Developing Energy for the Future Chevron Indonesia Company Chevron Makassar Ltd.
The demand for energy is growing The demand for energy is growing. The world is undergoing an economic expansion that is raising the standard of living for millions of people everywhere, but energy is the foundation for this expansion. It is projected that the demand for energy will rise by about 33 percent by 2030, a growing demand fuelled by a burgeoning population, growing some 20 percent over the next 20 years, with most of that growth in countries with emerging economies, especially in the Asia Pacific region. At Chevron, we recognize the world needs all forms of energy – from conventional crude oil and natural gas to the emerging sources of the future. Chevron is actively investing in alternative and renewable energy technologies to help expand and diversify the world’s energy supply.
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It is projected that the demand for energy will rise by about
33 % by 2030 a growing demand fuelled by a burgeoning population growing some
20 % over the next
20 years
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Human Energy is Rising to the Challenge Headquartered in San Ramon, California, Chevron is one of the world's leading integrated energy companies with subsidiaries that conduct business across the globe. Our success is driven by the ingenuity and commitment of our employees and by their application of the most innovative technologies in the world. We are involved in virtually every facet of the energy industry, exploring for, producing and transporting crude oil and natural gas, refining, marketing and distributing transportation fuels and other energy products, manufacturing and selling petrochemical products, generating power and producing geothermal energy, providing energy-sufficiency solutions, and developing the energy resources of the future, including biofuels.
In carrying out our business, we are guided by The Chevron Way. Our vision is to be the global energy company most admired for its people, partnership and performance. Our Company’s foundation is built on our values, which distinguish us and guide our actions. We conduct our business in a socially responsible and ethical manner. We respect the law, support universal human rights, protect the environment and benefit the communities where we work. Chevron is built on the idea that with commitment and ingenuity there is no problem that cannot be solved, no challenge that cannot be overcome. This is how the people of Chevron approach their jobs every day. The world needs energy to power businesses, heat homes, light schools, transport people, deliver products, create jobs and improve the overall quality of life. Energy moves the world forward. Human Energy makes it possible.
Our vision is to be the global energy company most admired for its people, partnership and performance 4
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CHEVRON KALINGA, Ltd. Kalinga
PHILIPPINE GEOTHERMAL PRODUCTION COMPANY, INC. (MAK-BAN) Laguna-Batangas
Geothermal
Geothermal
MANILA
PHILIPPINE GEOTHERMAL PRODUCTION COMPANY, INC. (TIWI) Albay CHEVRON MALAMPAYA LLC
Geothermal
Gas Exploration and Production
SOUTH NATUNA SEA BLOCK B Riau Islands Oil & Gas Exploration and Production
THE PHILIPPINES
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CHEVRON INDONESIA COMPANY & CHEVRON MAKASSAR, Ltd. East Kalimantan Oil & Gas Exploration and Production
PT. CHEVRON PACIFIC INDONESIA Riau Oil & Gas Exploration and Production
INDONESIA PT. CHEVRON GEOTHERMAL SUOH - SEKINCAU Lampung Geothermal
JAKARTA
CHEVRON GEOTHERMAL INDONESIA, Ltd. West Java Geothermal
CHEVRON WEST PAPUA I, Ltd. & CHEVRON WEST PAPUA III, Ltd. West Papua Oil & Gas Exploration
CHEVRON GEOTHERMAL SALAK, Ltd. West Java Geothermal
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Chevron IndoAsia Business Unit Through Chevron Asia Pacific Exploration & Production, Chevron conducts operations in Indonesia and the Philippines under its IndoAsia Business Unit. In Indonesia, Chevron is a major producer of oil and gas through subsidiaries PT. Chevron Pacific Indonesia (CPI), Chevron Indonesia Company (CICo) and Chevron Makassar, Ltd. (CML). In the Philippines, Chevron participates in the country’s largest gasto-power development, working through Chevron Malampaya LLC. Chevron’s geothermal activities are carried out through Chevron Geothermal Indonesia, Ltd. (CGI), Chevron Geothermal Salak, Ltd. (CGS) in Indonesia, and Philippine Geothermal Production
Company, Inc. (PGPC) in the Philippines. We have added new projects to our portfolio: two oil & gas exploration blocks, West Papua I and West Papua III in West Papua Province, and two geothermal prospects, Kalinga in the Philippines and SuohSekincau in Lampung Province. Our operations in both countries are supported by over 6,400 highly-skilled, dedicated employees and more than 30,000 business partner-employees. Currently over 97 percent of IBU employees are Indonesian and Filipino nationals.
