Note 12

Investments and Advances

Equity in earnings, together with investments in and advances to companies accounted for using the equity method and other investments accounted for at or below cost, is shown in the following table. For certain equity affiliates, Chevron pays its share of some income taxes directly. For such affiliates, the equity in earnings does not include these taxes, which are reported on the Consolidated Statement of Income as “Income tax expense.”


	Investments and Advances				Equity in Earnings
	At December 31				Year ended December 31
	2011		2010		2011			2010			2009

Upstream
Tengizchevroil	$	5,306	$	5,789	$	5,097		$	3,398		$	2,216
Petropiar		909		973		116			262			122
Caspian Pipeline Consortium		1,094		974		122			124			105
Petroboscan		1,032		937		247			222			171
Angola LNG Limited		2,921		2,481		(42	)		(21	)		(12	)
Other		2,420		1,922		166			319			287

Total Upstream		13,682		13,076		5,706			4,304			2,889

Downstream
GS Caltex Corporation		2,572		2,496		248			158			(191	)
Chevron Phillips Chemical Company LLC		2,909		2,419		985			704			328
Star Petroleum Refining Company Ltd.		1,022		947		75			122			(4	)
Caltex Australia Ltd.		819		767		117			101			11
Colonial Pipeline Company		–		–		–			43			51
Other		630		602		183			151			149

Total Downstream		7,952		7,231		1,608			1,279			344

All Other
Other		516		509		49			54			83

Total equity method	$	22,150	$	20,816	$	7,363		$	5,637		$	3,316
Other at or below cost		718		704

Total investments and advances	$	22,868	$	21,520

Total United States	$	4,847	$	3,769	$	1,119		$	846		$	511
Total International	$	18,021	$	17,751	$	6,244		$	4,791		$	2,805

Descriptions of major affiliates, including significant differences between the company’s carrying value of its investments and its underlying equity in the net assets of the affiliates, are as follows:

Tengizchevroil Chevron has a 50 percent equity ownership interest in Tengizchevroil (TCO), a joint venture formed in 1993 to develop the Tengiz and Korolev crude oil fields in Kazakhstan over a 40-year period. At December 31, 2011, the company’s carrying value of its investment in TCO was about $180 higher than the amount of underlying equity in TCO’s net assets. This difference results from Chevron acquiring a portion of its interest in TCO at a value greater than the underlying book value for that portion of TCO’s net assets. See Note 7, on page FS-33, for summarized financial information for 100 percent of TCO.

Petropiar Chevron has a 30 percent interest in Petropiar, a joint stock company formed in 2008 to operate the Hamaca heavy-oil production and upgrading project. The project, located in Venezuela’s Orinoco Belt, has a 25-year contract term. Prior to the formation of Petropiar, Chevron had a 30 percent interest in the Hamaca project. At December 31, 2011, the company’s carrying value of its investment in Petropiar was approximately $180 less than the amount of underlying equity in Petropiar’s net assets. The difference represents the excess of Chevron’s underlying equity in Petropiar’s net assets over the net book value of the assets contributed to the venture.

Caspian Pipeline Consortium Chevron has a 15 percent interest in the Caspian Pipeline Consortium, a variable interest entity, which provides the critical export route for crude oil from both TCO and Karachaganak. The company joined the consortium in 1997 and has investments and advances totaling $1,094 which includes long-term loans of $l,111 at year-end 2011. The loans were provided to fund 30 percent of the initial pipeline construction. The company is not the primary beneficiary of the consortium because it does not direct activities of the consortium and only receives its proportionate share of the financial returns.

Petroboscan Chevron has a 39 percent interest in Petroboscan, a joint stock company formed in 2006 to operate the Boscan Field in Venezuela until 2026. Chevron previously operated the field under an operating service agreement. At December 31, 2011, the company’s carrying value of its investment in Petroboscan was approximately $220 higher than the amount of underlying equity in Petroboscan’s net assets. The difference reflects the excess of the net book value of the assets contributed by Chevron over its underlying equity in Petroboscan’s net assets.

Angola LNG Ltd. Chevron has a 36 percent interest in Angola LNG Ltd., which will process and liquefy natural gas produced in Angola for delivery to international markets.

GS Caltex Corporation Chevron owns 50 percent of GS Caltex Corporation, a joint venture with GS Holdings. The joint venture imports, refines and markets petroleum products and petrochemicals, predominantly in South Korea.

Chevron Phillips Chemical Company LLC Chevron owns 50 percent of Chevron Phillips Chemical Company LLC. The other half is owned by ConocoPhillips Corporation.

Star Petroleum Refining Company Ltd. Chevron has a 64 percent equity ownership interest in Star Petroleum Refining Company Ltd. (SPRC), which owns the Star Refinery in Thailand. PTT Public Company Limited owns the remaining 36 percent of SPRC.

Caltex Australia Ltd. Chevron has a 50 percent equity ownership interest in Caltex Australia Ltd. (CAL). The remaining 50 percent of CAL is publicly owned. At December 31, 2011, the fair value of Chevron’s share of CAL common stock was approximately $1,600.

Other Information “Sales and other operating revenues” on the Consolidated Statement of Income includes $20,164, $13,672 and $10,391 with affiliated companies for 2011, 2010 and 2009, respectively. “Purchased crude oil and products” includes $7,489, $5,559 and $4,631 with affiliated companies for 2011, 2010 and 2009, respectively.

“Accounts and notes receivable” on the Consolidated Balance Sheet includes $1,968 and $1,718 due from affiliated companies at December 31, 2011 and 2010, respectively. “Accounts payable” includes $519 and $377 due to affiliated companies at December 31, 2011 and 2010, respectively.

The following table provides summarized financial information on a 100 percent basis for all equity affiliates as well as Chevron’s total share, which includes Chevron loans to affiliates of $957, $1,543 and $2,422 at December 31, 2011, 2010 and 2009, respectively.


	Affiliates						Chevron Share
Year ended December 31	2011		2010		2009		2011		2010		2009

Total revenues	$	140,107	$	107,505	$	81,995	$	68,632	$	52,088	$	39,280
Income before income tax expense		23,054		18,468		11,083		10,555		7,966		4,511
Net income attributable to affiliates		16,663		12,831		8,261		7,413		5,683		3,285

At December 31

Current assets	$	35,573	$	30,335	$	27,111	$	14,695	$	12,845	$	11,009

Noncurrent assets		61,855		57,491		55,363		22,422		21,401		21,361
Current liabilities		24,671		20,428		17,450		11,040		9,363		7,833

Noncurrent liabilities		19,267		19,749		21,531		4,491		4,459		5,106

Total affiliates’ net equity	$	53,490	$	47,649	$	43,493	$	21,586	$	20,424	$	19,431