Chevron Base Oils Feb 2013 General Slides

Chevron Base Oils
2013 Chevron U.S.A. Inc.
Confidential
February 2013
Chevron Continues to Invest in the Group II Base Oil

Market
Chevron has and is continuing to increase its base oil
production capacity
Richmond, USA Expanded Q2 07
Yeosu, S Korea On line Q4 07 (JV with GSH*)
Pascagoula, USA Q4 2013
Preparing market for further premium base oil growth
De bottleneck generating further capacity
20
Global Market Share, %
Global Base Oil Capacity

Premium Base Oil - 2013
15
10
Strong commitment for uninterrupted supply globally

leading up to start up of Pascagoula base oil plant
Source: Lubes N Greases 2010 Wall Map
Equity ownership is included for joint ventures
Chevron market proposition
Multiple supply sources
Global product slate
Strong portfolio of product qualifications
Proven logistics and security of supply
Growing demand for premium base oils
Group II has significant potential for meeting increased demand for Low/Mid SAPS applications
Group II can be used in vast majority of lubricant applications

* Operated by GSC
Confidential
February 2013
Trends in base stock usage are changing
Industry and OEM specifications require the use of higher performing

base oils
Manufacturing complexity for lubricant blenders will increase.
However, use of Group II base oils can play a significant role in
optimising formulations and reducing manufacturing complexity
Group II base oils:
Optimise levels of Group III in formulations
Proven use in modern automotive and industrial applications
Blending plant, product development and procurement strategies

need to align
Confidential
February 2013
European 2011 PCMO and HDMO market

by viscosity grade
700,0
Slowly trending to lighter viscosity

grades for factory fill and service
fill applications
600,0
kMT
500,0
400,0
PCMO
HDMO
300,0
5W-X & below

10W-X & below
200,0
Performance criteria and viscosity

grade determine base oil selection
100,0
0,0
Industry and OEM specifications

mandate different performance
criteria within viscosity grades
PCMO
Manufacturing and supply

complexity will increase
HDMO
Source:
Kline
Confidential
February 2013
Low SAPS HDMO And PCMO Specifications Require

The Use Of Low Sulphur Base Oils
Phosphorus
0.12%
PCMO
HDMO
API CJ-4
ACEA E9
ACEA E6
ACEA
C1-08
Phosphorus
0.09%
C2-08
C3-08
C4-08
Sulphated
Ash
Sulphur
0.8%
0.4%
Sulphated
Ash
1.0%
Volatility
13%
Sulphur
0.3%
Volatility
13%
Allowable sulphur limit is consumed by additives

Must use mostly Group II or Group III
Confidential
February 2013
Changing OEM performance and viscosity grade

requirements will increase manufacturing complexity
HDMO
Full
SAPS
Visc Grade
Gp I
20W-50
15W-40
10W-40
10W-30
Gp III
5W-30
5W-40
10W-40
PCMO
Gp I/III
Typical EAME Supply

Group I
Group III
Group IV (PAO)
5W-40
5W-30
0W-30/20
Gp III/IV
Confidential
February 2013

HDMO
Full
SAPS
Visc Grade
Gp I
20W-50
15W-40
10W-40
10W-30
Gp III
5W-30
5W-40
10W-40
PCMO
Gp I/III
Gp III/IV
Typical EAME Supply

Group I
Group III
Group IV (PAO)
5W-40
5W-30
0W-30/20
Inadequate properties
to meet Low/Mid SAPS
15W-40 specifications
15W-40
HDMO
Low/
Mid
SAPS
PCMO
10W-40
10W-30
5W-30
5W-40
10W-40
5W-40
5W-30
0W-30/20
X
Confidential
February 2013

HDMO
Full
SAPS
PCMO
Visc Grade
Gp III
Gp
20W-50
XX
15W-40
XX
Gp I/III
Gp
II/III
10W-40
XX
10W-30
XX
Gp III
5W-30
5W-40
10W-40
5W-40
5W-30
0W-30/20
HDMO
Low/
Mid
SAPS
PCMO
With Group II/II+/III

can formulate a full
product line, except
0W-XX
Increased flexibility
for optimising
Low/Mid SAPS
X
Potential lower cost
15W-40
10W-40
10W-30
5W-30
5W-40
10W-40
5W-40
5W-30
0W-30/20
Gp III/IV
Different formulations
in each viscosity
grade will increase
future complexity
X
Confidential
February 2013
Group II Base Oils:

