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Chevron Corporation

General Development of Business

Chevron Corporation, a Delaware corporation, manages its investments in subsidiaries and affiliates and provides administrative, financial, management and technology support to U.S. and international subsidiaries that engage in integrated energy and chemicals operations. Upstream operations consist primarily of exploring for, developing and producing crude oil and natural gas; processing, liquefaction, transportation and regasification associated with liquefied natural gas; transporting crude oil by major international oil export pipelines; transporting, storage and marketing of natural gas; and a gas-to-liquids plant. Downstream operations consist primarily of refining crude oil into petroleum products; marketing of crude oil and refined products; transporting 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.

Chevron had approximately 51,900 employees (including about 3,300 service station employees). Approximately 25,200 employees (including about 3,100 service station employees), or 49 percent, were employed in U.S. operations.

Overview of Petroleum Industry

Petroleum industry operations and profitability are influenced by many factors. Prices for crude oil, natural gas, petroleum products and petrochemicals are generally determined by supply and demand. Production levels from the members of the Organization of Petroleum Exporting Countries (OPEC), Russia and the United States are the major factors in determining worldwide supply. Demand for crude oil and its products and for natural gas is largely driven by the conditions of local, national and global economies, although weather patterns and taxation relative to other energy sources also play a significant part. Laws and governmental policies, particularly in the areas of taxation, energy and the environment, affect where and how companies conduct their operations and formulate their products and, in some cases, limit their profits directly.

Strong competition exists in all sectors of the petroleum and petrochemical industries in supplying the energy, fuel and chemical needs of industry and individual consumers. Chevron competes with fully integrated, major global petroleum companies, as well as independent and national petroleum companies, for the acquisition of crude oil and natural gas leases and other properties and for the equipment and labor required to develop and operate those properties. In its downstream business, Chevron competes with fully integrated, major petroleum companies, as well as independent refining, marketing, transportation and chemicals entities and national petroleum companies, in the sale or acquisition of various goods or services in many national and international markets.

Chevron’s Strategic Direction

Chevron’s primary objective is to deliver industry-leading results and superior shareholder value in any business environment. In the upstream, the company’s strategy is to deliver industry-leading returns while developing high-value resource opportunities. In the downstream, the company's strategy is to grow earnings across the value chain and make targeted investments to lead the industry in returns.

Description of Business and Properties

The upstream and downstream activities of the company and its equity affiliates are widely dispersed geographically, with operations and projects in North America, South America, Europe, Africa, Asia and Australia.

Net Proved Oil-Equivalent Reserves

At December 31, 2014, 20 percent of the company's net proved reserves were located in Kazakhstan and 19 percent were located in the United States. At December 31, 2015, 21 percent of the company's net proved reserves were located in Kazakhstan and 19 percent were located in the United States. At December 31, 2016, 23 percent of the company's net proved oil-equivalent reserves were located in Kazakhstan, 20 percent were located in Australia and 18 percent were located in the United States. At December 31, 2017, 24 percent of the company's net proved oil-equivalent reserves were located in the United States, 21 percent were located in Australia and 20 percent were located in Kazakhstan.At December 31, 2019, 28 percent of the company’s net proved oil-equivalent reserves were located in the United States, 23 percent were located in Australia and 19 percent were located in Kazakhstan.

Chart: Net Proved Oil-Equivalent Reserves by Country (2019)

Liquids Reserves (Mln of barrels)

Year Consolidated Companies Affiliated Companies Total Liquids
2014 4,285 1,964 6,249
2015 4,262 2,000 6,262
2016 4,131 2,197 6,328
2017 4,530 2,012 6,542
2018 4,975 1,815 6,790
2019 4,771 1,750 6,521

Natural Gas Reserves (Bln of cubic feet)

Year Consolidated Companies Affiliated Companies Total Natural Gas
2014 25,707 3,409 29,116
2015 25,946 3,491 29,437
2016 25,432 3,328 28,760
2017 27,514 3,222 30,736
2018 28,733 2,843 31,576
2019 26,587 2,870 29,457

Oil-Equivalent Reserves (Mln of barrels)

Year Consolidated Companies Affiliated Companies Total Oil-Equivalent
2014 8,570 2,532 11,102
2015 8,586 2,582 11,168
2016 8,370 2,752 11,122
2017 9,116 2,549 11,665
2018 9,764 2,289 12,053
2019 9,202 2,229 11,431

Net Production of Liquids (Thousands of barrels per day)

Country/Region 2017 2016 2015 2014
United States 519 504 501 456
Other Americas

Argentina

19 20 21 21

Brazil

12 16 17 20

Canada

87 83 67 67

Colombia

- - - -

Trinidad and Tobago

- - - -
Total Other Americas 118 119 105 108
Africa

Angola

103 106 110 113

Democratic Republic of the Congo

2 2 2 2

Nigeria

213 208 230 246

Republic of Congo

36 23 18 14
Total Africa 354 339 360 383
Asia

Azerbaijan

23 30 32 26

Bangladesh

4 4 3 2

China

17 18 24 16

Indonesia

137 173 176 149

Kazakhstan

33 37 34 31

Myanmar

- - - -

Philippines

3 3 3 3

Thailand

69 71 66 63
Total Asia 286 336 365 368
Australia/Oceania

Australia

27 21 21 23
Total Australia/Oceania 27 21 21 23
Europe

Denmark

14 14 16 17

United Kingdom

50 43 40 32
Total Europe 64 57 56 52
Total Consolidated Companies 1,368 1,376 1,408 1,390

Affiliates

355 343 336 319
Total Including Affiliates 1,723 1,719 1,723 1,744

Net Production of Natural Gas (Millions of cubic feet per day)

Country/Region 2017 2016 2015 2014
United States 970 1,120 1,310 1,250
Other Americas

Argentina

27 32 36 23

Brazil

4 5 5 6

Canada

65 55 14 10

Colombia

96 127 161 186

Trinidad and Tobago

29 74 116 112
Total Other Americas 221 293 332 337
Africa

Angola

57 52 52 51

Democratic Republic of the Congo

1 1 - 2

Nigeria

223 159 246 236

Republic of Congo

14 11 11 11
Total Africa 295 223 310 301
Asia

Azerbaijan

11 13 12 12

Bangladesh

642 658 720 643

China

81 51 - -

Indonesia

163 182 185 214

Kazakhstan

132 154 138 126

Myanmar

116 128 117 99

Philippines

129 138 122 118

Thailand

1,031 1,051 1,033 1,046
Total Asia 2,305 2,375 2,332 2,276
Australia/Oceania

Australia

1,372 615 439 442
Total Australia/Oceania 1,372 615 439 442
Europe

Denmark

53 48 50 51

United Kingdom

155 122 115 88
Total Europe 208 170 165 173
Total Consolidated Companies 5,371 4,796 4,888 4,779