6,400 >30,000 97% highly-skilled, dedicated employees
business partneremployees
Indonesian and Filipino nationals
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Delivering Energy for the Future Chevron’s first major step in Indonesia energy exploration and production was taken in 1924, when Standard Oil Company of California (Socal), now Chevron, dispatched a geological expedition to the island of Sumatra. For more than half a century, Chevron has been Indonesia’s largest producer of crude oil. From our onshore oil fields in Sumatra and our offshore fields in East Kalimantan, we have produced more than 12 billion barrels of oil to meet the energy needs of Indonesia’s growing economy. In our Sumatra operations, we operate one of the world’s largest steam-flood operations, the Duri Steam Flood (DSF), and extensive water-flood operations at the Minas field, as well as manage Dumai tank farm which has a storage capacity of 5.1 million barrels and Dumai Wharf. For more than 30 years, Chevron has been helping countries harness their geothermal resources to meet sustainable development objectives. Chevron has been a leader in geothermal development, developing one quarter of the world’s capacity. Today, our geothermal operations in Indonesia and the Philippines make us the largest geothermal energy producer in the world. Overall, our geothermal operations in both countries supply 924 megawatts of operating capacity, enough clean and sustainable energy to meet the needs of 12 million people. Our 110-megawatt Darajat Unit III geothermal power plant in West Java, reached an important milestone in 2009 by earning Chevron’s first Clean Development Mechanism Certified Emission Reduction from the United Nations.
12 billion >30 years barrels of oil to meet the energy needs of Indonesia’s growing economy
Chevron has been helping countries harness their geothermal resources to meet sustainable development objectives
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Meeting Energy Needs to Fuel Indonesia’s Growing Economy
Chevron Indonesia Company (CICo) and Chevron Makassar Ltd., Chevron subsidiaries, have been producing energy for Indonesia for more than four decades, under a production sharing contract with the Government of Indonesia, today represented by
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SKK Migas (Special Task Force for Upstream Oil and Gas Business Activities). From our offshore fields in Makassar Strait, East Kalimantan, we have produced more than one billion barrels of accumulative oil.
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Developing Resources in Kutei Basin Chevron Indonesia Company (CICo)’s legacy started in 1968, when the Company signed its first Production Sharing Contract (PSC) for an offshore block located northwest of Sumatra. However, it was its second PSC, signed the same year, which established the Company. This PSC is located in East Kalimantan and covers both onshore and offshore concession areas. In 1970, the Company discovered Indonesia’s largest offshore oil and gas field, the Attaka Field, located in the Makassar Strait. Between 1973 and 1995, CICo also discovered the Sepinggan, Yakin, Melahin, Kerindingan and Santan fields, all located off coast of East Kalimantan. In 1996, the Company commenced exploration in its deepwater development project in Makassar Strait, with the discovery of the West Seno Field. Our operations in East Kalimantan consist of three main areas: the North Area, South Area and West Seno. In the North Area, we operate the Attaka, Melahin, Kerindingan, Serang and Sapi fields, as well as the Santan Terminal. Attaka Field, starting production in 1972, earned world recognition as the largest offshore oil field in Indonesia. Crude oil and natural gas produced from the North Area are processed at the Santan Terminal, with the natural gas also being
transported Bontang LNG Plant. In the South Area, we run the Sepinggan and Yakin fields, the Lawelawe Terminal, Penajam Supply Base and Pasir Ridge Balikpapan Office. Crude oil and natural gas from the South Area are processed at the Lawe-lawe Terminal. The discovery of the West Seno Field marked a new phase in the energy development project in Indonesia: the oil and gas deepwater development. The West Seno Field lies in Makassar Strait PSC, with a water depth varying between 800 meters (2,400 feet) to 1,100 meters (3,400 feet). Chevron is now developing the first ultra-deepwater natural gas development in Indonesia, known as the Indonesia Deepwater Development (IDD) project, which covers several fields. The first five of these fields to be developed are the Gendalo, Maha, Gandang (known as Gendalo project), Gehem and Bangka. These fields are located across four different PSC areas, namely, Makassar Strait, Ganal, Rapak, and Muara Bakau in Makassar Strait, at depths varying from 900 meters (2,700 feet) to 2,000 meters (6,600 feet). Gas from the IDD project will be sold domestically, and partly converted to liquefied natural gas (LNG) at the Bontang LNG facility for export.