Optimal formulating alternative for Low/Full SAPS HDMO
Reference
Alternative
Low SAPS
10W-30 / 10W-40 / 15W-40
10W-30
10W-30
10W-40
15W-40
III
II+
III
II
II
II+
II
II
Comparable performance
Full SAPS
15W-40
15W-40
SN 500
II
I
220R
SN 150
Higher performance
Confidential
February 2013
Group II Base Oils:

Optimal formulating alternative for Low/Full SAPS PCMO
Reference
Alternative
Low SAPS
5W-30/40
5W-30
5W-40
III
III
Comparable
III
II+
II+
performance
Full SAPS
10W-40
10W-40
Higher
III
III
performance
II
Confidential
February 2013
10
Global Base Oil Capacity

Base Oil Capacity by Quality
Base Oil Capacity By Region

January 2012
kt/y
Group III
8,7%
20.000
Naphthenic
9.8%
GTL
1,4%
15.000
Group II
24,4%
Group I
55,7%
10.000
5.000
ASIA
NORTH
AMERICA
Group I
Europe
Group II
FSU
Group III
MIDDLE
LATIN
EAST & AMERICA
AFRICA
GTL
Naphthenic
Source: PFC Energy
Confidential
February 2013
11
Premium Base Oil Capacity is Growing at a Fast Pace
kMT
1800
1600
1400
1200
Group II
Group III
Group II/III
Chevron
Pascagoula
1000
800
600
400
200
0
2005
2007
2009
2011
2013
2015
2017
Data from LubesNGreases

Confidential
February 2013
12
While Premium Base Oil Capacity is Growing,

Group I Capacity Is Declining
70
% Global Production Capacity

Rate of Increase of Group II
and Group III demand
expected to increase
60
50
2010
2015
Group I plants rationalizing

Significant variations in
regional demand
40
30
20
10
Source: LubesnGreases
0
Group I
Group II Group III Group IV

(PAO)
Confidential
February 2013
13
Automotive Product
Summaries
Confidential
February 2013
14
Industry Leading Product Qualification Portfolio In

Chevron Group II/II+ Base Oils
HDMO
ACEA
API
E7
E4
CI-4/SM
E9
E6
A3/B4
C3
C2
CJ-4/SN
CI-4
Low SAPS
SN
SN
SN
Std SAPS Std SAPS Mid-SAPS

5W-30
5W-40
10W-30
10W-40
15W-30
15W-40
15W-50
PCMO
Std SAPS Mid-SAPS Mid-SAPS
Recognition of Group II benefits by additive companies, continued investment
Extensive portfolio of North American HDMO/PCMO qualifications based on API also

available
Extensions of selected automotive qualifications ongoing
Expanding portfolio of industrial qualifications
Confidential
February 2013
15
Base Stock Properties For Blending Premium Engine

Oils Group II/II+/III Covers All Viscosity Grades
Base Oil Noack Volatility, % Wt Loss
30,0
27,0
100N
24,0
21,0
150N
18,0
15,0
5W-30
12,0
10W-30
10W-40
220N
15W-40
Group I
9,0
6,0
3,0
Group III
PAO
20W-xx
Group II+
0,0
0
1000
2000
3000
4000
Base Oil
CCS (cP at -20C)
Confidential
5000
6000
February 2013
14,000
16
Industrial Product
Summaries
Confidential
February 2013
17
Meeting ISO Viscosity Grades For Industrial

Applications With Hydroprocessed Base Oils
Viscosity Classifications
Base Oil Formulating Range
ISO
ISO
VG
VG
Group I
+ Bright
Stock
Group II
+ Bright Stock
68
Group I
Group II
Confidential
>70% of industrial
Group III applications are
ISO 68 or less
February 2013
18
Hydroprocessed Base Oils can Significantly Improve

Oxidation Characteristics of Turbine Oils
ISO VG 32 Turbine Oil
20000
ASTM D943
TOST (hrs to 2 TAN)
24000
16000
300% longer life

with Group II
12000
8000
4000
0
Group I
With Additive
Confidential
Group II
With Additive
February 2013
19
In Turbine Oils, RPVOT Test Shows

Group II And Group III Enable Strong Performance
Choice of additives strongly affects oxidation stability
2500
Group I
2000
Minutes
Group II
1500
Group III
1000
500
0
B
C
Alternative Additive Packages
Confidential
D
Chevron data
ASTM D2272
February 2013
20
20
Multifunctional Ashless R&O Technology Performance

Comparison of Group I, Group II and Group III Base Oils
RPVOT (ASTM D 2272)
Demulsibility @ 54C (ASTM D1401)
Gp I
Gp II
Gp III
Air release 50C (ASTM D 3427)

5
4
3
2
1
0
Gp I
Gp II
Lifetime, Minutes
10
1500
1000
500
0
Gp I
Gp II
Gp III
TOST, 95C, Oxygen, Fe and Cu