Affiliates

661 456 381 388
Total Including Affiliates 6,032 5,252 5,269 5,167

Net Production of Oil-Equivalent (Thousands of barrels per day)

Country/Region 2017 2016 2015 2014
United States 681 691 720 664
Other Americas

Argentina

23 26 27 25

Brazil

13 16 18 21

Canada

98 92 69 69

Colombia

16 21 27 31

Trinidad and Tobago

5 12 19 19
Total Other Americas 155 167 160 165
Africa

Angola

112 114 119 121

Democratic Republic of the Congo

2 2 3 3

Nigeria

250 235 270 286

Republic of Congo

38 25 20 16
Total Africa 402 376 412 434
Asia

Azerbaijan

25 32 34 28

Bangladesh

111 114 123 109

China

30 27 24 16

Indonesia

164 203 207 185

Kazakhstan

55 62 56 53

Myanmar

19 21 20 16

Philippines

25 26 23 23

Thailand

241 245 238 238
Total Asia 670 730 753 749
Australia/Oceania

Australia

256 124 94 97
Total Australia/Oceania 256 124 94 97
Europe

Denmark

23 22 24 25

United Kingdom

75 64 59 47
Total Europe 98 86 83 72
Total Consolidated Companies 2,262 2,174 2,222 2,189

Affiliates

466 420 400 382
Total Including Affiliates 2,728 2,594 2,622 2,571

Productive Oil Wells (2017)

Country/Region Gross Net
United States 43,170 29,690
Other Americas 1,049 644
Africa 1,683 639
Asia 14,958 12,891
Australia/Oceania 564 315
Europe 325 71
Total Consolidated Companies 61,749 44,250
Affiliates 1,583 550
Total Including Affiliates 63,332 44,800
Multiple completion wells included above 819 551

Productive Gas Wells (2017)

Country/Region Gross Net
United States 3,273 2,380
Other Americas 129 76
Africa 20 8
Asia 3,780 2,182
Australia/Oceania 95 26
Europe 170 36
Total Consolidated Companies 7,467 4,708
Affiliates 7 2
Total Including Affiliates 7,474 4,710
Multiple completion wells included above 38 32

Developed Crude Oil and Natural Gas Acreage of Company (Thousands of acres)

Country/Region Gross Net
United States 4,189 2,966
Other Americas 1,183 264
Africa 2,243 933
Asia 1,720 975
Australia/Oceania 2,002 803
Europe 407 53
Total Consolidated Companies 11,744 5,994
Affiliates 291 112
Total Including Affiliates 12,035 6,106

Undeveloped Crude Oil and Natural Gas Acreage of Company (Thousands of acres)

Country/Region Gross Net
United States 4,004 3,415
Other Americas 26,249 14,635
Africa 8,432 3,474
Asia 23,243 11,637
Australia/Oceania 25,947 17,198
Europe 2,004 1,004
Total Consolidated Companies 89,879 51,363
Affiliates 513 224
Total Including Affiliates 90,392 51,587

Sales of Natural Gas and Natural Gas Liquids

The company sells natural gas and natural gas liquids (NGLs) from its producing operations under a variety of contractual arrangements. In addition, the company also makes third-party purchases and sales of natural gas and NGLs in connection with its supply and trading activities.

During 2017, U.S. and international sales of natural gas averaged 3.3 billion and 5.1 billion cubic feet per day, respectively, which includes the company’s share of equity affiliates’ sales. Outside the United States, substantially all of the natural gas sales from the company’s producing interests are from operations in Angola, Australia, Bangladesh, Europe, Kazakhstan, Indonesia, Latin America, Myanmar, Nigeria, the Philippines and Thailand.

U.S. and international sales of NGLs averaged 139,000 and 93,000 barrels per day, respectively, in 2017. Substantially all of the international sales of NGLs from the company's producing interests are from operations in Angola, Australia, Canada, Indonesia, Nigeria and the United Kingdom.

Refer to “Selected Operating Data,” on page 39 in Management’s Discussion and Analysis of Financial Condition and Results of Operations, for further information on the company’s sales volumes of natural gas and natural gas liquids. Refer also to “Delivery Commitments” beginning on page 6 for information related to the company’s delivery commitments for the sale of crude oil and natural gas.

Refining Operations

At the end of 2017, the company had a refining network capable of processing nearly 1.7 million barrels of crude oil per day. Operable capacity at December 31, 2017, and daily refinery inputs for 2015 through 2017 for the company and affiliate refineries are summarized in the table on the next page.

Average crude oil distillation capacity utilization during 2017 was 93 percent, compared with 92 percent in 2016. At the U.S. refineries, crude oil distillation capacity utilization averaged 98 percent in 2017, compared with 93 percent in 2016. Chevron processes both imported and domestic crude oil in its U.S. refining operations. Imported crude oil accounted for about 71 percent and 76 percent of Chevron’s U.S. refinery inputs in 2017 and 2016, respectively.

In the United States, the company continued work on projects to improve refinery flexibility and reliability. At the Richmond, California, refinery, the modernization project continued to progress, with start-up of the new hydrogen plant scheduled for second-half 2018, and full operation of the project expected in 2019. At the Salt Lake City, Utah, refinery, construction began for the alkylation retrofit project in July 2017. Project start-up is expected in 2020.

Outside the United States, the Singapore Refining Company (SRC), Chevron's 50 percent-owned joint venture, completed construction of gasoline clean fuels facilities and a cogeneration plant. The two trains at the cogeneration plant were commissioned in first-half 2017, enabling SRC to generate its own electricity and steam supply, improve energy efficiency, and significantly reduce greenhouse gas and sulfur oxide emissions. The gasoline clean fuels facilities enable SRC to produce higher-value gasoline that meets stricter emission standards.

The company completed the sale of its refining assets in British Columbia, Canada, in September 2017. In addition, the company signed an agreement for the sale of its interests in the Cape Town Refinery in South Africa in 2017. The sale is expected to close in 2018, pending local government approval.

Marketing Operations

The company markets petroleum products under the principal brands of “Chevron,” “Texaco” and “Caltex” throughout many parts of the world. The following table identifies the company’s and affiliates’ refined products sales volumes, excluding intercompany sales, for the three years ended December 31, 2017.

In the United States, the company markets under the Chevron and Texaco brands. At year-end 2017, the company supplied directly or through retailers and marketers approximately 7,700 Chevron- and Texaco-branded motor vehicle service stations, primarily in the southern and western states. Approximately 320 of these outlets are company-owned or -leased stations.

