Risk factor changes · CVX

What changed in Chevron's risk factors

Item 1A (Risk Factors) of Chevron's FY2025 10-K compared with its FY2024 10-K, sentence by sentence.

Newer: 10-K filed 2026-02-24 · Older: 10-K filed 2025-02-21

New in the latest 10-K 12

• The following disclosures reflect our beliefs and opinions as to factors that could materially and adversely affect us in the future.
• References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.
• Chevron is incorporating artificial intelligence technologies into its processes and these technologies may present business, compliance, and reputational risks The company is increasingly utilizing artificial intelligence ( AI ) technologies in certain of its processes, information systems and various operations, and expects that AI will assume a more critical role in its operations over time.
• The use of AI technologies introduces certain risks to the company, including potential dependency on biased or incorrect AI outputs, new or enhanced regulatory requirements, litigation, privacy risks, cybersecurity risks, reputational harm, liability or other adverse consequences, any of which could adversely affect its business, financial condition and results of operations.
• Additionally, other unforeseen risks stemming from either the company s or third-party service providers use and development of AI tools and technologies, or the company s inability to adopt such technologies at the same pace as its competitors, may arise in the future that could adversely affect its business and results of operations.
• Our control of the general partner of Hess Midstream may increase the possibility that we could be subject to claims of breach of duties owed to Hess Midstream, including claims of conflict of interest.
• Any liability resulting from such claims could have an adverse impact on our future business, financial condition, results of operations and cash flows.
• Many of these actions, as well as customers and consumers preferences and use of the company s products or substitute products, and actions taken by the company s competitors in response to legislation and regulations, are beyond the company s control.
• In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters, including climate change and climate-related risks (including entities commonly referred to as raters and rankers ).
• Chevron regularly evaluates its ambitions.
• (3) successful generation, acquisition, retirement and accounting of cost-effective, verifiable carbon offsets from nature-based solutions or carbon capture and storage;
• (5) evolving regulatory requirements affecting ESG standards or disclosures;

Reworded 25

Removed words are struck through; added words are highlighted.