Catalysts (ASTM D 943)
Hours to TAN 2 mg KOH/g
20
Thermo-Oxidative Stability
Minutes
2000
Minutes
Surface Characteristics
30
Gp III
Confidential
Source, King Industries
10000
>10K hours
5000
Gp I
Gp II
February 2013
Gp III
21
Industrial Qualifications Summary
Lz
Hydraulic Oils
Ash Containing
Oronite
Afton
Turbine Oils
R&O oils
RheinChemie
Ashless
RheinChemie
RheinChemie
King Industries
ISO VG 32
ISO VG 46
ISO VG 68
Confidential
February 2013
22
Optimised Group II NGEO Formulations Can Extend

Drain Periods
Comparative Drains in CAT 3516 TALE Engines
3000
2500
Hours
2000
1500
1000
500
0
Industry benchmark (Gp I) Industry benchmark (Gp II)
Additive A in Gp II
Additive B* in Gp II
* Additive B = Oronite OLOA 44506 + Chevron 600R
Confidential
February 2013
23
Optimised Group II NGEO Formulations substantially

reduce combustion chamber deposits
Confidential
February 2013
24
Increasing Global Availability of Chevron Base Oils
Hamburg Hub
220R
600R
?
Antwerp
Hub
Richmond
100R
Pascagoula
220R
600R
150R
110 100R 220R 600R

RLV
USWC Hub
Yeosu (JV)*
110
RLV
110 100R 220R 600R

RLV
USGC Hub
Gp II/II+
Products
HUBS
USWC
60R
USGC
Antwerp
100R
?X
110RLV
Hamburg
Singapore Hub
220R 600R
100R 150RYeosu
Singapore
X
X
150R
220R
?
X
600R
600R
100R 220R 600R
Future
consideration
X hubs
X under X
X
X
*Yeosu is a JV between Chevron and GSH operated by GSC

Confidential
February 2013
.
25
In Summary.
Chevron Group II base oils can help mange complexity

Portfolio of market general qualifications for industrial and automotive
applications continues to expand
Chevron Pascagoula base oil project is progressing on time and on
budget
Global distribution network for Chevron base oils continues to expand
Confidential
February 2013
26
Appendix
Confidential
27
February 2013
Chevron Base Oils Typical Properties
Confidential
February 2013
28

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Chevron Base Oils

2013 Chevron U.S.A. Inc.

Chevron Continues to Invest in the Group II Base Oil

Richmond, USA Expanded Q2 07

Yeosu, S Korea On line Q4 07 (JV with GSH*)

Pascagoula, USA Q4 2013

Preparing market for further premium base oil growth

De bottleneck generating further capacity

Global Market Share, %

Global Base Oil Capacity

Strong commitment for uninterrupted supply globally

Chevron market proposition

Multiple supply sources

Global product slate

Strong portfolio of product qualifications

Proven logistics and security of supply

Growing demand for premium base oils

Group II can be used in vast majority of lubricant applications

2013 Chevron U.S.A. Inc.

Trends in base stock usage are changing

Industry and OEM specifications require the use of higher performing

Blending plant, product development and procurement strategies

2013 Chevron U.S.A. Inc.

European 2011 PCMO and HDMO market

Slowly trending to lighter viscosity

5W-X & below

Performance criteria and viscosity

Industry and OEM specifications

Manufacturing and supply

Low SAPS HDMO And PCMO Specifications Require

Allowable sulphur limit is consumed by additives

Changing OEM performance and viscosity grade

Typical EAME Supply

2013 Chevron U.S.A. Inc.

Changing OEM performance and viscosity grade

Typical EAME Supply

Changing OEM performance and viscosity grade

With Group II/II+/III

Potential lower cost

Group II Base Oils:

Group II Base Oils:

2013 Chevron U.S.A. Inc.

Global Base Oil Capacity

Base Oil Capacity By Region

2013 Chevron U.S.A. Inc.

Premium Base Oil Capacity is Growing at a Fast Pace

Data from LubesNGreases

While Premium Base Oil Capacity is Growing,

% Global Production Capacity

Group I plants rationalizing

2013 Chevron U.S.A. Inc.

Group II Group III Group IV

2013 Chevron U.S.A. Inc.

Industry Leading Product Qualification Portfolio In

Std SAPS Std SAPS Mid-SAPS

Std SAPS Mid-SAPS Mid-SAPS

Recognition of Group II benefits by additive companies, continued investment

Extensive portfolio of North American HDMO/PCMO qualifications based on API also

Extensions of selected automotive qualifications ongoing

Expanding portfolio of industrial qualifications