Outside the United States, Chevron supplied directly or through retailers and marketers approximately 5,800 branded service stations, including affiliates. The company markets in Latin America using the Texaco brand. In the Asia-Pacific region, southern Africa and the Middle East, the company uses the Caltex brand. The company also operates through affiliates under various brand names. In South Korea, the company operates through its 50 percent-owned affiliate, GS Caltex. In 2017, the company opened Chevron branded stations in northwestern Mexico. In September 2017, the company completed the sale of its marketing assets in British Columbia and Alberta, Canada. The company also signed an agreement for the sale of its marketing and lubricants businesses in southern Africa in 2017. The sale is expected to close in 2018, pending local government approval.

Chevron markets commercial aviation fuel at approximately 100 airports worldwide. The company also markets an extensive line of lubricant and coolant products under the product names Havoline, Delo, Ursa, Meropa, Rando, Clarity and Taro in the United States and worldwide under the three brands: Chevron, Texaco and Caltex.

Chemicals Operations

Chevron Oronite Company develops, manufactures and markets performance additives for lubricating oils and fuels and conducts research and development for additive component and blended packages. At the end of 2017, the company manufactured, blended or conducted research at 10 locations around the world. In November 2017, the company commissioned a new carboxylate plant in Singapore. In 2017, design work continued for a planned manufacturing plant in Ningbo, China, with a final investment decision expected in 2018.

Chevron owns a 50 percent interest in its Chevron Phillips Chemical Company LLC (CPChem) affiliate. CPChem produces olefins, polyolefins and alpha olefins and is a supplier of aromatics and polyethylene pipe, in addition to participating in the specialty chemical and specialty plastics markets. At the end of 2017, CPChem owned or had joint-venture interests in 30 manufacturing facilities and two research and development centers around the world.

During 2017, construction activities were completed on the U.S. Gulf Coast Petrochemicals Project, which is expected to capitalize on advantaged feedstock sourced from shale resource development in North America. The project includes an ethane cracker with an annual design capacity of 1.5 million metric tons of ethylene located at the Cedar Bayou facility and two polyethylene units located in Old Ocean, Texas, with a combined annual design capacity of one million metric tons. Start-up of the polyethylene units was achieved in September 2017. Mechanical completion of the ethane cracker was achieved in December 2017, with commissioning activities continuing in first quarter 2018 and transition to full production expected during second quarter 2018.

Chevron also maintains a role in the petrochemical business through the operations of GS Caltex, a 50 percent-owned affiliate. GS Caltex manufactures aromatics, including benzene, toluene and xylene. These base chemicals are used to produce a range of products, including adhesives, plastics and textile fibers. GS Caltex also produces polypropylene, which is used to make automotive and home appliance parts, food packaging, laboratory equipment, and textiles.

Transportation

Pipelines Chevron owns and operates a network of crude oil, natural gas and product pipelines and other infrastructure assets in the United States. In addition, Chevron operates pipelines for its 50 percent-owned CPChem affiliate. The company also has direct and indirect interests in other U.S. and international pipelines.

Refer to pages 12 and 13 in the Upstream section for information on the West African Gas Pipeline, the Baku-Tbilisi-Ceyhan Pipeline, the Western Route Export Pipeline and the Caspian Pipeline Consortium.

Shipping The company's marine fleet includes both U.S.- and foreign-flagged vessels. The U.S.-flagged vessels are engaged primarily in transporting refined products in the coastal waters of the United States. The foreign-flagged vessels transport crude oil, LNG, refined products and feedstocks in support of the company's global Upstream and Downstream businesses.

All six of the new LNG carriers in support of the company's growing LNG portfolio are in service, with the final two delivered in 2017.

Other Businesses

Research and Technology Chevron's energy technology organization supports upstream and downstream businesses. The company conducts research, develops and qualifies technology, and provides technical services and competency development. The disciplines cover earth sciences, reservoir and production engineering, drilling and completions, facilities engineering, manufacturing, process technology, catalysis, technical computing and health, environment and safety.

Chevron's information technology organization integrates computing, telecommunications, data management, cybersecurity and network technology to provide a digital infrastructure to enable Chevron’s global operations and business processes.

Chevron's technology ventures company supports Chevron's upstream and downstream businesses by bridging the gap between business unit needs and emerging technology solutions developed externally in areas of emerging materials, water management, information technology, power systems and production enhancement.

Environmental Protection The company designs, operates and maintains its facilities to avoid potential spills or leaks and to minimize the impact of those that may occur. Chevron requires its facilities and operations to have operating standards and processes and emergency response plans that address all credible and significant risks identified through site-specific risk and impact assessments. Chevron also requires that sufficient resources be available to execute these plans. In the unlikely event that a major spill or leak occurs, Chevron also maintains a Worldwide Emergency Response Team comprised of employees who are trained in various aspects of emergency response, including post-incident remediation.

To complement the company’s capabilities, Chevron maintains active membership in international oil spill response cooperatives, including the Marine Spill Response Corporation, which operates in U.S. territorial waters, and Oil Spill Response, Ltd., which operates globally. The company is a founding member of the Marine Well Containment Company, whose primary mission is to expediently deploy containment equipment and systems to capture and contain crude oil in the unlikely event of a future loss of control of a deepwater well in the Gulf of Mexico. In addition, the company is a member of the Subsea Well Response Project, which has the objective to further develop the industry’s capability to contain and shut in subsea well control incidents in different regions of the world.

Chevron Products Gallery

Review of Ongoing Exploration and Production Activities in Key Areas

Chevron has exploration and production activities in most of the world's major hydrocarbon basins.

Chevron’s 2017 key upstream activities:

United States

Upstream activities in the United States are primarily located in the midcontinent region, the Gulf of Mexico, California and the Appalachian Basin. Net oil-equivalent production in the United States during 2017 averaged 681,000 barrels per day.

The company's activities in the midcontinent region are primarily in Colorado, New Mexico and Texas. During 2017, net daily production in these areas averaged 134,000 barrels of crude oil, 505 million cubic feet of natural gas and 50,000 barrels of natural gas liquids (NGLs). In 2017, the company divested properties in areas including Colorado, New Mexico, Oklahoma and Texas. The company is pursuing selected opportunities and actively transacting to create value.

In the Permian Basin of West Texas and southeast New Mexico, the company holds approximately 500,000 and 1,200,000 net acres of shale and tight resources in the Midland and Delaware basins, respectively. This acreage includes multiple stacked formations that enable production from several layers of rock in different geologic zones. The stacked plays multiply the basin’s resource and economic potential by allowing for multiple horizontal wells to be developed from a single pad location using shared facilities and infrastructure, which reduces development costs and improves capital efficiency. Chevron has implemented a factory development strategy in the basin, which utilizes multiwell pads to drill a series of horizontal wells that are completed concurrently using hydraulic fracture stimulation. In 2017, the company deployed a new basis of design, resulting in improved economics. The company is also applying data analytics and petrophysical technology on its Permian well information to drive improvements in well targets and performance. The company drilled 130 wells and participated in 180 nonoperated wells in the Midland and Delaware basins in 2017.

