================================================================================

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    Form 10-Q//A


|X|  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
     THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2001
                                                 -------------

                                       OR

|_|  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
     THE SECURITIES EXCHANGE ACT OF 1934

                         Commission File Number 1-368-2
                                                -------


                               Chevron Corporation
             (Exact name of registrant as specified in its charter)


          Delaware                                        94-0890210
   ------------------------------                -------------------------------
  (State or other jurisdiction of                       (I.R.S. Employer
   incorporation or organization)                    Identification Number)


       575 Market Street, San Francisco, California                94105
       --------------------------------------------           -------------
       (Address of principal executive offices)                (Zip Code)


      Registrant's telephone number, including area code (415) 894-7700
                                                         --------------

                                      NONE
          ------------------------------------------------------------
         (Former name or former address, if changed since last report.)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes   X      No
                                      ------      -----


Indicate the number of shares of each of the issuer's classes of common stock,
as of the latest practicable date:


             Class                             Outstanding as of June 30, 2001
----------------------------------             -------------------------------
 Common stock, $.75 par value                             642,457,432

================================================================================


                                      INDEX
                                                                       Page No.
                  Cautionary Statements Relevant to Forward-Looking
                  Information for  the Purpose of "Safe Harbor"
                  Provisions of the Private Securities Litigation
                  Reform Act of 1995                                        1

PART I.           FINANCIAL INFORMATION

    Item 1.       Financial Statements
                  Consolidated Statement of Income for the three
                   months and six months ended June 30, 2001 and 2000       2

                  Consolidated Statement of Comprehensive Income
                   for the three months and six months ended
                   June 30, 2001 and 2000                                   2

                  Consolidated Balance Sheet at June 30, 2001 and
                   December 31, 2000                                        3

                  Consolidated Statement of Cash Flows for the
                   six months ended June 30, 2001 and 2000                  4

                  Notes to Consolidated Financial Statements             5-13

    Item 2.       Management's Discussion and Analysis of
                     Financial Condition and Results of Operations      14-25

PART II.          OTHER INFORMATION

    Item 1.       Legal Proceedings                                        26

    Item 4.       Submission of Matters to a Vote of Security Holders      26

    Item 6.       Listing of Exhibits and Reports on Form 8-K              27

    Signature                                                              27

    Exhibit:      Computation of Ratio of Earnings to Fixed Charges        28

        CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR
                 THE PURPOSE OF "SAFE HARBOR" PROVISIONS OF THE
                PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This quarterly report on Form 10-Q contains forward-looking statements relating
to Chevron's operations that are based on management's current expectations,
estimates and projections about the petroleum and chemicals industries. Words
such as "anticipates," "expects," "intends," "plans," "projects," "believes,"
"seeks," "estimates" and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and other factors,
some of which are beyond our control and are difficult to predict. Therefore,
actual outcomes and results may differ materially from what is expressed or
forecasted in such forward-looking statements. You should not place undue
reliance on these forward-looking statements, which speak only as of the date of
this report. Unless legally required, Chevron undertakes no obligation to update
publicly any forward-looking statements, whether as a result of new information,
future events or otherwise.

Among the factors that could cause actual results to differ materially are crude
oil and natural gas prices; refining and marketing margins; chemicals prices and
competitive conditions affecting supply and demand for aromatics, olefins and
additives products; actions of competitors; the competitiveness of alternate
energy sources or product substitutes; technological developments; inability of
the company's joint-venture partners to fund their share of operations and
development activities; potential failure to achieve expected production from
existing and future oil and gas development projects; potential delays in the
development, construction or start-up of planned projects; the ability to
successfully consummate the proposed merger with Texaco and successfully
integrate the operations of both companies; potential disruption or interruption
of the company's production or manufacturing facilities due to accidents or
political events; potential liability for remedial actions under existing or
future environmental regulations and litigation; significant investment or
product changes under existing or future environmental regulations (including,
particularly, regulations and litigation dealing with gasoline composition and
characteristics); and potential liability resulting from pending or future
litigation. In addition, such statements could be affected by general domestic
and international economic and political conditions. Unpredictable or unknown
factors not discussed herein also could have material adverse effects on
forward-looking statements.


                                      -1-


                          PART I. FINANCIAL INFORMATION



                      CHEVRON CORPORATION AND SUBSIDIARIES

                        CONSOLIDATED STATEMENT OF INCOME
                                   (Unaudited)
                                                           Three Months Ended                  Six Months Ended
                                                                      June 30                           June 30
                                                     ------------------------           -----------------------
Millions of Dollars,  Except Per-Share Amounts             2001          2000                2001          2000
---------------------------------------------------------------------------------------------------------------
                                                                                            
Revenues and Other Income
Sales and other operating revenues*                     $12,717       $12,982             $24,682       $24,367
Income from equity affiliates                               243           175                 463           371
Other income                                                 46            67                 159           213
                                                     ----------------------------------------------------------
   Total Revenues and Other Income                       13,006        13,224              25,304        24,951
                                                     ----------------------------------------------------------
Costs and Other Deductions
Purchased crude oil and products                          6,628         7,258              12,589        13,507
Operating expenses                                        1,263         1,304               2,446         2,542
Selling, general and administrative expenses                462           386                 903           763
Exploration expenses                                        178           123                 285           219
Depreciation, depletion and amortization                    690           699               1,372         1,350
Taxes other than on income*                               1,271         1,194               2,460         2,332
Interest and debt expense                                    75           126                 162           255
                                                     ----------------------------------------------------------
   Total Costs and Other Deductions                      10,567        11,090              20,217        20,968
                                                     ----------------------------------------------------------
Income Before Income Tax Expense                          2,439         2,134               5,087         3,983
Income Tax Expense                                        1,115         1,018               2,163         1,823
                                                     ----------------------------------------------------------
Net Income                                              $ 1,324       $ 1,116             $ 2,924       $ 2,160
                                                     ----------------------------------------------------------

Per Share of Common Stock:
   Net Income                 - Basic                   $  2.06      $   1.71            $   4.55       $  3.30
                              - Diluted                 $  2.05      $   1.71            $   4.54       $  3.30
   Dividends                                            $   .65      $    .65            $   1.30       $  1.30

Weighted Average Number of
 Shares Outstanding (000s)    - Basic                   642,884       653,317             642,457       654,724
                              - Diluted                 644,677       654,700             643,914       655,976

*   Includes consumer excise taxes; 2000 conformed
     to 2001 presentation.                              $ 1,066      $  1,020            $  2,067      $  1,962





                                            CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                                              (Unaudited)

                                                           Three Months Ended                  Six Months Ended
                                                                      June 30                           June 30
                                                     ------------------------           -----------------------
Millions of Dollars                                        2001          2000                2001          2000
------------------------------------------------------------------------------------------------------------------------------------
                                                                                           
Net Income                                             $  1,324     $   1,116            $  2,924      $  2,160
                                                     ----------------------------------------------------------
   Currency translation adjustment                          (15)           (3)                (14)           (3)
   Unrealized holding (loss) gain on securities              (2)           (6)                  8             4
   Net derivatives gain on hedge transactions                16             -                  16             -
   Minimum pension liability adjustment                       -             -                   -           (15)
                                                     ----------------------------------------------------------
 Other Comprehensive (Loss) Income, net of tax               (1)           (9)                 10           (14)
                                                     ----------------------------------------------------------
Comprehensive Income                                   $  1,323     $   1,107            $  2,934      $  2,146
                                                     ----------------------------------------------------------


See accompanying notes to consolidated financial statements.


                                      -2-




                                                 CHEVRON CORPORATION AND SUBSIDIARIES

                                                      CONSOLIDATED BALANCE SHEET

                                                                              At June 30             At December 31
Millions of Dollars                                                                 2001                       2000
-------------------------------------------------------------------------------------------------------------------
                                                                                                      

ASSETS                                                                       (Unaudited)
Cash and cash equivalents                                                        $ 2,895                    $ 1,896
Marketable securities                                                              1,521                        734
Accounts and notes receivable                                                      3,553                      3,837
Inventories:
    Crude oil and petroleum products                                                 582                        631
    Chemicals                                                                        205                        191
    Materials, supplies and other                                                    255                        250
                                                                                -----------------------------------
           Total  inventories                                                      1,042                      1,072
Prepaid expenses and other current assets                                            646                        674
                                                                                -----------------------------------
       Total Current Assets                                                        9,657                      8,213
Long-term receivables                                                                733                        802
Investments and advances                                                           9,368                      8,107

Properties, plant and equipment, at cost                                          53,154                     51,908
Less: accumulated depreciation, depletion and amortization                        30,134                     29,014
                                                                                -----------------------------------
           Properties, plant and equipment, net                                   23,020                     22,894

Deferred charges and other assets                                                  1,277                      1,248
                                                                                -----------------------------------
            Total Assets                                                         $44,055                    $41,264
                                                                                -----------------------------------
-------------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY

Short-term debt                                                                 $  2,074                   $  1,079
Accounts payable                                                                   3,124                      3,163
Accrued liabilities                                                                1,322                      1,530
Federal and other taxes on income                                                  1,850                      1,479
Other taxes payable                                                                  464                        423
                                                                                -----------------------------------
       Total Current Liabilities                                                   8,834                      7,674
Long-term debt                                                                     4,371                      4,872
Capital lease obligations                                                            264                        281
Deferred credits and other noncurrent obligations                                  1,660                      1,768
Deferred income taxes                                                              4,866                      4,908
Reserves for employee benefit plans                                                1,836                      1,836
                                                                                -----------------------------------
       Total Liabilities                                                          21,831                     21,339
Preferred stock (authorized 100,000,000
    shares, $1.00 par value, none issued)                                              -                          -
Common stock (authorized 2,000,000,000 shares,
 712,487,068 issued, $.75 par value)                                                 534                        534
Capital in excess of par value                                                     2,784                      2,758
Deferred compensation                                                               (511)                      (611)
Accumulated other comprehensive income                                              (170)                      (180)
Retained earnings                                                                 23,004                     20,909
Treasury stock, at cost (70,041,498 and 71,427,097 shares
    at June 30, 2001 and December 31, 2000, respectively)                         (3,417)                    (3,485)
                                                                                -----------------------------------
       Total Stockholders' Equity                                                 22,224                     19,925
                                                                                -----------------------------------
           Total Liabilities and Stockholders' Equity                            $44,055                    $41,264
                                                                                -----------------------------------

See accompanying notes to consolidated financial statements.