Chevron is now developing the first ultra-deepwater natural gas development in Indonesia, known as the
Indonesia Deepwater Development (IDD) project
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Advanced Technology to Deliver World-Class Performance Protecting people and the environment while conducting our operations reliability and efficiently are integral parts of the Chevron Way. We place the highest priority on the health and safety of our workforce, along with protection of the environment and our assets. We steadily endeavor to maintain our reputation for world-class performance, through disciplined application of the Operational Excellence Management System (OEMS). Our actions are guided by the following two tenets: “Do it safely or not at all” and “There is always time to do it right”. Technology plays a pivotal role in advancing all aspects of our business. It enables us to find new resources, overcome geological challenges and achieve the best and most cost-effective results. Steam-flooding and water injection are a few of advanced technologies developed and transferred to Indonesia (applied in our Sumatra operations) by Chevron. A deepwater project often requires expensive, floating production facilities, attached to the sea floor with cables or other flexible systems. The wells
extend to the sea floor and then penetrate thousands of feet into the earth, to tap oil and gas and bring it to the surface. The technical challenges in deepwater project include subsea reservoir development and performance, hydrates, equipment performance, operations at high pressures and challenging temperatures, subsea design and massive, complex construction. Chevron is a world leader in deepwater developments. We have safely, cost-effectively and in a timely manner delivered numerous deepwater developments around the world, including ones in the Gulf of Mexico, offshore Nigeria, offshore Angola, and offshore Brazil. The lessons learned and expertise gained from these developments will be incorporated into our first ultra deepwater projects in Indonesia. As part of our Environmental Stewardship, we implement a flaring/venting reduction program at the Yakin and Sepinggan fields. This program has successfully reduced greenhouse gas emissions by operating vapor recovery and gas compressors, so that recovered associated gas can be utilized as a source of fuel at these offshore fields or being packaged for sale.
“Do it safely or not at all” “There is always time to do it right”
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Creating a World-Class High-Performing Diverse Global Workforce One of our enterprise strategies is to invest in people. We believe that by investing in our employees we are strengthening our organizational capability, while at the same time we are developing a talented global workforce that can achieve results the right way. We have established a number of people development and training programs to ensure that our employees have all the resources to enrich their career objectives while continuously building our organizational capability. Our programs include: • Petrotech competency development, namely, the Horizons and Pathways programs • Career Development Assignments (CDA) • International Assignments • Employee Self Development Program (ESDP) • University Partnership Program (UPP)
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Horizons The Horizons Program is one of our main competency-based employee development efforts. The goal is to accelerate employee development with respect to their technical knowledge and work-based behavior. The Horizons Program has three key elements: training, assignments and mentoring. All new Chevron graduate hires with less than five years’ experience are enrolled into this program: Drilling & Completions, Earth Science, Facilities Engineering, Health, Environment and Safety, Information Technology, Petroleum Engineering and Supply Chain Management. This program has been run since 2007 and has graduated more than 180 national employees.
Career Development Assignments Career Development Assignment (CDA) is a development program intended to impart opportunities to develop and to retain the “best people” with proper knowledge and skills, in alignment with organizational business needs. By attending CDA, the employee is expected not only to obtain
knowledge, skills, and experience while enhancing professionalism and the transfer of technology, but also to be exposed to a global working environment in a multicultural atmosphere and to build a network with other high-calibre professionals. Since 2000, more than 200 national employees have joined this program, most of whom have proven themselves subsequently by playing important roles in achieving Chevron’s business objectives in Indonesia.
Employee Self Development Program (ESDP) Chevron provides educational support under its Employee Self Development Program (ESDP) for eligible employees to upgrade their qualifications by taking higher education at their own pace, in order to help enhance our organizational capability while meeting employee career growth aspirations.
