices; changing refining, marketing and chemical margins; actions of competitors or regulators; timing of exploration expenses; timing of crude oil liftings; the competitiveness of alternate-energy sources or product substitutes; technological developments; the results of operations and financial condition of equity affiliates; the inability or failure of the companys 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 companys net production or manufacturing facilities or delivery/transportation networks due to war, accidents, political events, civil unrest, severe weather or crude oil production quotas that might be imposed by the Organization of Petroleum Exporting Countries; the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant investment or product changes under existing or future environmental statutes, regulations and litigation; the potential liability resulting from other pending or future litigation; the companys future acquisition or disposition of assets and gains and losses from asset dispositions or impairments; government-mandated sales, divestitures, recapitalizations, industry-specific taxes, changes in fiscal terms or restrictions on scope of company operations; foreign currency movements compared with the U.S. dollar; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; and the factors set forth under the heading Risk Factors on pages 29 through 31 of the companys 2011 Annual Report on Form 10-K. In addition, such statements could be affected by general domestic and international economic and political conditions. Other unpredictable or unknown factors not discussed in this presentation could also have material adverse effects on forward-looking statements.
Certain terms, such as unrisked resources, unrisked resource base, recoverable resources, and oil in place, among others, may be used in this presentation to describe certain aspects of the companys portfolio and oil and gas properties beyond the proved reserves. For definitions of, and further information regarding, these and other terms, see the Glossary of Energy and Financial Terms on pages 58 and 59 of the companys 2011 Supplement to the Annual Report and available at Chevron.com.
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Outline
Offshore Defined
Drilling Vessels
Drilling Challenges
Permitting
New Technology Opportunities
2012 Chevron U.S.A. Inc. 3
New Technology Opportunities
The Future
Questions

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Offshore Defined
Government Controlled Offshore Lands United States - Exclusive Economic Zone(3 Billion Acres 4.1 Million Sq. Miles)
Source: DOI
Gulf of Mexico Seafloor Bathometry --Shelf, Deepwater and Ultra Deepwater
Texas
Louisiana

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Deepwater Gulf of Mexico Bathymetry
Atwater ValleyGreen Canyon
Salt Province
TexasLouisiana
Continental Shelf
Green Canyon
Salt Province
Abyssal Plain
30 Miles
48 km
Walker Ridge
Walker Ridge Area Map
Deepwater Gulf of MexicoTechnically Challenging Environment
Much of the prospective Gulf of Mexico deepwater area is covered by layers of massive salt.
US
Mexico10000 (3000 m)10000 (3000 m)
7,500 (2300 m)7,500 (2300 m)
6,000 (1800 m)6,000 (1800 m)
Salt Canopy

4
Gulf of Mexico Region
Drilling Vessels
Jack-up Drilling Rig

5
Semi-Submersible Drilling RigMoored/Anchored
Semi-Submersible Drilling Rig -Dynamically Positioned
Drill Ship - Dynamically Positioned
Length - 835 Ft.Breadth - 125 Ft.Max. Drill Depth 35,000 Ft.Max. Water Depth 10,000 Ft.

6
Platform Rig
Drilling Challenges
0
5000
Pre 1
950
50-54
55-59
60-64
65-69
70-74
75-79
80-84
85-89
90-94
95-99
00-04
05-09
Futur
e
Water Depth
Water Depth Record (03) 10,011 ftWater Depth Record (03) 10,011 ft
Land Rig Platform Rig Jack-up Rig Semi-Submersible Rig Dynamic Positioned Drill Ship
Toda
y
Industry Deep Water Gulf of Mexico Drilling Records
10000
15000
20000
25000
30000
35000
40000
Dep
th (f
t)
Offshore Exploration Drilling TDOffshore Exploration Drilling TD
Total Drilled Depth
Drilling Depth Record (09) 35,955 ftDrilling Depth Record (09) 35,955 ft
In the middle of last century the industry started exploring below the worlds oceans. Since then new technology has consistently pushed the industry into deeper water depths and total drilled depths.
Records continue to be broken with current 6thGeneration drill ships able to drill in 12,000 ft water depth and to 40,000 ft total depth.
Current Rig Capability 12,000 ftCurrent Rig Capability 12,000 ft
Current Rig Capability 40,000 ftCurrent Rig Capability 40,000 ft
Water Depth Record (08) 10,139 ftWater Depth Record (08) 10,139 ft
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7
0
5000
Pre 1
950
50-54
55-59
60-64
65-69
70-74
75-79
80-84
85-89
90-94
95-99
00-04
05-09
Futur
e
tions
of s
alt?
Toda
y
Land Rig Platform Rig Jack-up Rig Semi-Submersible Rig Dynamic Positioned Drill Ship
Industry Deep Water Gulf of Mexico Subsalt Drilling
10000
15000
20000
25000
30000
35000
40000
Dep
th (f
t)
It wasnt until the early 1980s that explorers started looking for oil below salt. With the advancement of seismic imaging and drilling technology the industry has been successfully pushing these limits deeper.
Most of the Wilcox reserves in DW GOM are covered by a salt canopy, in some cases up to 20,000 ft thick.
Salt drilled
Will
we
cont
inue
to fi
nd re
serv
es b
elow
thic
ker s
ect
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In 7,000 of water and five miles below the seabed
Technology is Pushing the Envelope on Water Depths
Transocean Deepseas
Drilling in depths that only yesterday seemed impossible
Ultra-deep Water Gulf of MexicoDrilling Technical Challenges
Storms and hurricanes
Loop and eddy currents cause vortex induced vibrations and motions to drill strings
Unpredictable high pressure gas charged stringers and faults near surface
Mobile/flow-able/dissolvable 10 000 thick salt canopy with
Sea Level
8,000
Allochthonous Sigsbee
Suprasalt Sediment
Gulf of Mexico
Empire State Building ~500 Meters
10,000 thick salt canopy with unpredictable layers of highly variable trapped sediments
Unpredictable base of salt rapid pressure differentials
Thief zones of significantly lower pressure which cause lost circulation fluid loss
Ultra-deep reservoir with high t

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Offshore Drilling Challenges and · PDF fileOffshore Drilling Challenges and Opportunities ... whether as a result of new information, ... Upper Tertiary