                                      -3-







                                                 CHEVRON CORPORATION AND SUBSIDIARIES

                                                  CONSOLIDATED STATEMENT OF CASH FLOWS
                                                              (Unaudited)
                                                                                                   Six Months Ended
                                                                                                            June 30
                                                                                         --------------------------
Millions of Dollars                                                                          2001              2000
-------------------------------------------------------------------------------------------------------------------
                                                                                                      
Operating Activities
     Net income                                                                           $ 2,924           $ 2,160
     Adjustments
       Depreciation, depletion and amortization                                             1,372             1,350
       Dry hole expenses*                                                                     178               111
       Distributions less than income from equity affiliates                                 (116)              (72)
       Net before-tax gains on asset retirements and sales                                     (4)              (67)
       Net foreign currency gains                                                             (18)              (41)
       Deferred income tax provision                                                           74               233
       Net decrease in operating working capital                                              453               182
       Other                                                                                   (8)              (18)
                                                                                         --------------------------
          Net Cash Provided by Operating Activities                                         4,855             3,838
                                                                                         --------------------------
Investing Activities
     Capital expenditures*                                                                 (2,334)           (1,878)
     Proceeds from asset sales                                                                 67               281
     Net (purchases) sales of marketable securities                                          (113)               72
     Net purchases of other short-term investments                                           (666)                -
     Other investing cash flows, net                                                            9                 -
                                                                                         --------------------------
          Net Cash Used for Investing Activities                                           (3,037)           (1,525)
                                                                                         --------------------------

Financing Activities
     Net borrowings (repayments) of short-term obligations                                    925            (1,268)
     Proceeds from issuance of long-term debt                                                  29                39
     Loans to equity affiliate                                                               (418)                -
     Repayments of long-term debt and other financing obligations                            (593)             (137)
     Cash dividends                                                                          (834)             (851)
     Net sales (purchases) of treasury shares                                                  73              (338)
                                                                                         --------------------------
          Net Cash Used For Financing Activities                                             (818)           (2,555)
                                                                                         --------------------------
Effect of Exchange Rate Changes on Cash and Cash Equivalents                                   (1)               (1)
                                                                                         --------------------------
Net Change in Cash and Cash Equivalents                                                       999              (243)
Cash and Cash Equivalents at January 1                                                      1,896             1,345
                                                                                         --------------------------
Cash and Cash Equivalents at June 30                                                      $ 2,895           $ 1,102
                                                                                         --------------------------


*    Certain 2000 amounts have been reclassified to conform to the 2001 presentation

See accompanying notes to consolidated financial statements.



                                      -4-


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Interim Financial Statements

The accompanying consolidated financial statements of Chevron Corporation and
its subsidiaries (the company) have not been audited by independent accountants,
except for the balance sheet at December 31, 2000. In the opinion of the
company's management, the interim data include all adjustments necessary for a
fair statement of the results for the interim periods. These adjustments were of
a normal recurring nature, except for the special items described in Note 2.

Certain notes and other information have been condensed or omitted from the
interim financial statements presented in this Quarterly Report on Form 10-Q.
Therefore, these financial statements should be read in conjunction with the
company's 2000 Annual Report on Form 10-K.

The results for the three- and six-month periods ended June 30, 2001, are not
necessarily indicative of future financial results.

Note 2. Net Income

Net income for the second quarter and first six months of 2001 included special
charges of $60 million related to merger-related expenses and prior-year tax
adjustments.

The 2000 second quarter included a special charge of $25 million related to
prior-year tax adjustments.

Net income for the first six months of 2000 included net special charges of $87
million. Along with the prior-year tax adjustment, net special items included a
charge for a patent litigation issue.

Foreign currency losses were $27 million in second quarter 2001, compared with
gains of $29 million in the comparable 2000 quarter. The U.S. dollar weakened
against a number of currencies in the second quarter 2001, primarily the
Canadian and Australian dollars. For the six-month periods, foreign currency
gains were $44 million and $75 million in 2001 and 2000, respectively.

Note 3. Information Relating to the Statement of Cash Flows

The "Net decrease in operating working capital" was composed of the following:



                                                                          Six Months Ended
                                                                                   June 30
                                                                 -------------------------
 Millions of Dollars                                                2001              2000
------------------------------------------------------------------------------------------
                                                                            
 Decrease (increase) in accounts and notes receivable             $  277          $   (484)
 Decrease (increase) in inventories                                   30              (110)
 Increase in prepaid expenses and other current assets               (28)              (17)
 (Decrease) increase in accounts payable and accrued liabilities    (255)              111
 Increase in income and other taxes payable                          429               682
------------------------------------------------------------------------------------------

      Net decrease in operating working capital                   $  453          $    182
------------------------------------------------------------------------------------------



"Net Cash Provided by Operating Activities" included the following cash payments
for interest on debt and for income taxes:



                                                                          Six Months Ended
                                                                                   June 30
                                                                --------------------------
 Millions of Dollars                                                2001              2000
------------------------------------------------------------------------------------------
                                                                             
 Interest on debt (net of capitalized interest)                  $   200           $   258
 Income taxes                                                    $ 1,720           $   973
------------------------------------------------------------------------------------------


                                      -5-



The "Net (purchases) sales of marketable securities" consisted of the following
gross amounts:



                                                                          Six Months Ended
                                                                                   June 30
                                                               ---------------------------
 Millions of Dollars                                                2001              2000
------------------------------------------------------------------------------------------
                                                                             
 Marketable securities purchased                                 $(1,446)          $(1,337)
 Marketable securities sold                                        1,333             1,409
------------------------------------------------------------------------------------------

      Net (purchases) sales of marketable securities             $  (113)          $    72
------------------------------------------------------------------------------------------



"Net purchases of other short-term investments," of $666 million in 2001 were in
a variety of short-term money market instruments with maturities similar to the
company's commercial paper portfolio.

The major components of "Capital expenditures" and the reconciliation of this
amount to the capital and exploratory expenditures, excluding equity affiliates,
presented in "Management's Discussion and Analysis of Financial Condition and
Results of Operations" are presented in the following table.



                                                                            Six Months Ended
                                                                                     June 30
                                                                    ------------------------
Millions of Dollars                                                         2001        2000
--------------------------------------------------------------------------------------------
                                                                               
Additions to properties, plant and equipment                             $ 1,472 (1) $ 1,316
Additions to investments                                                     731         487
Current year dry hole expenditures                                           141          91
Payments for other liabilities and assets, net                               (10)        (16)
                                                                    ------------------------
Capital expenditures                                                       2,334       1,878
Other exploration expenditures                                               107         109
Payments of long-term debt and other financing obligations                   210 (2)       7
                                                                    ------------------------

Capital and exploratory expenditures, excluding equity affiliates        $ 2,651     $ 1,994
--------------------------------------------------------------------------------------------

(1) Net of non-cash reclassification of $89.
(2) Represents a deferred payment related to 1993 acquisition of
     an interest in the Tengizchevroil joint venture.



The Consolidated Statement of Cash Flows excludes the following additional
non-cash transactions:

The company's Employee Stock Ownership Plan (ESOP) repaid $100 million and $10
million of matured debt guaranteed by Chevron Corporation in January of 2001 and
2000, respectively. These payments were recorded by the company as a reduction
in its debt outstanding and in "Deferred compensation."


                                      -6-


Note 4.  Operating Segments and Geographic Data

Chevron manages its exploration and production; refining, marketing and
transportation; and chemicals businesses separately.

"All Other" activities include the company's share of earnings from and
investment in Dynegy Inc., corporate administrative costs, worldwide cash
management and debt financing activities, coal mining operations, insurance
operations, real estate activities and certain e-businesses. The company's
primary country of operation is the United States of America, its country of
domicile. Activities in no other country meet the materiality requirements for
separate disclosure.

The company evaluates the performance of its operating segments on an after-tax
basis, excluding the effects of debt financing interest expense or investment
interest income, both of which are managed at the corporate level on a worldwide
basis. Corporate administrative costs and assets are not allocated to the
operating segments; however, operating segments are billed for direct corporate
services. Nonbillable costs remain as corporate center expenses. After-tax
income (loss) by segment for the three- and six-month month periods ended June
30, 2001 and 2000, are presented in the following table.





                                                     Three Months Ended            Six Months Ended
                                                                June 30                     June 30
                                                   ---------------------  -------------------------
 Millions of Dollars                                   2001         2000         2001          2000
---------------------------------------------------------------------------------------------------
                                                                                
Exploration and Production
  United States                                    $    446      $   388      $ 1,166       $   753
  International                                         557          580        1,246         1,233
                                                   ------------------------------------------------
Total Exploration and Production                      1,003          968        2,412         1,986
                                                   ------------------------------------------------

Refining, Marketing and Transportation
  United States                                         327          167          468           160
  International                                          49           20          196            29
                                                   ------------------------------------------------
Total Refining, Marketing and Transportation            376          187          664           189
                                                   ------------------------------------------------

Chemicals
  United States                                          10           43          (33)           90
  International                                          17            8           24            29
                                                   ------------------------------------------------
Total Chemicals                                          27           51           (9)          119
                                                   ------------------------------------------------
                                                   ------------------------------------------------
Total Segment Income                               $  1,406      $ 1,206      $ 3,067       $ 2,294
                                                   ------------------------------------------------

Interest Expense                                        (51)         (87)        (108)         (176)
Interest Income                                          28           20           55            35
Other                                                   (59)         (23)         (90)            7
                                                   ------------------------------------------------
Net Income                                         $  1,324      $ 1,116      $ 2,924       $ 2,160
                                                   ------------------------------------------------



                                      -7-



Operating segment sales and other operating revenues, including internal
transfers, for the three- and six-month periods ended June 30, 2001 and 2000,
are presented in the following table. Chemicals segment revenues for the 2000
period were derived from the manufacture and sale of petrochemicals, plastic
resins, and lube oil and fuel additives. In 2001, only revenues from the
manufacture and sale of lube oil and fuel additives are included, following the
formation of the Chevron Phillips Chemicals joint venture in July 2000
(accounted for under the equity method).