International Assignments We continuously strive to ensure that employees are positioned to achieve their goals and to grow with their careers through Chevron-sponsored international development programs, many of which are held in the United States. Well over 1,000 Indonesian employees have completed international development assignments. At the same time, Chevron’s worldwide operations provide many opportunities for employees to gain experience outside their home countries. There are over 60 Indonesian employees on
Chevron has welcomed
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the prestigious Chevron global workforce assignments in the Americas, in Europe and around Africa.
UPP intern students, of whom 52 have become permanent employees
University Partnership Program (UPP) – Internship Program To develop university students’ competency, Chevron has a University Partnership Program (UPP) – Internship Program to give students a 3-month apprenticeship in Chevron. Through this program, students have the opportunity to apply their knowledge, learn new skills, and build networking relationships. Chevron has welcomed 167 students into the program since it started in 2008, of whom 52 have become permanent Chevron employees.
Well over
1,000
Indonesian employees have completed international development assignments 17
Developing Partnerships, Empowering Communities Chevron does more than provide energy. We believe that by investing in people we all benefit. Our programs engage communities and individuals, empowering them to promote sustainability and to help deliver long-term socioeconomic benefits. These programs target the communities in which we operate and demonstrate our commitment to being the partner of choice. Chevron’s programs are anchored in partnership with governments, communities, local & international nongovernmental organizations and development agencies. Most programs invest in our three primary focus areas – improving access to basic human needs (such as healthcare, better nutrition, improved sanitation and agricultural, and public infrastructure development), enabling education and training opportunities, and promoting sustainable livelihoods. We also support arts and culture as well as disaster relief and long-term rehabilitation efforts. Each of these elements helps contribute to socio-economic progress.
Improving Access to Basic Human Needs Health care, nutrition, clean water, sanitation, agriculture and public infrastructure provide a foundation for economic development activities. We implement a number of programs to promote access to basic human needs, including our partnership with the Global Fund to fight AIDS, Tuberculosis and Malaria, in which we are the first Corporate Champion. Our $30 million commitment funds programs to fight these diseases in six countries, including Indonesia and the Philippines, as well as Thailand, Nigeria, South Africa and Angola. In October 2010, the Company announced that it will commit another $25 million, raising its 6-year investment in the organization to $55 million. Chevron is now the single largest private sector donor to the organization.
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In Indonesia, Chevron is working to combat HIV/ AIDS, as part of a comprehensive program that includes education and information initiatives, and specially designed local programs. We support comprehensive awareness, prevention, voluntary testing and counseling services, treatment and an anti-discrimination approach for all our employees and their family members. We also actively collaborate with local and national governments, as well as non-governmental organizations, to organize and participate in HIV/AIDS prevention and awareness campaigns for surrounding communities throughout our operations in Riau, East Kalimantan, West Java and Jakarta.
In 2007, we became founding members of the Indonesian Business Coalition on AIDS (IBCA). We believe that the business community plays a vital role, working together to adopt best practices to prevent the spread of HIV/AIDS, starting from our own workplace. Initiative Engage Execute Empower We sponsor a series of programs called Initiative Engage Execute Empower (I3E), where we offer our assistance for women’s and youth issues in health, education, and economic development. In Penajam Paser Utara Regency, we work together with our partners to sustainably improve the health of pregnant women, postpartum women and their infants, by
enhancing community capacity, access to and demand for quality maternal and newborn health services. We also help them prepare for childbirth and obstetrics and potential complications of newborns using the already tested community engagement approach, the Desa SIAGA. Desa SIAGA, meaning “Alert Village”, stands for SIap (ready), Antar (take, transport), jaGA (stand by or guard). The SIAGA, or“alert”, initiative advocates everyone should play a part in helping to save women’s lives.