• As a global energy company, Chevron is subject to a variety of risks that could materially impact the company s results of operations and financial condition. risks.
• The most significant factor that affects the company s results of operations are the prices of crude oil, natural gas, and natural gas liquids, which can be influenced by general economic conditions and level of economic 20 Table of Contents growth, including low or negative growth; industry production and inventory levels; technology advancements, including those in pursuit of a lower carbon economy; production quotas or other actions that might be imposed by the Organization of Petroleum Exporting Countries or other producers; weather-related damage and disruptions due to other natural or human causes beyond our control; competing fuel prices; geopolitical risks; the pace of energy transition; customer and 21 Table of Contents consumer preferences and the use of substitutes; and governmental regulations, policies and other actions regarding the development of oil and gas reserves, as well as greenhouse gas emissions and climate change.
• Extended periods of low prices or demand for crude oil, natural gas, and natural gas liquids can have had, and in the future can have, a material adverse impact on the company s results of operations, financial condition and liquidity.
• The company may be unable to realize anticipated cost savings, expenditure reductions and asset sales that are intended to compensate for such downturns, and such downturns may also slow the pace and scale at which we are able to invest in our business, including our Chevron New Energies organization. businesses.
• The company s operations are therefore subject to disruption from natural or human causes beyond its control, including risks from hurricanes, severe storms, floods, heat waves, and other forms of severe weather; wildfires; ambient temperature increases; sea level rise; war or other military conflicts such as the conflict in the Middle East and the military conflict between Russia and Ukraine; Ukraine and in the Middle East; accidents; civil unrest; political events; events such as current geopolitical tensions in Venezuela; fires; earthquakes; system failures; cyber threats; terrorist acts; and epidemic or pandemic diseases, some of which may be impacted by climate change and any of which could result in suspension of operations or harm to people or the natural environment.
• The cyber risk landscape changes over time due to a variety of internal and external factors, 21 Table of Contents including during organizational changes, relocating work to international geographies, or other corporate transactions; political tensions; war or other military conflicts; or civil unrest.
• Although Chevron devotes significant resources to prevent unwanted intrusions and to protect its systems and data, whether such data is housed internally or by external third parties, the company has experienced and will continue to experience cyber incidents of varying degrees in the conduct of its 22 Table of Contents business.
• Acquisitions The acquisition of Hess may cause Chevron s financial results to differ from the company s expectations or the expectations of the investment community, the company may not achieve the anticipated benefits of the acquisition, and the acquisition may disrupt the company s current plans or operations The success of the pending acquisition of Hess Hess, which closed in July 2025, will depend, in part, on Chevron s ability to successfully integrate the business of Hess and realize the anticipated benefits, including synergies. the anticipated run-rate cost synergies, estimated five-year production and free cash flow growth rates, and anticipated higher returns to shareholders over the long-term.
• Difficulties in integrating Hess may result in the failure Failure to realize anticipated synergies in the expected timeframes, in timeframe, operational challenges, and in the diversion of management s attention from ongoing business concerns, as well as in and unforeseen expenses associated with the acquisition, which acquisition may have an adverse impact on the company s our financial results. 23 Table of Contents One of our subsidiaries acts as the general partner of a publicly traded limited partnership, Hess Midstream LP, which may involve a potential legal liability One of our subsidiaries acts as the general partner of Hess Midstream, a publicly traded limited partnership.
• In addition, to the extent that societal pressures or political or other factors are involved, it It is also possible that such liability could be imposed without regard to the company s causation of or contribution to the asserted damage, or to other mitigating factors.
• In a number of locations, including the European Union, governments have proposed or imposed restrictions on direct and indirect obligations with respect to the company s operations, activities, trade, currency exchange controls, burdensome taxes, and public disclosure requirements disclosures, as well as currency exchange controls that might harm the company s competitiveness, return on investments, or relations with other governments or third parties.
• In addition, litigation or changes in national, state or local environmental regulations or laws, including those 23 Table of Contents designed to stop or impede the development or production of oil and gas, such as those related to the use of hydraulic fracturing or bans on drilling, or any law or regulation that impacts the demand for our products, could adversely affect the company s current or anticipated future operations and profitability.
• The imposition of, or increase in, such windfall profit taxes could adversely affect the company s current or anticipated future operations and profitability. 24 Table of Contents For information concerning the company s tax liabilities, see Note 17 Taxes and Note 24 Other Contingencies and Commitments .
• Many of these actions, as well as customers and consumers preferences and use of the company s products or substitute products, and actions taken by the company s competitors in response to legislation and regulations, are beyond the company s control. 24 Table of Contents Similar to any significant changes in the regulatory environment, climate change-related legislation, regulation, or other government actions may curtail profitability, as well as render the extraction of the company s hydrocarbon resources economically infeasible.
• Further, the ultimate impact of GHG emissions and climate change-related agreements, legislation, regulation, and government actions on the company s financial performance is highly uncertain because the company is unable to predict with certainty, for a multitude of individual jurisdictions, the outcome of political decision-making processes and 25 Table of Contents legal challenges, including the actual laws and regulations enacted, the variables and trade-offs that inevitably occur in connection with such processes, and market conditions, including the responses of consumers to such changes.
• For example, increasing trends in attention to ESG matters, including climate change, has have resulted and may result in the future in shifting demand for our hydrocarbon products, and have resulted in additional litigation and governmental investigations, or and/or threats thereof, against the company.
• Some stakeholders, including but not limited to sovereign wealth, pension, and endowment funds, have been divesting and promoting divestment of of, or screening out of out, fossil fuel equities and urging lenders to limit funding to companies engaged in the extraction of fossil fuel reserves.
• These circumstances, among others, may result in pressure from activists on production; unfavorable reputational impacts, including inaccurate perceptions or a misrepresentation of our actual ESG policies, practices and performance; diversion of management s attention and resources; and proxy fights, among other material adverse impacts on our businesses. 25 Table of Contents In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters, including climate change and climate-related risks (including entities commonly referred to as raters and rankers ).
• Chevron regularly evaluates its ambitions and expects to change or eliminate The company has changed and/or eliminated some of these aspirations, targets, and other ambitions and may continue to do so in the future for various reasons, including market conditions; its strategy or portfolio; and financial, operational, policy, reputational, legal and other factors.
• Our ability to achieve any ambition, including with respect those related to GHG emissions or climate-related initiatives, including such as those outlined in the Management s Discussion and Analysis of Financial Condition and Results of Operations, on pages 35 36 through 37, and any as well as efforts concerning new businesses, is subject to numerous risks and contingencies, many of which are outside of Chevron s control. control and persist.
• Examples of such risks and contingencies include: (1) sufficient and substantial advances in technology, including the continuing progress of commercially viable technologies and low- or non-carbon-based energy sources;
• (4) the availability of suppliers that can meet our sustainability-related standards;
• (6) evolving standards for tracking and reporting on 26 Table of Contents emissions and emission reductions and removals;
• (7) customers and consumers preferences and use of the company s products or substitute products; and (8) actions taken by the company s competitors.
• Our failure or 26 Table of Contents perceived failure to pursue or fulfill such ambitions within the timelines we announce, or at all, or to satisfy various reporting standards and regulations could have a negative impact on the company s reputation, investor sentiment, ratings outcomes for evaluating the company s approach to ESG matters, stock price, and cost of capital and expose us to government enforcement actions and private litigation, among other material adverse impacts.