                                                                 Three Months Ended           Six Months Ended
                                                                            June 30                    June 30
                                                              ---------------------     ----------------------
 Millions of Dollars                                              2001         2000         2001          2000
--------------------------------------------------------------------------------------------------------------
                                                                                           
Exploration and Production
  United States                                                $ 1,658      $ 1,340      $ 3,822       $ 2,561
  International                                                  2,553        2,588        4,988         4,948
                                                              ------------------------------------------------
    Sub-total                                                    4,211        3,928        8,810         7,509
  Intersegment Elimination - United States                        (779)        (724)      (1,542)       (1,480)
  Intersegment Elimination - International                      (1,174)      (1,224)      (2,195)       (2,243)
                                                              ------------------------------------------------
Total Exploration and Production                                 2,258        1,980        5,073         3,786
                                                              ------------------------------------------------
Refining, Marketing and Transportation
  United States                                                  8,048        7,462       15,087        14,177
  International*                                                 2,078        2,468        3,874         4,262
                                                              ------------------------------------------------
    Sub-total                                                   10,126        9,930       18,961        18,439
  Intersegment Elimination - United States                         (30)        (152)         (54)         (282)
  Intersegment Elimination - International                          (4)          (3)          (8)           (7)
                                                              ------------------------------------------------
Total Refining, Marketing and Transportation                    10,092        9,775       18,899        18,150
                                                              ------------------------------------------------
Chemicals
  United States                                                     95        1,056          179         1,973
  International                                                    188          150          372           400
                                                              ------------------------------------------------
    Sub-total                                                      283        1,206          551         2,373
  Intersegment Elimination - United States                         (21)         (46)         (42)          (99)
                                                              ------------------------------------------------
Total Chemicals                                                    262        1,160          509         2,274
                                                              ------------------------------------------------
All Other
  United States                                                    114           88          220           201
  International                                                      6            4           10             8
                                                              ------------------------------------------------
    Sub-total                                                      120           92          230           209
  Intersegment Elimination - United States                         (13)         (22)         (25)          (46)
  Intersegment Elimination - International                          (2)          (3)          (4)           (6)
                                                              ------------------------------------------------
Total All Other                                                    105           67          201           157
                                                              ------------------------------------------------
Sales and Other Operating Revenues
  United States                                                  9,915        9,946       19,308        18,912
  International                                                  4,825        5,210        9,244         9,618
                                                              ------------------------------------------------
    Sub-total                                                   14,740       15,156       28,552        28,530
  Intersegment Elimination - United States                        (843)        (944)      (1,663)       (1,907)
  Intersegment Elimination - International                      (1,180)      (1,230)      (2,207)       (2,256)
                                                              ------------------------------------------------
Total Sales and Other Operating Revenues                       $12,717      $12,982      $24,682       $24,367
--------------------------------------------------------------------------------------------------------------


*  2000 conformed to the 2001 presentation



                                      -8-


Segment assets at June 30, 2001, and year-end 2000 are presented in the
following table. Segment assets do not include intercompany investments or
intercompany receivables.




                                                                         At June 30      At December 31
                                                                       --------------------------------
 Millions of Dollars                                                           2001                2000
-------------------------------------------------------------------------------------------------------
                                                                                          
 Exploration and Production
    United States                                                           $ 5,571             $ 5,568
    International                                                            14,922              14,493
                                                                       --------------------------------
 Total Exploration and Production                                            20,493              20,061
                                                                       --------------------------------
 Refining, Marketing and Transportation
    United States                                                             8,220               8,365
    International                                                             4,267               3,941
                                                                       --------------------------------
 Total Refining, Marketing and Transportation                                12,487              12,306
                                                                       --------------------------------
 Chemicals
    United States                                                             2,271               2,342
    International                                                               722                 728
                                                                       --------------------------------
    Total Chemicals                                                           2,993               3,070
                                                                       --------------------------------
 Total Segment Assets                                                        35,973              35,437
                                                                       --------------------------------
 All Other
    United States                                                             5,187               4,398
    International                                                             2,895               1,429
                                                                       --------------------------------
 Total All Other                                                              8,082               5,827
                                                                       --------------------------------
 Total Assets - United States                                                21,249              20,673
 Total Assets - International                                                22,806              20,591
-------------------------------------------------------------------------------------------------------
 Total Assets                                                               $44,055             $41,264
-------------------------------------------------------------------------------------------------------


Note 5.  Summarized Financial Data - Chevron U.S.A. Inc.

At June 30, 2001, Chevron U.S.A. Inc. was Chevron  Corporation's  principal U.S.
operating  subsidiary,  consisting  primarily of the company's  U.S.  integrated
petroleum  operations  (excluding most of the pipeline  operations).  During the
first half of 2001, these operations were conducted  primarily by two divisions:
Chevron U.S.A.  Production Company and Chevron Products Company.  For the three-
and six-month  periods ended June 30, 2000,  Chevron  U.S.A.  Inc. also included
most of Chevron's worldwide petrochemical  operations.  Chevron combined most of
its  petrochemicals  businesses with those of Phillips Petroleum Company on July
1, 2000.  Chevron U.S.A. Inc. holds the investment in this joint venture,  which
is accounted for using the equity method.  Summarized financial  information for
Chevron  U.S.A.  Inc.  and its  consolidated  subsidiaries  is  presented in the
following table.



                                                         Three Months Ended            Six Months Ended
                                                                    June 30                     June 30
                                            ------------------------------- ---------------------------
 Millions of Dollars                                        2001       2000             2001       2000
-------------------------------------------------------------------------------------------------------
                                                                                    
 Sales and other operating revenues                      $10,269    $10,538          $19,845    $19,683
 Costs and other deductions*                               9,364      9,881           17,987     18,746
 Net income                                                  650        492            1,354        828
-------------------------------------------------------------------------------------------------------

 * Certain 2000 costs have been reclassified to conform to the 2001 presentation



                                      -9-




                                                                At June 30              At December 31
                                                                ----------              --------------
Millions of Dollars                                                   2001                        2000
------------------------------------------------------------------------------------------------------
                                                                                        
Current assets                                                    $  5,067                    $  4,396
Other assets                                                        21,899                      20,738

Current liabilities                                                  4,220                       4,094
Other liabilities                                                   10,596                      10,251

Net equity                                                          12,150                      10,789
------------------------------------------------------------------------------------------------------

Memo: Total Debt                                                  $  7,156                    $  6,728



Note 6. Summarized Financial Data - Chevron Transport Corporation

Chevron Transport Corporation Limited (CTC), a Bermuda corporation, is an
indirect, wholly owned subsidiary of Chevron Corporation. CTC is the principal
operator of Chevron's international tanker fleet and is engaged in the marine
transportation of crude oil and refined petroleum products. Most of CTC's
shipping revenue is derived by providing transportation services to other
Chevron companies. Chevron Corporation has guaranteed this subsidiary's
obligations in connection with certain debt securities issued by a third party.
Summarized financial information for CTC and its consolidated subsidiaries is
presented below. This information was derived from the financial statements
prepared on a stand-alone basis in conformity with accounting principles
generally accepted in the United States of America.




                                                        Three Months Ended            Six Months Ended
                                                                   June 30                     June 30
                                           -------------------------------  --------------------------
Millions of Dollars                                        2001       2000             2001       2000
------------------------------------------------------------------------------------------------------
                                                                                      
Sales and other operating revenues                         $232       $171             $491       $293
Costs and other deductions                                  208        193              417        343
Net income (loss)                                            24        (24)              75        (52)
-------------------------------------------------------------------------------------------------------





                                                                At June 30              At December 31
                                                                ----------              --------------
Millions of Dollars                                                   2001                        2000
------------------------------------------------------------------------------------------------------
                                                                                        
Current assets                                                     $   159                    $    205
Other assets                                                           535                         530

Current liabilities                                                    231                         309
Other liabilities                                                      323                         361

Net equity                                                             140                          65
------------------------------------------------------------------------------------------------------


Separate financial statements and other disclosures with respect to CTC are
omitted, as such separate financial statements and other disclosures are not
material to investors in the debt securities deemed issued by CTC. There were no
restrictions on CTC's ability to pay dividends or make loans or advances at June
30, 2001.

                                      -10-


Note 7. Summarized Financial Data - Caltex Group of Companies

Summarized financial information for the Caltex Group of Companies, owned 50
percent each by Chevron and Texaco Inc., is as follows (amounts reported are on
a 100 percent Caltex Group basis):




                                                        Three Months Ended            Six Months Ended
                                                                   June 30                     June 30
                                           -------------------------------  --------------------------
Millions of Dollars                                        2001       2000             2001       2000
------------------------------------------------------------------------------------------------------
                                                                                    
Gross revenues*                                          $4,372     $5,161           $8,349     $9,414
Income before income taxes                                  205        264              550        483
Net income                                                   73        128              279        230
------------------------------------------------------------------------------------------------------

* 2000 restated to conform to 2001 presentation.



Note 8.  Income Taxes

Taxes on income for the second quarter and first half of 2001 were $1.115
billion and $2.163 billion, respectively, compared with $1.018 billion and
$1.823 billion for the comparable periods in 2000. The effective tax rates were
43 percent and 46 percent for the first half of 2001 and 2000, respectively. The
decrease in the effective tax rate was primarily the result of a shift in
international before-tax income from countries with higher income tax rates to
countries with lower income tax rates. Partially offsetting this decrease were
higher state taxes, higher prior-year tax adjustments, and lower equity
affiliates' earnings as a proportion of before-tax income.

Note 9.  Litigation

Chevron and five other oil companies filed suit in 1995 contesting the validity
of a patent granted to Unocal Corporation for reformulated gasoline, which
Chevron sells in California in certain months of the year. In March 2000, the U.
S. Court of Appeals for the Federal Circuit upheld a September 1998 District
Court decision that Unocal's patent was valid and enforceable and assessed
damages of 5.75 cents per gallon for gasoline produced in infringement of the
patent. In May 2000, the Federal Circuit Court denied a petition for rehearing
with the U.S. Court of Appeals for the Federal Circuit filed by Chevron and five
other defendants in this case. The defendant companies petitioned the U.S.
Supreme Court and in February 2001, the Supreme Court denied the petition to
review the lower court's ruling and the case was remanded to the District Court
for an accounting of all infringing gasoline produced from August 1, 1996, to
the present. The defendants have advised the District Court that they intend to
seek a new trial on the issues of damages and infringement. A hearing is
tentatively scheduled for September 2001 to argue the defendants' Motion to Stay
and Motion for a Trial on royalty and infringement. Additionally, in May 2001
the U.S. Patent Office granted the defendants' petition to reexamine the
validity of Unocal's patent.