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Enabling Education and Training Our investments in education and training contribute to local development and build constructive relationships that improve our ability to conduct business. Education and capacitybuilding training have been a focus for Chevron in Indonesia. Chevron’s School Infrastructure Construction and Renovation Program helps improve school facilities in remote areas located near our operations areas. Undertaken in collaboration with local governments and school committees, the program helps to provide: funding to construct classrooms, to improve access to schools, to renovate school facilities, to provide equipment (including laboratory equipment, library books and furniture). Further, it facilitates the donation of used personal computers to selected schools. Recently, we rehabilitated classrooms for junior high schools and senior high schools in Marangkayu District. Vocational Training Vocational Training for Youth and Drop-Out Students In our operational areas in East Kalimantan, namely in Balikpapan, Penajam Paser Utara, Marangkayu and Lawe-lawe, we have established vocational training programs for youths and
school dropouts, operated in collaboration with local governments, non-governmental organizations, youth organizations, universities, and vocational schools. This program is intended to diversify the economy of local communities and increase employment opportunities by improving the skills of young people. The training courses vary from year to year but generally include welding, automotive, heavy-equipment operation, carpentry, rigger work, electrical work, motorcycle maintenance, audio repair and air-conditioner service. Newspapers in Education: Training Teachers and Students Chevron is partnering with several organizations, including The Jakarta Post and the Newspaper in Education Institute, in a unique program to teach English. The program is based on the idea that using the newspaper as a living textbook can make teaching and learning English enjoyable, interactive and relevant. Chevron supports the program by organizing training in communities near our operations. More than 17,000 students and 1,000 teachers from nine provinces across Indonesia have benefited from the training since our participation began in 2008.
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Establishing Sustainable Livelihoods through Micro and Small Enterprises Chevron is committed to improving social and economic conditions wherever we operate, and our focus on sustainable livelihoods and sustainable employment opportunities promotes self-sufficiency. With our partners, we identify programs to promote a better standard of living, create a more stable operating environment, and improve relationships.
Supporting Local Business Chevron supports programs that offer training in agriculture, fisheries and small business development. The Local Business Development (LBD) program, first launched in 2001, helps small companies and cooperatives in Riau, East Kalimantan and West Java. The scheme is intended to develop small local companies and cooperatives located in our operational areas, that they might evolve into reliable, professional and competitive suppliers of goods and services, while at the same time boost the economy at the local level. Over the past six years, more than 4,000 contracts have been awarded and approximately 5,500 vendors have been trained. Through LBD workshops, budding entrepreneurs are provided with training in Health, Environment, and Safety , procurement procedures, business ethics, project management, technical aspects and financial management to develop the capacity of LBD partners. In 2008, our LBD program was recognized by the Ministry of Energy and Mineral Resources with the bestowing of the Padma Award for Social Solidarity.
Improving the Standard of Life In eleven coastal villages in Penajam Paser Utara and Kutai Kartanegara regencies, Chevron established the Community Coastal Empowerment Program. The program objectives are to improve community income and livelihood, to support sustainable economic development by strengthening economic institutions and optimizing the use of marine and coastal resources, also to empower the economic capability
of coastal communities by providing assistance for the development of marine fisheries and small-scale businesses. Protecting the Environment In Balikpapan, East Kalimantan, Chevron pioneered a Domestic Waste Management program that has helped create healthier living conditions for 450 beneficiary households. The program, which is based on community participatory model, applies the “4R” concept, namely reduce, reuse, recycle and replant. The program has since been expanded to provide broader coverage and engaged a multitude of stakeholders to build a composting house in 2006. Today the composting house can produce 2.5 tons of compost fertilizer monthly, which brings economic benefit by generating additional income for women in seven neighbourhoods. Responding to the success of this initiative, the Government of Balikpapan Municipality adopted the “4R” concept and has replicated this program in 27 other sub-districts within Balikpapan city. The coral reefs of Makassar Strait represent a biologically rich ecosystem that supports a diverse community of turtles, manta rays, dolphins and many other marine species. However, destructive fishing practices, such as blast fishing and the use of poisons, threaten to severely damage the reefs. Chevron supported efforts by The Nature Conservancy, a non-profit organization dedicated to conserving and protecting the world’s flora and fauna, to modify people’s interaction with the environment in Indonesia’s coastal communities and to preserve the biodiversity and productivity of the ecosystem for future generations.
