"We are very proud of the achievements of our employees in the Gulf Region, many of whom have had to overcome personal adversity to help us resume operations," said Dave O'Reilly, chairman and chief executive officer, Chevron Corporation. "We have placed a high priority on safety in all areas of our business following the hurricanes, as well as helping our employees and their communities recover from this catastrophe."
Oil and Gas Production Facilities
Chevron has concluded assessments on the effects of Hurricanes Katrina and Rita on its offshore facilities in the Gulf of Mexico. The company is mobilizing staff to return to facilities that were not damaged in the eastern Gulf and in the deep water. Approximately 20 percent of the company's net production in the Gulf of Mexico has been restored.
A number of production facilities sustained damage and 14 structures were toppled. Many wells from these affected fields will be isolated and production resumed prior to structure replacement. The restart of all facilities depends on the availability of pipelines and onshore terminals, plants, and related infrastructure. The company has begun an investigation to determine why the Typhoon production facility and other structures failed during the storm.
Sabine Pipe Line LLC lifted force majeure on Oct. 4 at several Henry Hub interconnects where metering capabilities have been restored and Sabine is capable of facilitating deliveries not requiring compression. Due to the temporary unavailability of compression at the hub, Sabine is accepting nominations for receipts and deliveries only to the extent that volumes can be received and delivered without the need for compression. The Henry Hub complex has been drained of water, and work continues to restore the facility. Conditions of force majeure remain in effect for all other points until further notice.
With respect to damages from Hurricane Katrina, Chevron Pipe Line Company is continuing to work on its Empire Terminal and pipeline system, which remains without utility service. The company will resume deliveries on a limited basis this week. The Fourchon Terminal has begun receiving production from the Ship Shoal and the Timbalier Bay systems. Tests on remaining incoming pipelines will be done when damage assessments are complete on specific offshore platforms and producers become available. Both terminals are located in Louisiana.
Marketing and Lubricants
Chevron's lubricants production plant in Port Arthur, Texas, incurred limited wind and water damage from Hurricane Rita. Damaged areas were confined to the plant's warehouse and miscellaneous facilities outside the warehouse area. All else, including plant tanks, is intact and undamaged. Currently, operations at the plant are temporarily halted due to a lack of power and limited plant access. However, lubricants supply is being ensured from the Chevron U.S. distribution network. Operations at Port Arthur will resume once damage assessment is concluded and power is restored.
Marketing operations throughout the Gulf Coast region were impacted by both hurricanes. The Orleans and St. Bernard parishes in Louisiana as well as the Beaumont and Port Arthur, Texas, areas suffered the most significant damage with some sites still inoperable. However, approximately 90 percent of the sites in Texas and Louisiana are open and selling fuel. The high rate of site recovery is attributed to the placement of field teams immediately following the hurricanes. These teams coordinated critical fuel deliveries for emergency response teams, provided proprietary truck and driver resources to get sites re-supplied with fuel, and acquired generators for key retail locations to support recovery efforts in the surrounding communities. EPA and state efforts to grant fuel waivers after Hurricane Rita, similar to the approach taken following Hurricane Katrina, have been extremely helpful to make gasoline supplies more fungible in affected areas.
Chevron Oronite Company management is focused on helping employees return safely to work. All employees are safe, and by the end of this week more than 200 employees and family members will be living in the employee temporary onsite housing provided by Oronite. The company's Oak Point manufacturing facility, located at Belle Chase, La., is being prepared for the full resumption of operations. Oronite does expect shipments to be constrained by transportation limitations and shortage of some raw materials as the Texas/Louisiana Gulf Coast faces the challenge of repairing and rebuilding its infrastructure.
The Chevron Humanitarian Relief Fund has accrued over $720,000 in donations. This fund channels money directly to Chevron employees affected by both Hurricanes Katrina and Rita and is in addition to the $5 million corporate commitment to post Hurricane Katrina relief efforts ($3 million to the American Red Cross and $2 million to agencies providing community relief along the Gulf Coast). Chevron will continue to match employee contributions made to the Humanitarian Relief Fund on a one-to-one basis through Nov. 30, 2005, with no cap on the matching funds the company will provide.
The company's recent support to agencies from the community relief fund includes:
-- $250,000 contribution to the Project Rebuild Plaquemines Parish to provide rebuilding assistance including stocking homes with necessities for living.
-- $250,000 contribution to Jackson County Day Care Centers to assist with restoration of hurricane-damaged licensed childcare facilities.
-- $100,000 to support Kid's Clinics in New Orleans which are affiliated with the Children's Hospital.
-- Chevron purchased a van for the Mississippi Blood Services to use for emergency response, including transporting equipment, personnel and blood products throughout New Orleans and statewide.
In addition, Chevron has assisted local agencies through in-kind donations including:
-- Provision of school supplies including over 3,700 children's books to Houston-area schools.
-- Donation of 400 gas cards valued at $20,000 to teachers in the Houston area.
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