If Unocal's patent ultimately is upheld, the company's financial exposure
includes royalties, plus interest, for production of gasoline that is proven to
have infringed the patent. As a result of the March 2000 ruling, the company
recorded in the first quarter 2000 an after-tax charge of $62 million. The
majority of this charge pertained to the estimated royalty on gasoline
production in the earlier part of a four-year period ending December 31, 1999,
before Chevron modified its manufacturing processes to minimize the production
of gasoline that allegedly infringed on Unocal's patented formulations.
Subsequently, the company has been accruing in the normal course of business any
future estimated liability for potential infringement of the patent covered by
the trial court's ruling. In June 2000, Chevron paid $22.7 million to Unocal -
$17.2 million for the original court judgement for California gasoline produced
in violation of Unocal's patent from March through July 1996 and $5.5 million of
interest and fees.

Unocal has obtained additional patents for alternate formulations that could
affect a larger share of U.S. gasoline production. Chevron believes these
additional patents are invalid and unenforceable. However, if such patents are
ultimately upheld, the competitive and financial effects on the company's
refining and marketing operations, while presently indeterminable, could be
material.

Another issue involving the company is the ongoing public debate concerning the
petroleum industry's use of MTBE and its potential environmental impact through
seepage into groundwater. Along with other oil companies,


                                      -11-


the company is a party to lawsuits and claims related to the use of the chemical
MTBE in certain oxygenated  gasolines.  These actions may require the company to
correct or ameliorate the alleged effects on the environment of prior release of
MTBE by the company or other parties.  Additional lawsuits and claims related to
the use of MTBE may be filed in the  future.  Costs to the  company  related  to
these lawsuits and claims are not currently determinable. Chevron has eliminated
the use of MTBE in gasoline it sells in certain areas.

Note 10. Other Contingencies and Commitments

The company's U.S. federal income tax have been settled through 1993. The
company's California franchise tax liabilities have been settled through 1991.

Settlement of open tax years, as well as tax issues in other countries where the
company conducts its businesses, is not expected to have a material effect on
the consolidated financial position or liquidity of the company and, in the
opinion of management, adequate provision has been made for income and franchise
taxes for all years under examination or subject to future examination.

The company and its subsidiaries have certain other contingent liabilities with
respect to guarantees, direct or indirect, of debt of affiliated companies or
others and long-term unconditional purchase obligations and commitments,
throughput agreements and take-or-pay agreements, some of which relate to
suppliers' financing arrangements.

The company is subject to loss contingencies pursuant to environmental laws and
regulations that in the future may require the company to take action to correct
or ameliorate the effects on the environment of prior release of chemical or
petroleum substances, including MTBE, by the company or other parties. Such
contingencies may exist for various sites including, but not limited to:
Superfund sites and refineries, oil fields, service stations, terminals, and
land development areas, whether operating, closed or sold. The amount of such
future cost is indeterminable due to such factors as the unknown magnitude of
possible contamination, the unknown timing and extent of the corrective actions
that may be required, the determination of the company's liability in proportion
to other responsible parties, and the extent to which such costs are recoverable
from third parties. While the company has provided for known environmental
obligations that are probable and reasonably estimable, the amount of future
costs may be material to results of operations in the period in which they are
recognized. The company does not expect these costs to have a material effect on
its consolidated financial position or liquidity. Also, the company does not
believe its obligations to make such expenditures have had, or will have, any
significant impact on the company's competitive position relative to other U.S.
or international petroleum or chemical concerns.

The company believes it has no material market or credit risk to its operations,
financial position or liquidity as a result of its commodities, and other
derivatives activities. However, the results of operations and financial
position of certain equity affiliates may be affected by their business
activities involving the use of derivative instruments.

The company's operations, particularly oil and gas exploration and production,
can be affected by changing economic, regulatory and political environments in
the various countries, including the United States, in which it operates. In
certain locations, host governments have imposed restrictions, controls and
taxes, and, in others, political conditions have existed that may threaten the
safety of employees and the company's continued presence in those countries.
Internal unrest or strained relations between a host government and the company
or other governments may affect the company's operations. Those developments
have, at times, significantly affected the company's operations and related
results, and are carefully considered by management when evaluating the level of
current and future activity in such countries.

For oil and gas producing operations, ownership agreements may provide for
periodic reassessments of equity interests in estimated oil and gas reserves.
These activities, individually or together, may result in gains or losses that
could be material to earnings in any given period. One such equity
redetermination process has been under way since 1996 for Chevron's interests in
four producing zones at the Naval Petroleum Reserve at Elk Hills in California,
for the time when the remaining interests in these zones were owned by the U.S.
Department of Energy (DOE). A wide range remains for a possible net settlement
amount for the four zones. Chevron currently estimates its maximum possible net
before-tax liability at less than $400 million. At the same time, a possible
maximum net amount that could be owed to Chevron is estimated at more than $200
million. The timing of the settlement and the exact amount within this range of
estimates are uncertain.

                                      -12-


Areas in which the company has significant operations include the United States
of America, Canada, Australia, the United Kingdom, Norway, Republic of Congo,
Angola, Nigeria, Chad, Equatorial Guinea, Democratic Republic of Congo, Papua
New Guinea, China, Venezuela, Thailand, Argentina and Brazil. The company's
Caltex affiliates have significant operations in Indonesia, Korea, Australia,
Thailand, the Philippines, Singapore, and South Africa. The company's
Tengizchevroil affiliate operates in Kazakhstan. The company's Chevron Phillips
Chemical Company LLC affiliate manufactures and markets a wide range of
petrochemicals and plastics on a worldwide basis, with manufacturing facilities
in existence or under construction in the United States, Puerto Rico, Singapore,
China, South Korea, Saudi Arabia, Qatar, Mexico and Belgium. The company's
Dynegy affiliate has operations in the United States of America, Canada, the
United Kingdom and other European countries.

Chevron receives claims from and submits claims to customers, trading partners,
host governments, contractors, insurers and suppliers. The amounts of these
claims, individually and in the aggregate, may be significant and take lengthy
periods to resolve. The company also suspends the costs of exploratory wells
pending a final determination of the commercial potential of the related oil and
gas fields. The ultimate disposition of these well costs is dependent on the
results of future drilling activity and/or development decisions. If the company
decides not to continue development, the costs of these wells are expensed. The
company and its affiliates also continue to review and analyze their operations
and may close, abandon, sell, exchange, acquire or restructure assets to achieve
operational or strategic benefits and to improve competitiveness and
profitability. These activities, individually or together, may result in gains
or losses in future periods.

Note 11.  New Accounting Standards

The company adopted The Financial Accounting Standards Board (FASB) Statement
No. 133, "Accounting for Derivative Instruments and Hedging Transactions" (FAS
133), as amended by FAS 138, "Accounting for Derivative Instruments and Hedging
Transactions - An Amendment of FASB Statement No. 133," effective January 1,
2001. The adoption of these new standards did not have a significant impact on
the company's results of operations or financial position. The company uses, on
a limited basis, a variety of derivative instruments, principally swaps and
futures, to manage a small portion of its exposure to price volatility stemming
from its integrated petroleum activities. All of these instruments are commonly
used in oil and gas trading activities and involve little complexity. Because of
Chevron's limited use of derivative instruments, the company elected not to
account for its derivative instruments as hedges under the new standards.
Accordingly, upon adoption, the fair values of the derivative instruments were
recorded as assets or liabilities, with the associated immaterial gains or
losses reported in income. Changes in fair values of these instruments beyond
normal sales and purchases were also reflected in current income. The company
may elect in the future to apply the hedge accounting prescribed by FAS 133 and
FAS 138 if the use of derivative instruments changes significantly. Such an
election would reduce earnings volatility that might otherwise result if changes
in fair values were recognized in current income.

In September 2000, the FASB issued Statement No. 140, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities - A
Replacement of FASB Statement No. 125" (FAS 140). FAS 140 is effective for
transfers occurring after March 31, 2001, and for disclosures relating to
securitization transactions and collateral for fiscal years ending after
December 15, 2000. Adoption of FAS 140 had no significant effect on Chevron's
accounting or disclosures for the types of transactions in the scope of the new
standard.

In July 2001, the FASB issued Statement No. 141, "Business Combinations" (FAS
141) and Statement No. 142, "Goodwill and Other Intangible Assets" (FAS142). FAS
141 is effective for all business combinations initiated after June 30, 2001,
and for all business combinations accounted for using the purchase method for
which the date of acquisition is July 1, 2001, or later. FAS 142 is effective
for fiscal years beginning after December 15, 2001, except that goodwill and
intangible assets acquired after June 30, 2001, will be subject immediately to
the amortization and nonamortization provisions of the Statement. Adoption of
FAS 141 will have no effect on Chevron's pooling-of-interests method of
accounting for the company's proposed merger with Texaco Inc., but will affect
possible future transactions. Similarly, adoption of FAS 142 may affect possible
future transactions, but does not have an effect on the company's prior business
combinations.


                                      -13-


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

              Second Quarter 2001 Compared With Second Quarter 2000
                And First Half 2001 Compared With First Half 2000

Financial Results
-----------------


                                EARNINGS SUMMARY

                                                              Three Months Ended          Six Months Ended
                                                                         June 30                   June 30
                                                  ------------------------------  ------------------------
Millions of Dollars                                          2001           2000          2001        2000
----------------------------------------------------------------------------------------------------------
                                                                                        
Operating Earnings
    Exploration and Production                             $1,003         $  968        $2,412      $1,986
    Refining, Marketing and Transportation                    376            187           664         251
    Chemicals and Other                                         5            (14)          (92)         10
----------------------------------------------------------------------------------------------------------
       Total*                                               1,384          1,141         2,984       2,247
Special Items                                                 (60)           (25)          (60)        (87)
----------------------------------------------------------------------------------------------------------
      Net Income*                                          $1,324         $1,116        $2,924      $2,160
----------------------------------------------------------------------------------------------------------


*  Includes Foreign Currency (Losses) Gains                  $(27)           $29           $44         $75



Net income for the second quarter 2001 was $1.324 billion ($2.05 per share -
diluted), compared with net income of $1.116 billion ($1.71 per share - diluted)
for the 2000 second quarter. Net income for this year's second quarter included
net special charges of $60 million for prior-year tax adjustments and
merger-related costs. The second quarter 2000 special charge of $25 million was
for a prior-year tax adjustment. Excluding special items in both quarters,
operating earnings were $1.384 billion ($2.16 per share - diluted), compared
with $1.141 billion ($1.75 per share - diluted) in last year's second quarter.