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Rehabilitating Livelihood in Disaster-stricken Areas Chevron has supported response, relief and recovery efforts after natural disasters in Indonesia. These are some examples of how our local partnerships have helped to restore access to healthcare and basic human needs, as well as implementing efforts for lasting recovery. Shaping the Future of Development in Aceh In response to the earthquake and tsunami disasters that affected the northern part of Sumatra in 2004, Chevron’s immediate response was to provide assistance including food, clothing, potable water and employeeraised cash ($2 million in total). In addition to the immediate response assistance, in partnership with the Government of Aceh, and various partners, Chevron also provided longer-term support through the Chevron Aceh Recovery Initiative (CARI). The company’s approach focused on developing public-private partnerships to deliver economic growth and capacity-building programs through education, vocational training, micro-enterprise and small business development. Seven districts and three cities in Aceh Province and the Nias Islands benefited from Chevron’s assistance, and more than 100,000 people in Aceh have been helped by the Company’s efforts to date. Education and training are central to building capacity and sustaining long-term economic development in tsunami-affected areas. Chevron and its partners have invested in a number of focused education and vocational training projects, to address both immediate and longer term needs, including the foundation of the Politeknik Aceh. A joint initiative of Chevron, the United States Agency for International Development (USAID), and the AcehNias Reconstruction and Rehabilitation Agency (BRR), Politeknik Aceh opened its doors to students for the first time in 2008. The 9,000 square meters, 450-student facility was officially opened on February 23, 2009, by Indonesian President Susilo Bambang Yudhoyono. Politeknik Aceh offers degrees in Engineering, Telecommunications and Computer Science. Chevron has spent approximately $6 million on the polytechnic, fully funding the construction of the facility. We contributed a total of $14.7 million for disaster recovery, 24
which included the funding for the polytechnic and roughly $9 million to support long-term economic development and sustainable-growth initiatives. In addition, we were able to use contributions to secure $15 million in partner funding. For instance, we partnered with the Indonesian Red Cross to provide organizational and human-capacity building for medical staff, with JHPIEGO to provide midwifery training in a cluster of villages in Aceh Besar, and with the Indonesia Heritage Foundation to provide teacher training and to open 30 new pre-schools in Aceh. Chevron Earthquake Recovery Initiative We also provided immediate and recovery efforts in the aftermath of the natural disasters in Yogyakarta, West Sumatra and West Java. In response to the Yogyakarta quake in 2006, we helped rebuild the state-run Kalongan Elementary School in Sleman, Yogyakarta and provided technical assistance to Bero Elementary School No. 1 in Klaten, Central Java, during its reconstruction. We provided support to the victims of the earthquake in West Sumatra that struck in 2008. Chevron, its employees and their families helped reconstruct the Aie Angek State Elementary School No. 6 in Tanah Datar Regency. Then in 2009, many parts of West Sumatra, including the Province’s capital Padang, and West Java were affected by another devastating earthquake. Using the experience from Aceh and Yogyakarta, we launched our Chevron Earthquake Recovery Initiative (CERI), which, in addition to providing emergency relief, focused on recovery and reconstruction in the education sector. Two schools were selected for assistance, the Padang No. 5 State Technical Vocational School (SMK Negeri 5 Padang) and the Nan Sabaris No. 21 State Elementary School (SDN 21 Nan Sabaris) in West Sumatra. Meanwhile, in response to the West Java earthquake, Chevron helped rebuild state-run Cipanas Elementary in Sukabumi and Garut No. 23 State High School (SMAN 23) in Pakenjeng. As a result of our immediate response, students were able to move back into their classrooms and out of the emergency tents they had been using as temporary classrooms.
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Striving to be the Partner of Choice Our dedication to collaboration and innovation supports our commitment to being the partner of choice. As a result, our companies are regularly honored for the quality of their operations in Indonesia. For the past several years, we have received recognition and awards from the
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Government of Indonesia as well as from national professional associations in various areas, such as employee career development, HIV-AIDS prevention, health and occupational safety, environmental protection and for being the nation’s best and mostadmired company.
Heading into the Future For 90 years, Chevron has been a proud member of Indonesian society. We have been and will continue to deliver energy for the country’s growing economy and continue supporting the livelihood of Indonesian people.
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Chevron Indonesia Company Chevron Makassar Ltd. Sentral Senayan I Office Tower Jl. Asia Afrika No. 8 Jakarta 10270, Indonesia Balikpapan OfďŹ ce Pasir Ridge, PO box 276 Balikpapan 76102 - Indonesia