Chevron North America Exploration and Production Company Lee Ann Wainwright Policy, Government & Public Affairs Raoul Martin Health, Environment & Safety Team Leader
Š 2011 Chevron U.S.A. Inc.
Chevron Global Expertise & Experience
Industry leading safety performance More than 60,000 employees worldwide
No. 4 largest integrated energy company in the world 2.73 million barrels a day in 26 countries 130 years producing oil and natural gas
Š 2011 Chevron U.S.A. Inc.
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Key 2012 Exploration Activity Unconventional
Š 2011 Chevron U.S.A. Inc.
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Business Drivers Why Marcellus?
Most attractive shale gas play in North America – Proximity to premier market – Low cost of finding and developing – Strong well performance
Little to no reservoir risk in well-defined trend Technical challenges solved Desire a significant position in the “Game-Changer”
© 2011 Chevron U.S.A. Inc.
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Marcellus Production is a “Game-Changer” Pipeline Flow and Regional Implications
Huge resource base near high demand on east coast Reverses gas flow direction Rockies gas stays west Near major pipeline corridors
Regional / US Impact: Job creation, energy security, lower energy costs, increased revenues to states and income to private landowners. © 2011 Chevron U.S.A. Inc.
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What Chevron Gained from Atlas Acquisition
Outstanding acreage position Strong operating experience in shale gas Foundation for future acquisitions Safe and environmentally responsible Rapidly growing local workforce
© 2011 Chevron U.S.A. Inc.
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What We Acquired Premier Acreage – A Future Legacy Asset 271,000 Antrim acres
>710,000 Marcellus Shale acres
100,000 net acres of Collingwood/Utica Shale
623,000 net acres of Utica Shale 60% operating interest in Reliance Industries JV 49% non-operating interest in Laurel Mountain Midstream JV
New York Michigan Pennsylvania
Ohio West Virginia
© 2011 Chevron U.S.A. Inc.
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Marcellus Overview
714,000 net acres of Marcellus Shale 60% operator of a Marcellus Shale joint venture with Reliance Industries 49% non-operating interest in Laurel Mountain Midstream Recently completed $3 million, 30,000 ft2 addition to Smithfield office. Added 75 employees to AMBU in 2011 Added over 200 employees so far in 2012
© 2011 Chevron U.S.A. Inc.
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Shale Gas Center of Excellence Leveraging Chevron’s Expertise and World-Class Process Over 130 years of oil and gas operations experience to overcome environmental, safety, technical and project management challenges Deploying best practices and technology: – Pad drilling and water management to minimize environmental impact – Well “manufacturing” techniques to reduce costs – Use of 3D seismic to optimize horizontal well path planning
Expertise in horizontal drilling and cutting-edge completion techniques Significant capability in land leasing and management Strategic partnerships and dynamic collaboration to enhance value Long-term / “Generational Commitment” to region
© 2011 Chevron U.S.A. Inc.
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Shared Expectations
The economic benefit of shale gas development should not come at a cost to people or the environment. Chevron operates with an expectation that we share with the American people – the energy we need will be produced safely and reliably.
Š 2011 Chevron U.S.A. Inc.
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Safety Culture
Raoul Martin Construction and Water HES Team Lead
Š 2011 Chevron U.S.A. Inc.
Culture The set of shared attitudes, values, goals, and practices that characterizes an institution or organization - m-w.com definition 5c
Chevron’s Vision: To be the global energy company most admired for it’s people, partnerships and performance. Key Chevron Values: • Partnership • Protecting People and the Environment © 2011 Chevron U.S.A. Inc.
Culture Driving Results
Š 2011 Chevron U.S.A. Inc.
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AMBU: Proud but Dissatisfied DAFWR
TRIR 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0
2010 Rate 4.27 Š 2011 Chevron U.S.A. Inc.
2.5 2 1.5 1 0.5 2011 2.09
2012 1.11
0
2010 Rate 2.13
2011 2012 0.3 0.048 13
Operational Excellence (OE): A Management System to Support the Culture The safety and health of our workforce (employees and contractors) and protection of the environment are core values, and drive the way we do business everyday at AMBU. Operational Excellence (OE) is the Systematic Management of Process Safety, Personal Safety and Health, the Environment, Reliability and Efficiency to achieve World-Class Performance. Stop Work Authority: Every individual, employee, contractor, or visitor, on a Chevron location is responsible and obligated to stop work if there is any doubt around work being done safely. There are no repercussions for stopping work.
Š 2011 Chevron U.S.A. Inc.
Partnership: Business Partners Companies that provide high-quality goods and services with industry-leading safety and environmental performance Must also demonstrate the following “value-added” qualities: – Cost management – Reliability and consistency – Financial viability – Competitive pricing – Customer focus – Innovative business solutions
© 2011 Chevron U.S.A. Inc.
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What is CHESM? The purpose of the Contractor Health Environment and Safety Management (CHESM) Process is to: Ensure Chevron partners with companies that share our values Provide a consistent program to eliminate health, environment and safety incidents and injuries among contractors
© 2011 Chevron U.S.A. Inc.
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What is a CHESM Audit? CHESM evaluates contractors to verify their HES Management System, practices, and performance meet Chevron expectations – applies to all contractors working within the control of Chevron AMBU. – Applies to sub-contractors as well.
The CHESM Audit includes: – Pre-Audit meeting to explain Chevron’s expectations and share examples of what is expected – Chevron Safety Questionnaire completed by contractor – Face to face reviews of all HES programs, policies, accountabilities and work practices – Onsite verification that these programs and policies are implemented in the field
Each contractor is rated A, B, C, D or F. – Chevron focuses its work with A and B rated contractors. © 2011 Chevron U.S.A. Inc.
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Ongoing Support for Contractors
Chevron will assign “contract owners” to manage the relationship and HES performance of each contractor. Meetings are held at least quarterly.
Participation in the Business Partner Safety Improvement Council (BPSIC) – Compromised of a AMBU Senior Level Manager and at least one Executive Level Manager from selected high risk contractors. – The goal is to develop strategies to assure safe work performance, thereby eliminating incidents that can result in injuries, property damage, environmental releases or other negative impacts to workers, the public, and the environment.
Participation in the Joint Health, Environmental, and Safety Improvement Team (JHESIT) – Composed of HES representatives from contractors – Evaluates incidents and areas of improvement throughout operations and develops handbooks, best management practices, and safety alerts to aid in continual improvement
Annual CHESM Forums – All contractors invited – Goal is to share lessons learned, successes, initiatives, and strategic plans to get alignment between Chevron and contractors
© 2011 Chevron U.S.A. Inc.
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Chevron AMBU Supplier Forum
To register for this event – Email AMBUPro@chevron.com or Call 281-575-8155
Current Suppliers – Morning Session.
Topics Include – eProcurement, Category Management, Supplier Diversity, and a message from the AMBU Vice President.
Summary Agenda:
7:30am – Registration
8:30am – Forum Activities
10:30am – Networking With Chevron AMBU team.
© 2011 Chevron U.S.A. Inc.
Prospective Suppliers – Afternoon Session.
Topics Include – Global Energy Impact, Introduction to AMBU Supply Chain Management, and a message from the AMBU Vice President.
Summary Agenda:
12:30pm – Registration
1:30pm – Forum Activities
3:30pm – Networking With Chevron AMBU team. 19
Discussion
Š 2011 Chevron U.S.A. Inc.