Net income for the first six months of 2001 was $2.924 billion ($4.54 per share
- diluted), compared with $2.160 billion ($3.30 per share - diluted) recorded in
the first half of 2000. Net special charges for the first six months of 2001
were the same as the second quarter, while the 2000 period included special
charges of $87 million. Excluding these items, six-month operating earnings were
$2.984 billion in 2001, compared with $2.247 billion earned in the first half of
2000.

The company's earnings for the quarter and year-to-date 2001 primarily reflected
the continued strength of the company's worldwide exploration and production
(upstream) operations and the benefit of sharply higher natural gas prices and
higher oil and gas production. However, the improvement in earnings from the
strong year-ago quarter was largely driven by the U.S. refining, marketing and
transportation (downstream) business. U.S. downstream earnings reflected solid
refined product margins that prevailed through most of the period, as well as
the safe and reliable operation of the company's refinery network. Capacity
utilization at Chevron's refineries was higher than in last year's quarter,
enhancing the benefits from improved industry market conditions. In the
international downstream sector, earnings from the shipping company improved
over last year's quarter, but financial results for Caltex, an affiliate
operating primarily in the Asia-Pacific region remained depressed. Lower
Chemicals earnings during the first half of 2001, were the result, especially
early in the year, of higher than expected raw material and energy costs, which
could not be fully recovered in prices of commodity chemicals.

Operating Environment and Outlook
---------------------------------
Chevron's earnings are affected significantly by fluctuations in industry price
levels for crude oil and natural gas. Average U.S. natural gas prices in the
second quarter and first half of 2001 were considerably higher than in last
year's periods. Henry Hub spot natural gas prices nearly doubled to $5.54 per
thousand cubic feet, compared with $3.09 in the first half of 2000. The average
spot price for West Texas Intermediate (WTI), a benchmark crude oil, remained
relatively strong at $28.33 per barrel in the first six



                                      -14-


months of 2001 - compared with $28.87 for last year's first half - although down
from an average of just over $30 per  barrel  for all of 2000.  Prices  softened
somewhat into the third quarter 2001. At the end of July, the spot price for WTI
was about  $26.60 per barrel and the Henry Hub spot  natural gas price was $3.11
per thousand cubic feet. In an effort to support crude oil prices,  OPEC lowered
production twice this year and recently announced that it will cut production by
an  additional 1 million  barrels per day in September.  The long-term  industry
price effect of these curtailment agreements is uncertain.

Chevron's worldwide net oil-equivalent production increased by 3 percent in both
the second quarter and first half of 2001 compared with the same periods last
year. Additionally, natural gas production in the United States rose 2 percent
in the second quarter and 4 percent for the six months. These U.S. production
increases, the result of a focused drilling effort in the Gulf of Mexico, came
at a time when the average U.S. natural gas realization improved 65 percent from
last year's second quarter and more than doubled on a year-to-date basis.
However, the company's average U.S. crude oil realization of $23.87 and $24.18
for the 2001 second quarter and six months, respectively, was 6 percent lower
than the comparable 2000 periods.

Chevron's oil and gas production levels have not been materially affected by
production curtailments by OPEC and non-OPEC producers. The company believes
that in the current industry environment, the net effect of any production
changes directed by host countries will not be significant to its overall
production levels. However, limits on production may have an adverse effect on
the level of new production from current and future development projects. In
addition, civil unrest, political uncertainty and economic conditions may affect
the company's producing operations. Community protests have disrupted the
company's production in the past, most recently in Nigeria and Indonesia. The
company continues to monitor developments closely in these and other countries
in which it operates.

The earnings of Chevron's U.S. and Canadian downstream businesses rebounded from
the depressed 2000 levels. Margins strengthened this year, with higher product
prices offsetting higher feedstock costs and the higher costs of fuel and
utilities used in refining operations. However, early in the third quarter this
year product margins slipped substantially, primarily on the Gulf Coast, due to
high product inventories. It is uncertain how long these industry conditions
will continue. In the Asia-Pacific region, conditions remain depressed. Both
excess supplies and weakened demand have squeezed industry margins in this area
of the world.

For  commodity  chemical  products,  demand  continues to be weak because of the
slowing U.S. economy while prices are restrained by industry  over-capacity  and
the strong U.S. dollar. Sales margins remain weak, and no significant  near-term
improvement is expected.

Significant Developments Since the First Quarter of 2001
--------------------------------------------------------
Some of the operational highlights since the first quarter of this year were as
follows:

Caspian Pipeline: Line fill of the Caspian Pipeline Consortium's (CPC) pipeline,
owned 15 percent by Chevron, began in March and is expected to be completed in
August. The pipeline connects the Tengiz Field in western Kazakhstan to the
Black Sea port of Novorossiysk, enabling full access to world market prices for
the Tengiz oil and reducing transportation costs.

Angola: Chevron announced a significant new oil discovery in deepwater Block 14,
where the company is operator and has 31 percent ownership. The Tombua Field is
the seventh major discovery by Chevron in Block 14. Additional geologic and
engineering studies are under way.

Chad-Cameroon: Chevron, with a 25 percent interest, and its partners obtained
$600 million in financing for the construction of a 650-mile pipeline from the
Doba oil fields in southern Chad to the coast of Cameroon. First oil production
from the combined $3.5 billion oil field development and pipeline construction
project is expected in 2004. Participants in the financing include the
International Finance Corporation, the U.S. Export-Import Bank and the French
export credit agency, COFACE.

                                      -15-


U.S. Exploration and Production: Production began in late July at the Typhoon
Field, operated and 50 percent-owned by Chevron, in the deep waters of the Gulf
of Mexico. Production is expected to reach 40,000 barrels of oil and 60 million
cubic feet of gas per day in this year's fourth quarter. Chevron and partners
also announced that more than 300 feet of hydrocarbons were encountered in a
deepwater exploratory well on the Trident prospect, located about 185 miles
offshore Corpus Christi, Texas. The wildcat well was drilled in 9,687 feet of
water, setting a world record for drilling in ultra-deepwater. Chevron has a 15
percent interest in the Trident prospect. In late July, Chevron sold its equity
interest in Shenandoah Energy Inc., an equity affiliate with producing
properties in Utah. An after-tax gain of approximately $50 million will be
recognized in the third quarter. Cash proceeds were approximately $104 million.

Chemicals:  Chevron  Phillips  Chemical Co. (CPCC) and Qatar Petroleum  signed a
joint venture agreement for the development of a second petrochemical project in
Qatar.  In the United States,  CPCC and Solvay  Polymers,  Inc. will construct a
high-density  polyethylene plant at the CPCC chemical complex in Baytown, Texas.
Modernization also began of the CPCC styrene monomer plant in St. James, La. For
its  existing  operations,  CPCC expects to achieve in excess of $200 million of
net recurring merger synergies and cost savings in 2001, surpassing the previous
estimate of $150 million.

Merger with Texaco
------------------
Chevron's merger with Texaco is expected to be completed within the twelve-month
timeframe  envisioned  when the  transaction  was  announced  in  October  2000.
Remaining conditions include the receipt of necessary regulatory  clearances and
approval by Texaco and Chevron  stockholders.  The merger is expected to qualify
as a "pooling of  interests,"  which means that the companies will be treated as
if they  had  always  been  combined  for  accounting  and  financial  reporting
purposes.  It is anticipated that the combined company will realize  significant
recurring cost savings after one-time costs for merger-related items.

Contingencies and Significant Litigation
----------------------------------------
Chevron and five other oil companies filed suit in 1995 contesting the validity
of a patent granted to Unocal Corporation for reformulated gasoline, which
Chevron sells in California in certain months of the year. In March 2000, the U.
S. Court of Appeals for the Federal Circuit upheld a September 1998 District
Court decision that Unocal's patent was valid and enforceable and assessed
damages of 5.75 cents per gallon for gasoline produced in infringement of the
patent. In May 2000, the Federal Circuit Court denied a petition for rehearing
with the U.S. Court of Appeals for the Federal Circuit filed by Chevron and five
other defendants in this case. The defendant companies petitioned the U.S.
Supreme Court and in February 2001, the Supreme Court denied the petition to
review the lower court's ruling and the case was remanded to the District Court
for an accounting of all infringing gasoline produced from August 1, 1996, to
the present. The defendants have advised the District Court that they intend to
seek a new trial on the issues of damages and infringement. A hearing is
tentatively scheduled for September 2001 to argue the defendants' Motion to Stay
and Motion for a Trial on royalty and infringement. Additionally, in May 2001
the U.S. Patent Office granted the defendants' petition to reexamine the
validity of Unocal's patent.

If Unocal's patent ultimately is upheld, the company's financial exposure
includes royalties, plus interest, for production of gasoline that is proven to
have infringed the patent. As a result of the March 2000 ruling, the company
recorded in the first quarter 2000 an after-tax charge of $62 million. The
majority of this charge pertained to the estimated royalty on gasoline
production in the earlier part of a four-year period ending December 31, 1999,
before Chevron modified its manufacturing processes to minimize the production
of gasoline that allegedly infringed on Unocal's patented formulations.
Subsequently, the company has been accruing in the normal course of business any
future estimated liability for potential infringement of the patent covered by
the trial court's ruling. In June 2000, Chevron paid $22.7 million to Unocal -
$17.2 million for the original court judgement for California gasoline produced
in violation of Unocal's patent from March through July 1996 and $5.5 million of
interest and fees.

Unocal has obtained additional patents for alternate formulations that could
affect a larger share of U.S. gasoline production. Chevron believes these
additional patents are invalid and unenforceable. However, if


                                      -16-


such patents are ultimately upheld, the competitive and financial effects on the
company's  refining and marketing  operations,  while presently  indeterminable,
could be material.

Another issue involving the company is the ongoing public debate concerning the
petroleum industry's use of MTBE and its potential environmental impact through
seepage into groundwater. Along with other oil companies, the company is a party
to lawsuits and claims related to the use of the chemical MTBE in certain
oxygenated gasolines. These actions may require the company to correct or
ameliorate the alleged effects on the environment of prior release of MTBE by
the company or other parties. Additional lawsuits and claims related to the use
of MTBE may be filed in the future. Costs to the company related to these
lawsuits and claims are not currently determinable. Chevron has eliminated the
use of MTBE in gasoline it sells in certain areas.