Removed since the previous 10-K 27

• Chevron may not complete the acquisition of Hess Corporation within the time frame the company anticipates or at all, which could have adverse effects on Chevron The completion of the acquisition of Hess Corporation (Hess) is subject to a number of conditions, including approval of any Guyanese governmental body, agency or authority that asserts its approval is required in connection with the transaction, which makes the completion and timing of the completion of the merger uncertain.
• Hess Guyana Exploration Limited (HGEL), a wholly owned subsidiary of Hess, is currently in arbitration with respect to the right of first refusal (Stabroek ROFR) contained in an operating agreement among HGEL, affiliates of Exxon Mobil Corporation (Exxon), and China National Offshore Oil Corporation (CNOOC) regarding the Stabroek Block offshore Guyana.
• The arbitration merits hearing about the applicability of the Stabroek ROFR to the merger has been scheduled for May 2025, with a decision expected in approximately the following three months.
• If the arbitration does not result in a confirmation that the Stabroek ROFR is inapplicable to the merger, and if Chevron, Hess, Exxon and/or CNOOC do not otherwise agree upon an acceptable resolution, then there would be a failure of a closing condition under the merger agreement, in which case the merger would not close.
• On December 7, 2023, Chevron and Hess each received a request for additional information and documentary materials (Second Request) from the Federal Trade Commission (FTC).
• Following the FTC review of the transaction, on September 30, 2024, the FTC announced that a majority of the Commission voted to accept a consent agreement among the FTC, 22 Table of Contents Chevron and Hess, resolving the concerns the FTC identified during its review of the transaction.
• Chevron and Hess have taken and will continue to take appropriate steps to maintain our ability under the Hart-Scott-Rodino Act of 1976, as amended, to close the merger following satisfactory resolution of the ongoing arbitration proceedings regarding preemptive rights in the Stabroek Block joint operating agreement.
• Additionally, if any Guyanese governmental body, agency or authority of competent jurisdiction asserts that its approval is required as a result of the consequences of the merger in Guyana on Hess assets in Guyana (which has not occurred as of the filing date of this report), approval of such governmental body, agency or authority will become a condition to each party s obligation to complete the merger.
• The failure to satisfy all of the required conditions could delay the completion of the acquisition for a significant period of time or prevent it from occurring at all.
• A failure to complete the acquisition would mean that we will not realize the anticipated benefits of the transaction.
• In addition, the terms and conditions of the required regulatory authorizations and consents for the acquisition that are granted, if any, may impose requirements, limitations or costs or place restrictions on the conduct of the company s business after the transaction or materially delay the completion of the acquisition.
• A delay in completing the acquisition could cause the company to realize some or all of the benefits later than we otherwise expect to realize them if the acquisition is successfully completed within the anticipated timeframe, which could result in additional transaction costs or in other negative effects associated with uncertainty about completion of the acquisition.
• For information concerning the company s tax liabilities, see Note 17 Taxes and Note 24 Other Contingencies and Commitments .
• The Paris Agreement went into effect in November 2016, and a number of countries in which we operate have adopted and may adopt additional policies intended to meet their Paris Agreement goals.
• In addition, the U.S.
• Inflation Reduction Act (IRA) implements various incentives for lower carbon activities, including carbon capture and storage and the production of hydrogen and sustainable aviation fuel.
• Although the IRA offers incentives that could support certain lower carbon lines of business, those same incentives could negatively impact supply and/or demand for our oil and gas products in the future or any existing or future lower carbon business lines.
• In particular, Chevron has announced an aspiration to achieve net zero Scope 1 and 2 emissions in upstream by 2050.
• The company also has set nearer-term GHG emission-related targets for upstream carbon intensity and portfolio carbon intensity.
• (3) the availability and acceptability of cost-effective, verifiable carbon credits;
• (5) evolving regulatory requirements, including changes to IPCC s Global Warming Potentials and the United States Environmental Protection Agency (U.S.
• EPA) Greenhouse Gas Reporting Program, affecting ESG standards or disclosures;
• (8) actions taken by the company s competitors in response to legislation and regulations; and (9) successful negotiations for carbon capture and storage and nature-based solutions with customers, suppliers, partners, and governments.
• For example, Chevron s methane intensity target is calculated based on Compendium of Greenhouse Gas Emissions Methodologies for the Oil and Natural Gas Industry (2021), which requires use of local regulatory reporting methodologies where applicable.
• EPA has adopted notable changes to reporting methodologies in its Greenhouse Gas Reporting Program (40 C.F.R.
• Part 98.230), which are applicable to Chevron s U.S. operations.
• We expect these adopted changes may increase our reported emissions in future years, and therefore, increase our reported methane intensity.

Source: SEC EDGAR filings, compared sentence by sentence by EdgarStack. Sentence matching is automated and may pair or split passages imperfectly; check the linked filings before relying on any passage. A software tool, not financial advice. Not affiliated with the U.S. Securities and Exchange Commission.