During 2017, net daily production in the Gulf of Mexico averaged 165,000 barrels of crude oil, 122 million cubic feet of natural gas and 13,000 barrels of NGLs. In 2017, the company divested its remaining operated offshore assets in the shelf area. All remaining shelf assets are non-operated interests. Chevron is also engaged in various exploration, development and production activities in the deepwater Gulf of Mexico.

The deepwater Jack and St. Malo fields are being jointly developed with a host floating production unit (FPU) located between the two fields. Chevron has a 50 percent interest in the Jack Field and a 51 percent interest in the St. Malo Field. Both fields are company operated. The company has a 40.6 percent interest in the production host facility, which is designed to accommodate production from the Jack/St. Malo development and third-party tiebacks. Total daily production from the Jack and St. Malo fields in 2017 averaged 116,000 barrels of liquids (59,000 net) and 18 million cubic feet of natural gas (9 million net). Production ramp-up and development drilling for the first development phase was completed in 2017. In addition, development drilling continued on Stage 2, the second phase of the development plan, with three of the four planned wells completed. Stage 3 includes three additional development wells. Stage 3 drilling began in second quarter 2017; execution is expected to continue in 2018. Proved reserves have been recognized for these phases. Production from the Jack/St. Malo development is expected to ramp up to a total daily rate of 142,000 barrels of crude oil and 36 million cubic feet of natural gas. The Jack and St. Malo fields have an estimated remaining production life of 30 years.

At the 58 percent-owned and operated deepwater Tahiti Field, net daily production averaged 45,000 barrels of crude oil, 18 million cubic feet of natural gas, and 3,000 barrels of NGLs. Infill drilling continued in 2017. The Tahiti Vertical Expansion Project is the next development phase of the Tahiti Field, developing shallower reservoirs and encompassing four new wells and associated subsea infrastructure. All wells have been drilled, and facility installation work has commenced. First oil is expected in second-half 2018. Proved reserves have been recognized for this project. The Tahiti Field has an estimated production life of at least 20 years.

The company has a 15.6 percent nonoperated working interest in the deepwater Mad Dog Field. In 2017, net daily production averaged 8,000 barrels of liquids and 1 million cubic feet of natural gas. The next development phase, the Mad Dog 2 Project, is planned to develop the southwestern extension of the Mad Dog Field. The development plan includes a new

floating production platform with a design capacity of 140,000 barrels of crude oil per day. A final investment decision was reached in February 2017. First oil is expected in 2021. At the end of 2017, proved reserves have been recognized for the Mad Dog 2 Project.

The development plan for the 60 percent-owned and operated deepwater Big Foot Project includes a 15-slot drilling and production tension leg platform (TLP) with water injection facilities and a design capacity of 75,000 barrels of crude oil and 25 million cubic feet of natural gas per day. The TLP has been moored in its final location; installation is expected to be completed in second quarter 2018. First oil is expected in late 2018. The field has an estimated production life of 35 years from the time of start-up. Proved reserves have been recognized for this project.

Chevron holds a 25 percent nonoperated working interest in the Stampede Project, the unitized development of the deepwater Knotty Head and Pony discoveries. The planned facilities have a design capacity of 80,000 barrels of crude oil and 40 million cubic feet of natural gas per day. Installation of the TLP and subsea infrastructure was completed in 2017, with first oil achieved in January 2018. The field has an estimated production life of 30 years from the time of start-up. Proved reserves have been recognized for this project.

During 2017 and early 2018, the company participated in two appraisal wells and four exploration wells in the deepwater Gulf of Mexico. Chevron has operated working interests of 55 to 61.3 percent in the blocks containing the Anchor Field. The appraisal drilling program for the Anchor Field concluded in 2017 with the successful Anchor appraisal well. The company filed for Suspension of Production (SOP) in January 2018. The SOP is intended to hold the associated leases as the planned development matures. Activities are underway to mature a cost effective development plan.

Chevron is the operator of an exploration and appraisal program and potential development named Tigris, covering several jointly held offshore leases in the northwest portion of Keathley Canyon. This area may have the potential to support a cost-effective, deepwater hub development of multiple fields to a new central host. Activities are underway to mature the development plan. Exploration and appraisal activities have been completed at the 50 percent-owned Tiber and Guadalupe fields. The company has obtained an SOP for the Tiber Unit, and recently filed for an SOP on the Guadalupe Unit. Adjacent leases containing the Gibson prospect are expected to be part of the development.

During 2017 and early 2018, the company participated in successful discovery and appraisal wells at the nonoperated Whale prospect in the Perdido area, which resulted in a significant crude oil discovery. Chevron has a 40 percent working interest in the Whale prospect. Chevron announced a significant crude oil discovery in the 60 percent-owned and operated Ballymore prospect in January 2018. Ballymore is located in the Mississippi Canyon area, approximately 3 miles from Chevron's Blind Faith Platform. A sidetrack well is currently being drilled to further assess the discovery.

Chevron added 35 leases to its deepwater portfolio as a result of awards from the central Gulf of Mexico Lease Sale 247, held in March 2017, and Lease Sale 249, held in August 2017. Chevron also added 10 additional leases through asset swaps.

In California, the company has significant production in the San Joaquin Valley. In 2017, net daily production averaged 148,000 barrels of crude oil, 53 million cubic feet of natural gas and 2,000 barrels of NGLs.

The company holds approximately 423,000 net acres in the Marcellus Shale and 450,000 net acres in the Utica Shale, primarily located in southwestern Pennsylvania, eastern Ohio and the West Virginia panhandle. During 2017, net daily production in these areas averaged 290 million cubic feet of natural gas, 5,000 barrels of NGLs and 2,000 barrels of condensate. Chevron has implemented a factory development strategy, which enables co-development of the Marcellus and Utica shales from the same pads in stacked play locations.

Other Americas

“Other Americas” includes Argentina, Brazil, Canada, Colombia, Greenland, Mexico, Suriname and Venezuela. Net oil-equivalent production from these countries averaged 210,000 barrels per day during 2017.

Canada Upstream activities in Canada are concentrated in Alberta, British Columbia and the offshore Atlantic region. The company also has exploration interests in the Beaufort Sea region of the Northwest Territories. Net oil-equivalent production during 2017 averaged 98,000 barrels per day, composed of 36,000 barrels of crude oil, 65 million cubic feet of natural gas and 51,000 barrels of synthetic oil from oil sands.

Chevron holds a 26.9 percent nonoperated working interest in the Hibernia Field and a 23.7 percent nonoperated working interest in the unitized Hibernia Southern Extension (HSE) areas offshore Atlantic Canada.