The company's U.S. federal income tax have been settled through 1993. The
company's California franchise tax liabilities have been settled through 1991.

Settlement of open tax years, as well as tax issues in other countries where the
company conducts its businesses, is not expected to have a material effect on
the consolidated financial position or liquidity of the company and, in the
opinion of management, adequate provision has been made for income and franchise
taxes for all years under examination or subject to future examination.

The company and its subsidiaries have certain other contingent liabilities with
respect to guarantees, direct or indirect, of debt of affiliated companies or
others and long-term unconditional purchase obligations and commitments,
throughput agreements and take-or-pay agreements, some of which relate to
suppliers' financing arrangements.

The company is subject to loss contingencies pursuant to environmental laws and
regulations that in the future may require the company to take action to correct
or ameliorate the effects on the environment of prior release of chemical or
petroleum substances, including MTBE, by the company or other parties. Such
contingencies may exist for various sites including, but not limited to:
Superfund sites and refineries, oil fields, service stations, terminals, and
land development areas, whether operating, closed or sold. The amount of such
future cost is indeterminable due to such factors as the unknown magnitude of
possible contamination, the unknown timing and extent of the corrective actions
that may be required, the determination of the company's liability in proportion
to other responsible parties, and the extent to which such costs are recoverable
from third parties. While the company has provided for known environmental
obligations that are probable and reasonably estimable, the amount of future
costs may be material to results of operations in the period in which they are
recognized. The company does not expect these costs to have a material effect on
its consolidated financial position or liquidity. Also, the company does not
believe its obligations to make such expenditures have had, or will have, any
significant impact on the company's competitive position relative to other U.S.
or international petroleum or chemical concerns.

The company believes it has no material market or credit risk to its operations,
financial position or liquidity as a result of its commodities and other
derivatives activities. However, the results of operations and financial
position of certain equity affiliates may be affected by their business
activities involving the use of derivative instruments.

The company's operations, particularly oil and gas exploration and production,
can be affected by changing economic, regulatory and political environments in
the various countries, including the United States, in which it operates. In
certain locations, host governments have imposed restrictions, controls and
taxes, and, in others, political conditions have existed that may threaten the
safety of employees and the company's continued presence in those countries.
Internal unrest or strained relations between a host government and the company
or other governments may affect the company's operations. Those developments
have, at times, significantly affected the company's operations and related
results, and are carefully considered by management when evaluating the level of
current and future activity in such countries.



                                      -17-


For oil and gas producing operations, ownership agreements may provide for
periodic reassessments of equity interests in estimated oil and gas reserves.
These activities, individually or together, may result in gains or losses that
could be material to earnings in any given period. One such equity
redetermination process has been under way since 1996 for Chevron's interests in
four producing zones at the Naval Petroleum Reserve at Elk Hills in California,
for the time when the remaining interests in these zones were owned by the U.S.
Department of Energy (DOE). A wide range remains for a possible net settlement
amount for the four zones. Chevron currently estimates its maximum possible net
before-tax liability at less than $400 million. At the same time, a possible
maximum net amount that could be owed to Chevron is estimated at more than $200
million. The timing of the settlement and the exact amount within this range of
estimates are uncertain.

Areas in which the company has significant operations include the United States
of America, Canada, Australia, the United Kingdom, Norway, Republic of Congo,
Angola, Nigeria, Chad, Equatorial Guinea, Democratic Republic of Congo, Papua
New Guinea, China, Venezuela, Thailand, Argentina and Brazil. The company's
Caltex affiliates have significant operations in Indonesia, Korea, Australia,
Thailand, the Philippines, Singapore, and South Africa. The company's
Tengizchevroil affiliate operates in Kazakhstan. The company's Chevron Phillips
Chemical Company affiliate manufactures and markets a wide range of
petrochemicals and plastics on a worldwide basis, with manufacturing facilities
in existence or under construction in the United States, Puerto Rico, Singapore,
China, South Korea, Saudi Arabia, Qatar, Mexico and Belgium. The company's
Dynegy affiliate has operations in the United States of America, Canada, the
United Kingdom and other European countries.

Chevron receives claims from and submits claims to customers, trading partners,
host governments, contractors, insurers and suppliers. The amounts of these
claims, individually and in the aggregate, may be significant and take lengthy
periods to resolve. The company also suspends the costs of exploratory wells
pending a final determination of the commercial potential of the related oil and
gas fields. The ultimate disposition of these well costs is dependent on the
results of future drilling activity and/or development decisions. If the company
decides not to continue development, the costs of these wells are expensed. The
company and its affiliates also continue to review and analyze their operations
and may close, abandon, sell, exchange, acquire or restructure assets to achieve
operational or strategic benefits and to improve competitiveness and
profitability. These activities, individually or together, may result in gains
or losses in future periods.

Review of Operations
--------------------
Second quarter 2001 revenues and other income of $13.0 billion were slightly
lower than $13.2 billion in the 2000 second quarter. Total revenues and other
income for the first half of 2001 were $25.3 billion, compared with $25.0
billion in 2000. Revenues and other income from worldwide upstream operations
increased about 9 percent in the second quarter, primarily on sharply higher
sales prices and volumes of natural gas prices and higher production of crude
oil. Downstream revenues and other income were also slightly higher - the result
of higher prices for refined petroleum products. These increases were
essentially offset by the absence of sales revenues for most of Chevron's former
petrochemicals business, following the July 1, 2000, formation of the Chevron
Phillips Chemical Co. joint venture, which is accounted for under the equity
method.

Improved operating earnings boosted the company's average return on capital
employed for the 12 months ending June 30, 2001, to 23 percent.

Total operating expenses (operating, selling, general and administrative
expenses) in the second quarter of 2001 were $1.7 billion, excluding special
items, about flat with last year's second quarter. For the six-month period,
total operating expenses, excluding special items, were $3.3 billion, compared
with $3.2 billion in last year's first half.

Depreciation, depletion and amortization (DD&A) expense of $690 million in the
second quarter of 2001, compared with $699 million in the 2000 quarter. For the
six-month period, DD&A expense of $1.372 billion was $22 million higher than in
the first half of 2000. Higher depreciation expenses in worldwide upstream due
to increased production levels were nearly offset by the absence of depreciation
from the



                                      -18-


assets  contributed  by Chevron to the  formation of Chevron  Phillips  Chemical
Company  in July  2000.  There  were no  special-item  effects on DD&A in either
period.

Taxes on income for the second quarter and first half of 2001 were $1.115
billion and $2.163 billion, respectively, compared with $1.018 billion and
$1.823 billion for the comparable periods in 2000. The effective tax rates were
43 percent and 46 percent for the first half of 2001 and 2000, respectively. The
decrease in the effective tax rate was primarily the result of a shift in
international before-tax income from countries with higher income tax rates to
countries with lower income tax rates. Partially offsetting this decrease were
higher state taxes, higher prior-year tax adjustments, and lower equity
affiliates' earnings as a proportion of before-tax income.

Foreign currency losses included in second quarter 2001 net income were $27
million compared with gains of $29 million in 2000. The U.S. dollar weakened
against a number of currencies in the second quarter of 2001, primarily the
Canadian and Australian dollars. For the six-month periods, foreign currency
gains were $44 million in 2001, compared with gains of $75 million in 2000.

The following table details the company's after-tax net income by major
operating area.



NET INCOME BY MAJOR OPERATING AREA

                                                              Three Months Ended          Six Months Ended
                                                                         June 30                   June 30
                                                  ------------------------------  ------------------------
Millions of Dollars                                          2001           2000          2001        2000
----------------------------------------------------------------------------------------------------------
                                                                                        
Exploration and Production
    United States                                          $  446         $  388        $1,166      $  753
    International                                             557            580         1,246       1,233
----------------------------------------------------------------------------------------------------------
Total Exploration and Production                            1,003            968         2,412       1,986
----------------------------------------------------------------------------------------------------------
Refining, Marketing and Transportation
    United States                                             327            167           468         160
    International                                              49             20           196          29
----------------------------------------------------------------------------------------------------------
Total Refining, Marketing and Transportation                  376            187           664         189
----------------------------------------------------------------------------------------------------------
Chemicals                                                      27             51            (9)        119
All Other *                                                   (82)           (90)         (143)       (134)
----------------------------------------------------------------------------------------------------------
    Net Income                                             $1,324         $1,116        $2,924      $2,160
----------------------------------------------------------------------------------------------------------


*   Includes coal-mining operations, the company's ownership in Dynegy Inc.,
    worldwide cash management and debt financing activities, corporate
    administrative costs, marketable securities, corporate center costs,
    insurance operations, real estate activities and certain e-businesses.




U.S. Exploration and Production
-------------------------------


                             Three Months Ended          Six Months Ended
                                        June 30                   June 30
                           --------------------        ------------------
Millions of Dollars         2001           2000          2001        2000
-------------------------------------------------------------------------
                                                         
Operating Earnings          $446           $388        $1,166        $753
Special Items                  -              -             -           -
-------------------------------------------------------------------------
    Segment Income          $446           $388        $1,166        $753
-------------------------------------------------------------------------


U.S. exploration and production operating earnings of $446 million increased 15
percent in the 2001 second quarter on higher natural gas realizations, offset
partially by higher operating expenses - primarily fuel costs - and exploration
expenses. On a year-to-date basis, earnings of $1,166 million increased 55
percent.

The second quarter average natural gas realization was $5.52 per thousand cubic
feet, compared with $3.35 in the year-ago period. Average natural gas
realization for the first half of 2001 was $6.57 per thousand cubic feet, more
than double the $2.87 in the year-ago period. The average crude oil realization
of $23.87


                                      -19-


per barrel in the  second  quarter  and $24.18 for the 2001 six months  declined
about 6 percent from the comparable prior year periods.

Net oil-equivalent production increased about 1 percent from the 2000 second
quarter and year-to-date periods. Second quarter net natural gas production
averaged 1.529 billion cubic feet per day, up 2 percent from the 2000 period and
1.567 billion cubic feet per day in the first half of 2001, up 4 percent from
the 2000 period. Net liquids production increased slightly to 312,000 barrels
per day in the second quarter. Well workovers and development drilling projects
resulted in new and enhanced production - mainly in the shallow-water shelf area
of the Gulf of Mexico - more than offsetting the effects of asset sales and
normal field declines. Liquids production was down marginally for the six
months.

