Chevron Corporation

Capital structure and performance · Financial reporting and accounting risks

Changes in management's estimates and assumptions may have a material impact on the company's consolidated financial statements and financial or operational performance in any given period. Areas requiring significant estimates and assumptions by management include impairments to property, plant and equipment and investments in affiliates; estimates of crude oil and natural gas recoverable reserves; accruals for estimated liabilities, including litigation reserves; estimates for decommissioning obligations.

Market and investment · Asset valuation and impairment

Upstream assets may also become impaired. Some jurisdictions are in various stages of design, adoption, and implementation of policies and programs that cap emissions and/or require short-, medium-, and long-term GHG reductions by operators at the asset or facility level, which may not be technologically feasible, or which could require significant capital expenditure, increase costs of or limit production, result in impairment of assets.

Geopolitical and trade · Political instability and government changes

The company's operations, particularly exploration and production, can be affected by changing political, regulatory and economic environments in the various countries in which it operates. Actions could be taken by governments to increase public ownership of the company's partially or wholly owned businesses, to force contract renegotiations, or to impose additional taxes, tariffs, royalties, fees, penalties or other costs.

Social and demographic · Stakeholder activism and pressure

Some stakeholders, including but not limited to sovereign wealth, pension, and endowment funds, have been divesting and promoting divestment of, or screening out, fossil fuel equities and urging lenders to limit funding to companies engaged in the extraction of fossil fuel reserves. These circumstances, among others, may result in pressure from activists on production; unfavorable reputational impacts, including inaccurate perceptions or a misrepresentation of our actual ESG policies, practices and performance; diversion of management's attention and resources; and proxy fights, among other material adverse impacts on our businesses.

Natural and catastrophic events · Financial exposure to weather related losses

The company does not have commercial insurance or third-party indemnities to fully cover all operational risks or potential liability in the event of a significant incident or series of incidents causing catastrophic loss. As a result, the company is, to a substantial extent, self-insured for such events.

Natural and catastrophic events · Natural disasters and extreme weather

The company's operations could be disrupted by natural or human causes beyond its control, including risks from hurricanes, severe storms, floods, heat waves, and other forms of severe weather; wildfires; ambient temperature increases; sea level rise; war or other military conflicts.

Natural and catastrophic events · Pandemic and public health crises

The company's operations could be disrupted by natural or human causes beyond its control, including epidemic or pandemic diseases, some of which may be impacted by climate change and any of which could result in suspension of operations or harm to people or the natural environment.

Natural and catastrophic events · Climate change and environmental impact

GHG emissions-related legislation, regulations, and other government actions, and shifting customer and consumer preferences and other private efforts aimed at reducing GHG emissions may result in increased and substantial capital, compliance, operating, and maintenance costs and could reduce demand for hydrocarbons and the company's hydrocarbon-based products; increase demand for lower carbon products and alternative energy sources; make the company's products more expensive; adversely affect the economic feasibility of the company's resources.

Core operations · Operational disruption and business continuity

The company's operations could be disrupted by natural or human causes beyond its control, including risks from hurricanes, severe storms, floods, heat waves, and other forms of severe weather; wildfires; ambient temperature increases; sea level rise; war or other military conflicts such as the conflict between Russia and Ukraine and in the Middle East; accidents; civil unrest; political events such as current geopolitical tensions in Venezuela; fires; earthquakes; system failures; cyber threats; terrorist acts; and epidemic or pandemic diseases.

Core operations · Safety incidents and operational accidents

Chevron's results depend on its ability to identify and mitigate the risks and hazards inherent to operating in the energy industry. Failure to manage these risks effectively could impair our ability to operate and result in unexpected incidents, including releases, explosions or mechanical failures resulting in personal injury, loss of life, environmental damage, loss of revenues, legal liability and/or disruption to operations.

Supply chain and procurement · Supplier operation and dependance

Extended periods of low commodity prices can have a material adverse impact on the results of operations, financial condition and liquidity of the company's suppliers, vendors, partners and equity affiliates upon which the company's own results of operations and financial condition depend.

Legal and litigation · Litigation and legal proceedings

Chevron's business subjects the company to liability risks from litigation or government action. The company produces, transports, refines and markets potentially hazardous materials, and it purchases, handles and disposes of other potentially hazardous materials in the course of its business. Any of these activities could result in liability or significant delays in operations arising from private litigation or government action.

Industry regulation · Regulatory compliance and changes

Legislation, regulation, and other government actions and shifting customer and consumer preferences and other private efforts related to greenhouse gas (GHG) emissions and climate change could continue to increase Chevron's operational costs and reduce demand for Chevron's hydrocarbon and other products. International agreements and national, regional, and state legislation and regulatory measures that aim to directly or indirectly limit or reduce GHG emissions are in various stages of implementation.

Strategic execution · Merger acquisition and divestiture risks

The success of the acquisition of Hess, which closed in July 2025, will depend, in part, on Chevron's ability to realize the anticipated benefits, including the anticipated run-rate cost synergies, estimated five-year production and free cash flow growth rates, and anticipated higher returns to shareholders over the long-term. Failure to realize anticipated synergies in the expected timeframe, operational challenges, the diversion of management's attention from ongoing business concerns, and unforeseen expenses associated with the acquisition may have an adverse impact on our financial results.

Innovation and product development · Product development and randd investment risks

The scope of Chevron's business will decline if the company does not successfully develop resources. Creating and maintaining an inventory of economic projects depends on many factors, including obtaining and renewing rights to explore, develop and produce hydrocarbons; drilling success; reservoir optimization; technology advancements; ability to bring long-lead-time, capital-intensive projects to completion on budget and on schedule.

Customer and revenue · Changing customer preferences and behavior

The most significant factor that affects the company's results of operations are the prices of crude oil, natural gas, and natural gas liquids, which can be influenced by customer and consumer preferences and the use of substitutes; and governmental regulations, policies and other actions regarding the development of oil and gas reserves, as well as greenhouse gas emissions and climate change.

Cybersecurity and data protection · Third party data security and vendors

The company is increasingly experiencing cyber incidents related to its third-party vendors. Some third-party vendors house the company's critical data and proprietary information on their IT systems, including the cloud; others have access to Chevron's IT systems or provide software through which threat actors could gain access or introduce malware to Chevron's IT systems.

Technology infrastructure · Technology systems and infrastructure failure

The company's operations could be disrupted by natural or human causes beyond its control, including system failures and cyber threats that could result in suspension of operations or harm to people or the natural environment.

Corporate governance · Internal controls and risk management

Chevron has implemented and maintains a system of corporate policies, standards, processes and systems, behaviors and compliance mechanisms to manage safety, health, environmental, reliability and efficiency risks; to verify compliance with applicable laws and policies; and to respond to and learn from unexpected incidents.

Reputation and brand · Esg environmental social governance performance

Unfavorable ESG ratings and investment community divestment initiatives, among other actions, may lead to negative investor sentiment toward Chevron and to the diversion of investment to other industries, which could have a negative impact on our stock price and our access to and costs of capital. Additionally, evolving expectations on various ESG matters, including human rights, biodiversity, waste and water, have increased, and may continue to increase costs, require changes in how we operate and lead to negative stakeholder sentiment.