The company holds a 29.6 percent nonoperated working interest in the heavy oil Hebron Field, also offshore Atlantic Canada. The development plan includes a platform with a design capacity of 150,000 barrels of crude oil per day. The

platform was installed at the offshore location in June 2017. First oil was achieved in November 2017. The project has an expected economic life of 30 years.

In the Flemish Pass Basin offshore Newfoundland, Chevron holds a 40 percent nonoperated working interest in two exploration blocks, EL1125 and EL1126. In addition, the company holds a 35 percent-owned and operated interest in Block EL1138.

The company holds a 20 percent nonoperated working interest in the Athabasca Oil Sands Project (AOSP) in Alberta. Oil sands are mined from both the Muskeg River and the Jackpine mines, and bitumen is extracted from the oil sands and upgraded into synthetic oil. Carbon dioxide emissions from the upgrade process are reduced by the Quest carbon capture and storage facilities.

The company holds approximately 228,000 net acres in the Duvernay Shale in Alberta. Chevron has a 70 percent-owned and operated interest in most of the Duvernay acreage. Drilling continued during 2017 on an appraisal and land retention program. In November 2017, Chevron announced plans for the initial development program on approximately 55,000 net acres of its operated position in the Duvernay play. A total of 92 wells had been tied into production facilities by early 2018.

Chevron holds a 50 percent-owned and operated interest in the proposed Kitimat LNG and Pacific Trail Pipeline projects and a 50 percent interest in 290,000 net acres in the Horn River and Liard shale gas basins in British Columbia. The horizontal appraisal drilling program progressed during 2017. The Kitimat LNG Project is planned to include a two-train LNG facility and has a 10.0 million-metric-ton-per-year export license. The total production capacity for the project is expected to be 1.6 billion cubic feet of natural gas per day. Spending is being paced until LNG market conditions and reductions in project costs are sufficient to support the development of this project. At the end of 2017, proved reserves had not been recognized for this project.

Greenland Chevron held a 29.2 percent-owned and operated interest in two exploration blocks off the northeast coast of Greenland. The company informed the government of Greenland of its intent to relinquish these blocks in late 2017 following completion of a multi-year seismic program.

Mexico The company operates and holds a 33.3 percent working interest in Block 3 in the Perdido area of the Gulf of Mexico. The block covers 139,000 net acres. In 2017, activities for a seismic reprocessing project began. Chevron continues to evaluate additional exploration opportunities. In January 2018, a Chevron-led consortium was the successful bidder on an exploration license for Block 22 in the deepwater Cuenca Salina area of the Gulf of Mexico. Following license execution expected in May 2018, the company will operate and hold a 37.5 percent working interest in Block 22 which covers 267,000 net acres.

Argentina Chevron holds a 50 percent nonoperated interest in the Loma Campana and Narambuena concessions in the Vaca Muerta Shale covering 73,000 net acres. Chevron also holds an 85 percent-owned and operated interest in the El Trapial concession covering 94,000 net acres with both conventional production and Vaca Muerta Shale potential. Net oil-equivalent production in 2017 averaged 23,000 barrels per day, composed of 19,000 barrels of crude oil and 27 million cubic feet of natural gas.

Nonoperated development activities continued in 2017 at the Loma Campana concession in the Vaca Muerta Shale. During 2017, 24 horizontal wells were drilled, and the drilling program is expected to continue in 2018.

The company utilizes waterflood operations to mitigate declines at the operated El Trapial Field and continues to evaluate the potential of the Vaca Muerta Shale. The El Trapial concession expires in 2032. Chevron plans to start a shale appraisal program in late 2018.

Evaluation of the nonoperated Narambuena Block continued in 2017. Chevron was the successful bidder in November 2017 on the Loma del Molle Norte Block adjacent to the El Trapial concession.

Brazil Chevron holds interests in the Frade (51.7 percent-owned and operated) and Papa-Terra (37.5 percent, nonoperated) deepwater fields located in the Campos Basin. In June 2017, the concession that includes the Frade Field was extended from 2025 to 2041, contingent on additional field development. The company is progressing a redevelopment plan. The concession that includes the Papa-Terra Field expires in 2032, and the remaining scope of the development plan is under evaluation. Drilling operations restarted at year-end 2017. Net oil-equivalent production in 2017 averaged 13,000 barrels per day, composed of 12,000 barrels of crude oil and 4 million cubic feet of natural gas.

Additionally, Chevron holds a 50 percent-owned and operated interest in Block CE-M715, located in the Ceara Basin offshore Brazil. Final 3-D seismic data was received in second quarter 2017 and is being evaluated.

Colombia The company operates the offshore Chuchupa and onshore Ballena natural gas fields and receives 43 percent of the production for the remaining life of each field. Net production in 2017 averaged 96 million cubic feet of natural gas per day.

Suriname Chevron holds a 33.3 percent and a 50 percent nonoperated working interest in deepwater Blocks 42 and 45 offshore Suriname, respectively. An exploratory well is planned in Block 45 in 2018.

Trinidad and Tobago In August 2017, the company sold its nonoperated working interest in the East Coast Marine Area and its operated interest in the Manatee Field.

Venezuela Chevron's production activities in Venezuela are located in western Venezuela and the Orinoco Belt. Net oil-equivalent production during 2017 averaged 55,000 barrels per day, composed of 52,000 barrels of crude oil, and 15 million cubic feet of natural gas.

Chevron has a 30 percent interest in the Petropiar affiliate that operates the Hamaca heavy oil production and upgrading project located in Venezuela’s Orinoco Belt under an agreement expiring in 2033. Petropiar drilled 70 development wells in 2017. Chevron also holds a 39.2 percent interest in the Petroboscan affiliate that operates the Boscan Field in western Venezuela and a 25.2 percent interest in the Petroindependiente affiliate that operates the LL-652 Field in Lake Maracaibo, both of which are under agreements expiring in 2026. Petroboscan drilled 26 development wells in 2017.

Chevron also holds a 34 percent interest in the Petroindependencia affiliate, which includes the Carabobo 3 heavy oil project located within the Orinoco Belt.

Africa

In Africa, the company is engaged in upstream activities in Angola, Democratic Republic of the Congo, Liberia, Morocco, Nigeria and Republic of Congo. Net oil-equivalent production averaged 453,000 barrels per day during 2017 in this region.

Angola The company operates and holds a 39.2 percent interest in Block 0, a concession adjacent to the Cabinda coastline, and a 31 percent interest in a production-sharing contract (PSC) for deepwater Block 14. The concession for Block 0 extends through 2030 and the development and production rights for the various producing fields in Block 14 expire between 2023 and 2028. During 2017, net production averaged 113,000 barrels of liquids and 302 million cubic feet of natural gas per day.

The main production facility of the second stage of the Mafumeira Field development was brought on line in February 2017 and production ramp-up is expected to continue through 2018. Water injection support began in May 2017, and gas export to Angola LNG began in July 2017.