International Exploration and Production
----------------------------------------


                                                              Three Months Ended          Six Months Ended
                                                                         June 30                   June 30
                                                         -----------------------      --------------------
Millions of Dollars                                          2001           2000          2001        2000
----------------------------------------------------------------------------------------------------------
                                                                                        
Operating Earnings*                                          $557           $580        $1,246      $1,233
Special Items                                                   -              -             -           -
----------------------------------------------------------------------------------------------------------
    Segment Income*                                          $557           $580        $1,246      $1,233
----------------------------------------------------------------------------------------------------------


*  Includes Foreign Currency (Losses) Gains                  $(27)           $21           $22         $49



International exploration and production quarterly earnings of $557 million in
the second quarter declined about 4 percent, mainly the result of a $48 million
well write-off in Azerbaijan. Otherwise, earnings improved with higher liftings
of liquids and marginally higher realizations for both liquids and natural gas.
In the first half of 2001, earnings increased about 1 percent compared with last
year's first half results.

International net oil-equivalent production in the 2001 second quarter and year
to date rose about 4 percent from the year-ago periods. Net liquids production
was 3 percent higher versus the 2000 quarter to 869,000 barrels per day,
primarily the result of higher production in Kazakhstan. Net natural gas
production increased 9 percent to 994 million cubic feet per day as a result of
higher production in Kazakhstan, Canada and Argentina. These production
increases were partially offset by declines in natural gas production in Nigeria
and the United Kingdom.

On a year-to-date basis, net liquids production was 869,000 barrels per day
compared with 843,000 last year, primarily the result of higher production in
Kazakhstan, Argentina and Nigeria. These increases were partially offset by
declines in several countries, including Indonesia, Canada and the United
Kingdom. Net natural gas production increased 11 percent to 1.0 billion cubic
feet per day as a result of higher production in Kazakhstan and Canada. These
production increases were partially offset by declines in natural gas production
in Nigeria and the United Kingdom.

Earnings for the second quarter included net foreign currency losses of $27
million, compared with gains of $21 million in 2000. The losses in the second
quarter 2001 primarily reflected weakening of the U.S. dollar relative to
Australian and Canadian dollars. For the six-month periods, foreign currency
gains were $22 million in 2001, compared with gains of $49 million in 2000.


                                      -20-


U.S. Refining, Marketing and Transportation
-------------------------------------------



                               Three Months Ended          Six Months Ended
                                          June 30                   June 30
                            ---------------------        ------------------
Millions of Dollars           2001           2000          2001        2000
---------------------------------------------------------------------------
                                                           
Operating Earnings            $327           $167          $468        $222
Special Items                    -              -             -         (62)
---------------------------------------------------------------------------
    Segment Income            $327           $167          $468        $160
---------------------------------------------------------------------------


Operating earnings for the second quarter and first half of 2001 were $327
million and $468 million respectively, up significantly from the corresponding
2000 periods. In the first half of 2000, net income included special charges of
$62 million for a patent litigation matter recorded in the first quarter.

The average refined product sales realization increased about 6 percent from the
year-ago quarter to $39.95 per barrel. In the first half of 2001, the average
sales realization was $39.03 compared with $37.08 last year. Significantly
higher sales margins complemented higher volumes for refined products. Operating
expenses increased primarily due to the higher cost of fuel used in the refining
process.

Refined product sales volumes increased about 2 percent to 1,409,000 barrels per
day in the second quarter and about 4 percent to 1,348,000 barrels per day for
the first half of 2001. Higher value branded gasoline sales increased about 5
percent to 568,000 barrels per day in the second quarter, and to 555,000 barrels
per day year to date.

International Refining, Marketing and Transportation
----------------------------------------------------


                                                              Three Months Ended          Six Months Ended
                                                                         June 30                   June 30
                                                          ----------------------       -------------------
Millions of Dollars                                          2001           2000          2001        2000
----------------------------------------------------------------------------------------------------------
                                                                                           
Operating Earnings*                                           $49            $20          $196         $29
Special Items                                                   -              -             -           -
----------------------------------------------------------------------------------------------------------
    Segment Income*                                           $49            $20          $196         $29
----------------------------------------------------------------------------------------------------------


*  Includes Foreign Currency (Losses) Gains                   $(5)           $14           $28         $34



International refining, marketing and transportation is composed primarily of
Chevron's interest in Caltex Corporation, the Canadian downstream company and
international shipping operations. Earnings for these businesses of $49 million
in this year's second quarter and $196 million for the first six months
increased significantly from $20 million and $29 million for the same periods
last year. The increase was primarily from improved earnings for the shipping
business. Revenues from higher freight rates and lower operating expenses
accounted for the earnings increase.

Chevron's share of Caltex losses, adjusted to exclude foreign currency effects,
was $12 million in the second quarter - slightly higher than the year-ago
period. Lower refining margins and a prior-year tax adjustment combined to
offset the benefit of an increase in refined product marketing sales. Adjusted
earnings for the first six months of 2001 were $6 million, compared with losses
of $33 million in 2000. In the 2000 period, a rapid rise in crude oil costs
could not be immediately recovered in the marketplace due to competitive
pressures. The 2001 period benefited from more favorable conditions during the
first quarter when feedstock costs were more stable and refined products margins
increased. The Asia-Pacific market continues to suffer from excess supply
conditions for refined products, limiting the company's ability to raise prices
to recover costs and improve margins.

Chevron's total international downstream sales volumes increased 11 percent from
the 2000 second quarter to 823,000 barrels per day and 8 percent in the first
half to 813,000 barrels per day. The company's share of an affiliate's sales of
residual fuels and marine lubes accounted for most of the increase in both
periods.

                                      -21-


Chemicals
---------


                                                              Three Months Ended          Six Months Ended
                                                                         June 30                   June 30
                                                          ----------------------        ------------------
Millions of Dollars                                          2001           2000          2001        2000
----------------------------------------------------------------------------------------------------------
                                                                                          
Operating Earnings (Losses)*                                  $27            $51           $(9)       $119
Special Items                                                   -              -             -           -
----------------------------------------------------------------------------------------------------------
    Segment Income (Loss)*                                    $27            $51           $(9)       $119
----------------------------------------------------------------------------------------------------------

*  Includes Foreign Currency Losses                           $(1)           $(2)          $(5)        $(2)



Operating earnings were $27 million for chemical operations in this year's
second quarter, down $24 million from last year's second quarter - the result of
lower earnings by the 50 percent-owned affiliate, Chevron Phillips Chemical
Company LLC. Deterioration of this affiliate's product sales margins, lower
sales volumes and interest expense on the affiliate's debt more than offset the
benefit in the second quarter of 2001 from business interruption insurance for
an incident that occurred in early 2000. On a year-to-date basis, chemicals
operations posted a loss of $9 million compared with earnings of $119 million a
year ago. Demand continues to be weak because of the slowing U.S. economy while
prices are restrained by worldwide industry over-capacity and the strong U.S.
dollar.

All Other
---------


                                                              Three Months Ended          Six Months Ended
                                                                         June 30                   June 30
                                                            --------------------        ------------------
Millions of Dollars                                          2001           2000          2001        2000
----------------------------------------------------------------------------------------------------------
                                                                                         
Net Operating Charges*                                       $(22)          $(65)        $ (83)      $(109)
Special Items                                                 (60)           (25)          (60)        (25)
----------------------------------------------------------------------------------------------------------
    Net Charges*                                             $(82)          $(90)       $ (143)      $(134)
----------------------------------------------------------------------------------------------------------

*  Includes Foreign Currency Gains (Losses)                    $6            $(4)          $(1)        $(6)



All Other activities include coal-mining operations, the company's ownership
interest in Dynegy Inc., worldwide cash management and debt financing
activities, corporate administrative costs, insurance operations, real estate
activities and certain e-businesses. Results in this year's second quarter and
six months included special charges of $60 million for prior-year tax
adjustments and expenses associated with the pending merger with Texaco.
Prior-year tax adjustments increased net charges by $25 million in the 2000
second quarter and six months.

Chevron's share of Dynegy's operating earnings increased $21 million to $35
million in the second quarter and doubled to $69 million for the first six
months of 2001 on the strength of Dynegy's core energy marketing and trading
business.

The company's coal operations had earnings of $7 million in the second quarter
of 2001, compared with an operating loss of $2 million in last year's second
quarter. Six-month operating earnings were $13 million in 2001, up from $1
million last year. The improvement was due to higher sales volumes this year and
the absence of the negative effects of last year's union work stoppages at two
of the company's mines that began in May and did not end until early August last
year.

Net operating charges from other activities were $64 million in the second
quarter and $165 million for the first six months of 2001, compared with $77
million and $143 million in the comparable 2000 periods. In the second quarter,
favorable effects of lower interest expense and higher interest income more than
offset increases in other corporate charges. For the six-month periods,
increases in other corporate charges, including merger-related expenses,
exceeded the favorable effect of lower net interest expense.

Liquidity and Capital Resources
-------------------------------
Cash and cash equivalents totaled $2.895 billion at June 30, 2001 - about a $1
billion increase from year-end 2000. Cash provided by operating activities was
$4.855 billion in the first half of 2001, up $1.017 billion from the
corresponding 2000 period. Capital expenditures and dividend payments to
stockholders


                                      -22-


totaled  $3.168  billion in the first half of 2001.  Cash  provided by operating
activities  in 2001  benefited  from the  significantly  higher  natural gas and
refined product prices and higher OEG production volumes.

Total debt and capital lease obligations were $6.709 billion at June 30, 2000,
an increase of $477 million from year-end 2000. A net increase of about $925
million in short-term debt (excluding the current portion of long-term debt due
within 12 months) was partially offset by a decrease of about $430 million in
long-term debt (including the current portion of long-term debt due within 12
months). These transactions included a non-cash reduction of $100 million of
ESOP debt, a scheduled repayment of $90 million of other long-term debt, and, in
February 2001, the repurchase of $235 million of 7.45 percent notes due 2004.
Redemption notices were issued for the remaining $115 million of 7.45 percent
notes with a call date of August 15, 2001. The company's debt ratio (total debt
to total-debt-plus-equity) was 23.2 percent at June 30, 2001, down from 23.8
percent at year-end 2000. The company continually monitors its spending levels,
market conditions and related interest rates to maintain what it perceives to be
reasonable debt levels.

In order to allow Chevron to maintain active relationships with institutional
investors in its commercial paper, the company continues a program instituted in
2000 under which it sells commercial paper and reinvests the borrowed funds in
money market instruments with similar terms. As a result of this program, net
commercial paper borrowings in the first half of 2001 and net purchases of
short-term investments rose $666 million from year-end 2000 levels.