Chevron has a 36.4 percent interest in Angola LNG Limited, which operates an onshore natural gas liquefaction plant in Soyo, Angola. The plant has the capacity to process 1.1 billion cubic feet of natural gas per day. This is the world's first LNG plant supplied with associated gas, where the natural gas is a byproduct of crude oil production. Feedstock for the plant originates from multiple fields and operators. Total daily production in 2017 averaged 674 million cubic feet of natural gas (245 million net) and 27,000 barrels of NGLs (10,000 barrels net).

Angola-Republic of Congo Joint Development Area Chevron operates and holds a 31.3 percent interest in the Lianzi Unitization Zone, located in an area shared equally by Angola and Republic of Congo. Production from Lianzi is reflected in the totals for Angola and Republic of Congo.

Democratic Republic of the Congo Chevron has a 17.7 percent nonoperated working interest in an offshore concession. In December 2017, the concession was extended 20 years, until 2043. Net production in 2017 averaged 2,000 barrels of crude oil per day.

Republic of Congo Chevron has a 31.5 percent nonoperated working interest in the offshore Haute Mer permit areas (Nkossa, Nsoko and Moho-Bilondo). The licenses for Nsoko, Nkossa, and Moho-Bilondo expire in 2018, 2027 and 2030, respectively. Net production averaged 36,000 barrels of liquids per day in 2017.

In March 2017, production started at the new TLP and floating production unit (FPU) facilities hub in the Moho-Bilondo development area. Miocene and Albian development drilling continued in 2017. Total daily production in 2017 averaged 72,000 barrels of crude oil (20,000 barrels net).

Two exploration wells are planned to be drilled in 2018, with one in the Moho Bilondo area and one in the 20.4 percent nonoperated working interest Haute Mer B area.

Liberia Chevron operates and holds a 45 percent interest in Block LB-14 off the coast of Liberia. The LB-14 PSC expires in 2018.

Morocco The company holds a 45 percent interest in two operated deepwater areas offshore Morocco. In 2017, the evaluation of 3-D seismic data continued. In 2017, the company surrendered its interest in the Cap Rhir Deep acreage.

Nigeria Chevron holds a 40 percent interest in eight operated concessions in the onshore and near-offshore regions of the Niger Delta. The company also holds acreage positions in three operated and six nonoperated deepwater blocks, with working interests ranging from 20 percent to 100 percent. In 2017, the company’s net oil-equivalent production in Nigeria averaged 250,000 barrels per day, composed of 207,000 barrels of crude oil, 223 million cubic feet of natural gas and 6,000 barrels of liquefied petroleum gas.

Chevron operates and holds a 67.3 percent interest in the Agbami Field, located in deepwater Oil Mining Lease (OML) 127 and OML 128. The first two phases of infill drilling, Agbami 2 and Agbami 3, are complete. The third phase of infill drilling has commenced to further offset field decline. The leases that contain the Agbami Field expire in 2023 and 2024.

Also in the deepwater area, the Aparo Field in OML 132 and OML 140 and the third-party-owned Bonga SW Field in OML 118 share a common geologic structure and are planned to be jointly developed. Chevron holds a 16.6 percent nonoperated working interest in the unitized area. The development plan involves subsea wells tied back to a floating production, storage and offloading vessel (FPSO). Work continues on optimizing project scope and cost. At the end of 2017, no proved reserves were recognized for this project.

In deepwater exploration, Chevron operates and holds a 55 percent interest in the deepwater Nsiko discoveries in OML 140. A 3-D seismic acquisition is planned for OML 140 in 2018. Chevron also holds a 30 percent nonoperated working interest in OML 138, which includes the Usan Field and several satellite discoveries, and a 27 percent interest in adjacent licenses OML 139 and Oil Prospecting License (OPL) 223. In 2017, the company continued to evaluate development options for the multiple discoveries in the Usan area, including the Owowo Field that straddles OML 139 and OPL 223.

In the Niger Delta region, Chevron is executing a 36-well infill drilling program to offset oil decline and increase production. The program achieved net production of 13,000 barrels of crude oil per day at the end of 2017. The company is the operator of the Escravos Gas Plant (EGP) with a total processing capacity of 680 million cubic feet per day of natural gas and an LPG and condensate export capacity of 58,000 barrels per day. The company is also the operator of the 33,000-barrel-per-day Escravos gas-to-liquids facility. Optimization of these facilities continued in 2017. Construction activities were completed in 2017 on the 40 percent-owned and operated Sonam Field Development Project, which is designed to process natural gas through the EGP facilities and is expected to deliver 215 million cubic feet of natural gas per day to the domestic market and produce a total of 30,000 barrels of liquids per day. Production commenced in June 2017 and is expected to continue ramping up in 2018.

In addition, the company holds a 36.7 percent interest in the West African Gas Pipeline Company Limited affiliate, which supplies Nigerian natural gas to customers in Benin, Ghana and Togo.

Asia

In Asia, the company is engaged in upstream activities in Azerbaijan, Bangladesh, China, Indonesia, Kazakhstan, the Kurdistan Region of Iraq, Myanmar, the Partitioned Zone located between Saudi Arabia and Kuwait, the Philippines, Russia, and Thailand. During 2017, net oil-equivalent production averaged 1,030,000 barrels per day in this region.

Azerbaijan Chevron holds a nonoperated interest in the Azerbaijan International Operating Company (AIOC) and the crude oil production from the Azeri-Chirag-Gunashli (ACG) fields. AIOC operations are conducted under a PSC. In November 2017, the PSC was extended from 2024 to 2049. As part of the extension agreement, the company's interest in AIOC was reduced from 11.3 percent to 9.6 percent. Net oil-equivalent production in 2017 averaged 25,000 barrels per day, composed of 23,000 barrels of crude oil and 11 million cubic feet of natural gas.

Chevron also has an 8.9 percent interest in the Baku-Tbilisi-Ceyhan (BTC) pipeline affiliate, which transports the majority of ACG production from Baku, Azerbaijan, through Georgia to Mediterranean deepwater port facilities at Ceyhan, Turkey. The BTC pipeline has a capacity of 1 million barrels per day. Another production export route for crude oil is the Western Route Export Pipeline (WREP), which is operated by AIOC. During 2017, WREP transported approximately 77,000 barrels per day from Baku, Azerbaijan, to a marine terminal at Supsa, Georgia, on the Black Sea.

Kazakhstan Chevron has a 50 percent interest in the Tengizchevroil (TCO) affiliate and an 18 percent nonoperated working interest in the Karachaganak Field. Net oil-equivalent production in 2017 averaged 415,000 barrels per day, composed of 326,000 barrels of liquids and 533 million cubic feet of natural gas.

TCO is developing the Tengiz and Korolev crude oil fields in western Kazakhstan under a concession agreement that expires in 2033. Net daily production in 2017 from these fields averaged 272,000 barrels of crude oil, 401 million cubic feet of natural gas and 21,000 barrels of NGLs. All of TCO’s crude oil production was exported through the Caspian Pipeline Consortium (CPC) pipeline.

he Future Growth and Wellhead Pressure Management Project (FGP/WPMP) at Tengiz is being managed as a single integrated project. The FGP is designed to increase total daily production by about 260,000 barrels of crude oil and to expand the utilization of sour gas injection technology proven in existing operations to increase ultimate recovery from the reservoir. The WPMP is designed to maintain production levels in existing plants as reservoir pressure declines. Project execution advanced through 2017. Fabrication of process modules is underway, and gas turbine generators are being constructed. Dredging is complete, and other activities for the initiation of port operations are underway. Infrastructure work and site construction are progressing, and three drilling rigs are in operation on the multi-well pads. First oil is planned for 2022. Proved reserves have been recognized for the FGP/WPMP.

The Capacity and Reliability (CAR) Project is designed to reduce facility bottlenecks and increase plant capacity and reliability at Tengiz. Construction activities for the CAR Project progressed during 2017, with project completion projected for second quarter 2018. Proved reserves have been recognized for the CAR Project.

The Karachaganak Field is located in northwest Kazakhstan, and operations are conducted under a PSC that expires in 2038. During 2017, net daily production averaged 33,000 barrels of liquids and 132 million cubic feet of natural gas. Most of the exported liquids were transported through the CPC pipeline. Work continues on identifying the optimal scope for the future expansion of the field. At year-end 2017, proved reserves had not been recognized for a future expansion.

Kazakhstan/Russia Chevron has a 15 percent interest in the CPC. During 2017, CPC transported an average of 1,180,000 barrels of crude oil per day, composed of 1,060,000 barrels per day from Kazakhstan and 120,000 barrels per day from Russia. In 2017, work was completed on the expansion of the pipeline, reaching the design capacity of 1.4 million per day. The expansion provides additional transportation capacity that accommodates a portion of the future growth in TCO production.

Bangladesh Chevron operates and holds a 100 percent interest in Block 12 (Bibiyana Field) and Blocks 13 and 14 (Jalalabad and Moulavi Bazar fields). The rights to produce from Jalalabad expire in 2024, from Moulavi Bazar in 2028 and from Bibiyana in 2034. Net oil-equivalent production in 2017 averaged 111,000 barrels per day, composed of 642 million cubic feet of natural gas and 4,000 barrels of condensate. In third quarter 2017, the company announced its intent to retain its assets in Bangladesh.

Myanmar Chevron has a 28.3 percent nonoperated working interest in a PSC for the production of natural gas from the Yadana, Badamyar and Sein fields, within Blocks M5 and M6, in the Andaman Sea. The PSC expires in 2028. The company also has a 28.3 percent nonoperated interest in a pipeline company that transports natural gas to the Myanmar-Thailand border for delivery to power plants in Thailand. Net natural gas production in 2017 averaged 116 million cubic feet per day.

The Badamyar-Low Compression Platform (LCP) expansion project in Block M5 was brought on line in May 2017. The Badamyar-LCP is designed to maintain production from the Yadana Field by lowering wellhead pressure.

Chevron also holds a 99 percent-owned and operated interest in Block A5. Evaluation of a 3-D seismic survey that was completed in December 2015 continued in 2017. Additional seismic processing and interpretation is expected in 2018.

Thailand Chevron holds operated interests in the Pattani Basin, located in the Gulf of Thailand, with ownership ranging from 35 percent to 80 percent. Concessions for producing areas within this basin expire between 2022 and 2035. Chevron also has a 16 percent nonoperated working interest in the Arthit Field located in the Malay Basin. Concessions for the producing areas within this basin expire between 2036 and 2040. Net oil-equivalent production in 2017 averaged 241,000 barrels per day, composed of 69,000 barrels of crude oil and condensate and 1.0 billion cubic feet of natural gas.

In the Pattani Basin, the 35 percent-owned and operated Ubon Project in Block 12/27 entered front-end engineering and design (FEED) in third quarter 2017 with an updated development concept that optimizes oil and gas production profiles. At the end of 2017, proved reserves have not been recognized for this project.

During 2017, the company drilled two exploration wells in the Malay Basin, and both wells were successful. The company also holds exploration interests in the Thailand-Cambodia overlapping claim area that are inactive, pending resolution of border issues between Thailand and Cambodia.

China Chevron has operated and nonoperated working interests in several areas in China. The company’s net daily production in 2017 averaged 17,000 barrels of crude oil and 81 million cubic feet of natural gas.

The company operates the 49 percent-owned Chuandongbei Project, located onshore in the Sichuan Basin. The Xuanhan Gas Plant has three gas processing trains with a design outlet capacity of 258 million cubic feet per day. Total daily production in 2017 averaged 177 million cubic feet of natural gas (81 million net).

The company also has nonoperated working interests of 24.5 percent in the QHD 32-6 Field and 16.2 percent in Block 11/19 in the Bohai Bay, and 32.7 percent in Block 16/19 in the Pearl River Mouth Basin. The PSCs for these producing assets expire between 2022 and 2028.

Philippines The company holds a 45 percent nonoperated working interest in the Malampaya natural gas field, offshore Philippines. Net oil-equivalent production in 2017 averaged 25,000 barrels per day, composed of 129 million cubic feet of natural gas and 3,000 barrels of condensate. The concession expires in 2024.

In December 2017, the company sold its geothermal assets in the Philippines.

Indonesia Chevron holds working interests through various PSCs in Indonesia. In Sumatra, the company holds a 100 percent-owned and operated interest in the Rokan PSC. Chevron also operates four PSCs in the Kutei Basin, located offshore eastern Kalimantan. These interests range from 62 percent to 92.5 percent. Net oil-equivalent production in 2017 averaged 164,000 barrels per day, composed of 137,000 barrels of liquids and 163 million cubic feet of natural gas. In 2016, Chevron advised the government of Indonesia of its intent not to extend the East Kalimantan PSC and to return the assets to the government upon PSC expiration in fourth quarter 2018.

The largest producing field is Duri, located in the Rokan PSC. Duri has been under steamflood since 1985 and is one of the world’s largest steamflood developments. Infill drilling and workover programs continued in 2017. The Rokan PSC expires in 2021.

There are two deepwater natural gas development projects in the Kutei Basin progressing under a single plan of development. Collectively, these projects are referred to as the Indonesia Deepwater Development. One of these projects, Bangka, includes a two-well subsea tieback to the West Seno FPU. The company’s interest is 62 percent. Net daily production from Bangka in 2017 averaged 49 million cubic feet of natural gas and 2,000 barrels of condensate.