In the second quarter 2001, Chevron loaned $418 million to Caltex Corporation,
and its subsidiaries, for the purpose of replacing some of Caltex's existing
bank financing. These loans bear interest at market-based floating rates.

At June 30, 2001, Chevron had $3.2 billion in committed credit facilities with
various major banks, $2.725 billion of which had termination dates beyond one
year. These facilities support commercial paper borrowing and also can be used
for general requirements. No borrowings were outstanding under these facilities
at June 30, 2001.

The company benefits from lower interest rates available on short-term debt;
however, Chevron's proportionately large amount of short-term debt keeps its
ratio of current assets to current liabilities at relatively low levels. The
current ratio was 1.09 at June 30, 2001, up slightly from December 31, 2000. The
company's short-term debt, consisting primarily of commercial paper and the
current portion of long-term debt, totaled $4.799 billion at June 30, 2001.
Short-term debt of $2.725 billion was reclassified to long-term debt because
settlement of these obligations is not expected to require the use of working
capital during the next twelve months. The company has the intent and the
ability, as evidenced by committed credit arrangements, to refinance its
short-term debt on a long-term basis. The company's practice has been to
continually refinance its commercial paper, maintaining levels it believes to be
appropriate.

The company's future debt level is dependent primarily on its results of
operations and capital-spending program. The company believes it has substantial
borrowing capacity to meet unanticipated cash requirements. The company's senior
debt is rated AA by Standard & Poor's Corporation, and Aa2 by Moody's Investors
Service. Chevron's U.S. commercial paper is rated A-1+ by Standard & Poor's and
Prime-1 by Moody's, and Chevron's Canadian commercial paper is rated R-1
(middle) by Dominion Bond Rating Service. Moody's counterparty rating for
Chevron is also Aa2. All of these ratings denote high quality, investment-grade
securities.

In December 1997, Chevron's Board of Directors approved the repurchase of up to
$2 billion of its outstanding common stock, providing shares for use in its
employee stock option programs. Prior to suspending the program in October 2000
upon announcement of the merger agreement with Texaco, Chevron had repurchased
23.3 million shares at a cost of $1.890 billion.

On July 25, 2001, Chevron declared a quarterly dividend of 65 cents per share,
unchanged from the preceding quarter.

                                      -23-


Worldwide capital and exploratory expenditures for the first half of 2001,
including the company's share of affiliates' expenditures, were $3.325 billion,
compared with $2.448 billion in the first half of 2000. Expenditures for
international exploration and production projects were $1.589 billion, or 48
percent of total expenditures, reflecting the company's continued emphasis on
increasing international oil and gas production. In the first half of 2001,
expenditures included the acquisition of an additional 5 percent interest in the
Tengizchevroil affiliate. Expenditures for the first half of 2000 included an
additional investment of about $300 million in Dynegy Inc.



                         CAPITAL AND EXPLORATORY EXPENDITURES BY MAJOR OPERATING AREA

                                                             Three Months Ended          Six Months Ended
                                                                         June 30                  June 30
                                                       -------------------------    ---------------------
Millions of Dollars                                           2001          2000        2001         2000
---------------------------------------------------------------------------------------------------------
                                                                                       
United States
     Exploration and Production                             $  369        $  352       $  738      $  562
     Refining, Marketing and Transportation                    106            94          200         175
     Chemicals                                                  54            42           66          65
     All Other                                                  90           182          458*        483
                                                       --------------------------------------------------
Total United States                                            619           670        1,462       1,285
                                                       --------------------------------------------------

International
     Exploration and Production                                533           442        1,589         898
     Refining, Marketing and Transportation                    147           128          262         236
     Chemicals                                                   8            13           12          29
                                                       --------------------------------------------------
Total International                                            688           583        1,863       1,163
                                                       --------------------------------------------------
Worldwide                                                   $1,307        $1,253       $3,325      $2,448
                                                       --------------------------------------------------

*  Includes restatement for an additional $282 million of affiliate expenditures
   not included in the first quarter report.



                                      -24-





                          SELECTED OPERATING DATA (1),(2)

                                                                Three Months Ended         Six Months Ended
                                                                           June 30                  June 30
                                                             ---------------------    ---------------------
                                                                   2001       2000        2001         2000
-----------------------------------------------------------------------------------------------------------
                                                                                           
U.S. Exploration and Production
    Net Crude Oil and Natural Gas Liquids Production (MBPD)         312        309         305          308
    Net Natural Gas Production (MMCFPD)                           1,529      1,506       1,567        1,512
    Sales of Natural Gas (MMCFPD)                                 3,492      3,353       3,565        3,342
    Sales of Natural Gas Liquids (MBPD)                             161        160         174          137
    Revenue from Net Production
       Crude Oil ($/Bbl.)                                        $23.87     $25.39      $24.18       $25.79
       Natural Gas ($/MCF)                                       $ 5.52     $ 3.35      $ 6.57       $ 2.87

International Exploration and Production
    Net Crude Oil and Natural Gas Liquids Production (MBPD)         869        841         869          843
    Net Natural Gas Production (MMCFPD)                             994        913       1,010          914
    Sales of Natural Gas (MMCFPD)                                 1,742      1,801       1,732        1,926
    Sales of Natural Gas Liquids (MBPD)                              68         57          66           63
    Revenue from Liftings
       Liquids ($/Bbl.)                                          $25.99     $25.93      $25.22       $25.84
       Natural Gas ($/MCF)                                       $ 2.70     $ 2.21      $ 2.89       $ 2.22
    Other Produced Volumes (MBPD) (3)                               104        141         108          127

U.S. Refining, Marketing and Transportation
    Sales of Gasoline (MBPD) (4)                                    722        729         693          687
    Sales of Other Refined Products (MBPD)                          687        653         655          610
    Refinery Input (MBPD)                                         1,009      1,021         952          919
    Average Refined Product Sales Price ($/Bbl.)                 $39.95     $37.65      $39.03       $37.08

International Refining, Marketing and Transportation
    Sales of Refined Products (MBPD) (5)                            823        741         813          756
    Refinery Input (MBPD)                                           409        416         411          407

------------------------------------------------------------------------------------------------------------------

(1)  Includes equity in affiliates.
(2)  MBPD = thousand barrels per day; MMCFPD = million cubic feet per day; Bbl. = barrel; MCF =  thousand cubic
     feet
(3)  Represents total field production under the Boscan operating service
     agreement in Venezuela, and other operating service agreements.
(4)  Includes branded and unbranded gasoline.
(5)  2000 amounts restated.



                                      -25-


                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

A.    Richmond Refinery - Resolution of Outstanding Notices of Violation
The Company has entered into a Settlement Agreement with the Bay Area Air
Quality Management District with respect to 52 Notices of Violation issued
between 1998 and 2001 to the Company's Richmond Refinery. The alleged violations
involve various District regulations and permit conditions applicable to the
Refinery. The Company has agreed under the Settlement Agreement to pay a penalty
of $300,000 and has agreed to surrender ten tons per year of emission reduction
credits for precursor organic compound/volatile organic compound emissions.

Item 4.  Submission of Matters to a Vote of Security Holders

The following matters were submitted to a vote of stockholders at the Annual
Meeting on April 25, 2001.

Voters elected nine incumbent directors for one-year terms. The vote tabulation
for individual directors was:


                       Shares                                Shares
 Directors              For                                Withheld
 ------------------------------------------------------------------
 S. H. Armacost        520,649,834                        6,077,734
 S. L. Ginn            521,658,043                        5,069,525
 C. A. Hills           521,147,997                        5,579,571
 J. B. Johnston        521,013,884                        5,713,684
 R. H. Matzke          521,066,635                        5,660,933
 D. J. O'Reilly        521,822,139                        4,905,429
 F. A. Shrontz         521,370,608                        5,356,960
 C. Ware               520,967,009                        5,760,559
 J. A. Young           521,446,364                        5,281,204

Voters approved amending Chevron's Restated Certificate of Incorporation to
increase the number of authorized shares of Common Stock from two billion shares
of $.75 par value to four billion shares of $.75 par value, subject to
stockholder approval and consummation of the merger of Chevron and Texaco, by a
vote of 508,437,679 (97.3 percent) for and 14,297,258 (2.7 percent) against.
There were also 3,989,937 abstentions and 2,694 broker non-votes.

Voters approved the appointment of PricewaterhouseCoopers LLP as the company's
independent accountants by a vote of 505,470,681 (96.6 percent) for and
17,567,712 (3.4 percent) against. There were also 3,689,184 abstentions.

A stockholder proposal to eliminate Bioaccumulative Halogenated Pollutants at
the company's facilities was rejected. There were 31,855,549 votes (7.5 percent)
for the proposal and 391,173,462 votes (92.5 percent) against. There were also
18,534,418 abstentions and 85,164,139 broker non-votes.

A stockholder proposal to report on potential environmental damage to the Arctic
National Wildlife Refuge was rejected. There were 43,440,369 votes (10.3
percent) for the proposal and 376,787,481 votes (89.7 percent) against. There
were also 21,341,873 abstentions and 85,157,845 broker non-votes.

A stockholder proposal to report on greenhouse gas emissions was rejected. There
were 40,271,902 votes (9.6 percent) for the proposal and 378,189,863 votes (90.4
percent) against. There were also 23,103,467 abstentions and 85,162,336 broker
non-votes.


                                      -26-







Item 6. Exhibits and Reports on Form 8-K

(a)   Exhibits

      (4)    Pursuant to the Instructions to Exhibits, certain instruments
             defining the rights of holders of long-term debt securities of the
             company and its consolidated subsidiaries are not filed because the
             total amount of securities authorized under any such instrument
             does not exceed 10 percent of the total assets of the company and
             its subsidiaries on a consolidated basis. A copy of any such
             instrument will be furnished to the Commission upon request.

      (12)   Computation of Ratio of Earnings to Fixed Charges

(b)   Reports on Form 8-K

      None


                                    SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                               CHEVRON CORPORATION
                                     -------------------------------------------
                                                   (Registrant)




Date         August 9, 2001                     /s/ S.J. Crowe
      -------------------------      -------------------------------------------
                                     S. J. Crowe, Vice President and Comptroller
                                        (Principal Accounting Officer and
                                            Duly Authorized Officer)



                                      -27-