The other project, Gendalo-Gehem, has a planned design capacity of 1.1 billion cubic feet of natural gas and 47,000 barrels of condensate per day. The company's interest is approximately 63 percent. The company continues to work toward a final investment decision, subject to the timing of government approvals, including extension of the associated PSCs, and securing new LNG sales contracts. The project is being reviewed for opportunities to reduce project cost. At the end of 2017, proved reserves have not been recognized for this project.

In March 2017, the company sold its geothermal assets in Indonesia.

In August 2017, the company sold its South Natuna Sea Block B assets in Indonesia.

Kurdistan Region of Iraq The company operates and holds 80 percent contractor interests in the Sarta PSC. In fourth quarter 2017, drilling commenced on the first appraisal well. The well is planned to be completed in second-half 2018.

Partitioned Zone Chevron holds a concession to operate the Kingdom of Saudi Arabia's 50 percent interest in the hydrocarbon resources in the onshore area of the Partitioned Zone between Saudi Arabia and Kuwait. The concession expires in 2039. Beginning in May 2015, production in the Partitioned Zone was shut in as a result of continued difficulties in securing work and equipment permits. As of early 2018, production remains shut in, and the exact timing of a production restart is uncertain and dependent on dispute resolution between Saudi Arabia and Kuwait.

Processing of the 3-D seismic survey, which was acquired in 2016 and covers the entire onshore Partitioned Zone, was completed in second quarter 2017. Work continues to interpret the results.

Australia/Oceania

In Australia/Oceania, the company is engaged in upstream activities in Australia and New Zealand. During 2017, net oil-equivalent production averaged 256,000 barrels per day, all from Australia.

Australia Upstream activities in Australia are concentrated offshore Western Australia, where the company is the operator of two major LNG projects, Gorgon and Wheatstone, and has a nonoperated working interest in the North West Shelf (NWS) Venture and exploration acreage in the Browse Basin and the Carnarvon Basin. The company also holds exploration acreage in the Bight Basin offshore South Australia. During 2017, the company's production averaged 27,000 barrels of liquids and 1.4 billion cubic feet of natural gas per day.

Chevron holds a 47.3 percent interest in and is the operator of the Gorgon Project, which includes the development of the Gorgon and Jansz-Io fields. The project includes a three-train, 15.6 million-metric-ton-per-year LNG facility, a carbon dioxide injection facility and a domestic gas plant, which are located on Barrow Island. The total production capacity for the project is approximately 2.6 billion cubic feet of natural gas and 20,000 barrels of condensate per day. LNG Train 3 start-up was achieved in March 2017. Total daily production from all three trains in 2017 averaged 1.9 billion cubic feet of natural gas (905 million net) and 14,000 barrels of condensate (7,000 barrels net). The project's estimated economic life exceeds 40 years.

Chevron holds an 80.2 percent interest in the offshore licenses and a 64.1 percent interest in the LNG facilities associated with the Wheatstone Project. The project includes the development of the Wheatstone and Iago fields, a two-train, 8.9 million-metric-ton-per-year LNG facility, and a domestic gas plant. The onshore facilities are located at Ashburton North on the coast of Western Australia. The total production capacity for the Wheatstone and Iago fields and nearby third-party fields is expected to be approximately 1.6 billion cubic feet of natural gas and 30,000 barrels of condensate per day. LNG Train 1 start-up and first cargo were achieved in October 2017. Train 2 start-up operations are underway, and first LNG is expected in second quarter 2018. The project's estimated economic life exceeds 30 years.

Chevron has a 16.7 percent nonoperated working interest in the NWS Venture in Western Australia. The concession for the NWS Venture expires in 2034.

During 2017, the company acquired 50 percent operated interests in four additional exploration permits in the northern Carnarvon Basin. Chevron expects to continue to evaluate exploration potential in the Carnarvon Basin during 2018.

The company holds nonoperated working interests ranging from 24.8 percent to 50 percent in three exploration blocks in the Browse Basin.

The company operates and holds a 100 percent interest in offshore Blocks EPP44 and EPP45 in the Bight Basin. In October 2017, the company discontinued the exploration program and informed the Government of Australia of the company's intent to exit from the Bight Basin.

New Zealand Chevron holds a 50 percent interest and operates three deepwater exploration permits in the offshore Pegasus and East Coast basins. Acquisition of 3-D seismic data was completed in second quarter 2017, and processing of the data is continuing.

Europe

In Europe, the company is engaged in upstream activities in Denmark, Norway and the United Kingdom. Net oil-equivalent production averaged 98,000 barrels per day during 2017.

Denmark Chevron holds a 12 percent nonoperated working interest in the Danish Underground Consortium, which produces crude oil and natural gas from 13 North Sea fields. The concession expires in 2042. Net oil-equivalent production in 2017 averaged 23,000 barrels per day, composed of 14,000 barrels of crude oil and 53 million cubic feet of natural gas.

United Kingdom The company’s net oil-equivalent production in 2017 averaged 75,000 barrels per day, composed of 50,000 barrels of liquids and 155 million cubic feet of natural gas.

The Captain Enhanced Oil Recovery Project is the next development phase of the Captain Field and is designed to increase field recovery by injecting a polymer/water mixture. In 2017, two polymer injection pilots were successfully completed and the company reached a final investment decision on Captain EOR Stage 1, which includes an expansion of the existing polymer injection system on the wellhead production platform, six new polymer injection wells and modifications to the platform facilities. At the end of 2017, proved reserves have been recognized for the Stage 1 project. Also during 2017, FEED activities continued to progress on Captain EOR Stage 2, which involves subsea expansion of the technology. At the end of 2017, proved reserves had not been recognized for Stage 2 of the project.

During 2017, hook-up and commissioning activities advanced for the Clair Ridge Project, located west of the Shetland Islands, in which the company has a 19.4 percent nonoperated working interest. The project is the second development phase of the Clair Field. The design capacity of the project is 120,000 barrels of crude oil and 100 million cubic feet of natural gas per day. First production is expected in 2018. The Clair Field has an estimated production life extending until 2050. Proved reserves have been recognized for the Clair Ridge Project.

At the 40 percent-owned and operated Rosebank Project northwest of the Shetland Islands, the selected design is a subsea development tied back to an FPSO with natural gas exported via pipeline. The design capacity of the project is 100,000 barrels of crude oil and 80 million cubic feet of natural gas per day. FEED activities continued to progress in 2017, with focus on subsurface characterization and cost optimization. At the end of 2017, proved reserves had not been recognized for this project.

Norway The company holds a 20 percent nonoperated working interest in exploration Block PL 859, located in the Barents Sea. An exploration well was drilled in 2017, which resulted in noncommercial quantities of gas. A second well is scheduled for 2018 to further evaluate the potential of the license.