company may be required to make payments under certain conditions if the affiliates do not perform under the agreements. There are no recourse provisions to third parties, and no assets are held as collateral for these pricing guarantees.

     Guarantees of $294 million have been provided to third parties, including guarantees of approximately $150 million related to construction loans to host governments in the company’s international upstream operations. The remaining guarantees of $144 million were provided principally as con-

ditions of sale of the company’s interest in certain operations, to provide a source of liquidity to the guaranteed parties and in connection with company marketing programs. No amounts of the company’s obligations under these guarantees are recorded as liabilities. About 85 percent of the total amounts guaranteed will expire in 2010, with the remainder expiring after 2010. The company would be required to perform under the terms of the guarantees should an entity be in default of its loan or contract terms, generally for the full amounts disclosed. Approximately $85 million of the guarantees have recourse provisions, which enable the company to recover any payments made under the terms of the guarantees from securities held over the guaranteed parties’ assets.

     At December 31, 2005, Chevron also had outstanding guarantees for about $190 million of Equilon debt and leases. Following the February 2002 disposition of its interest in Equilon, the company received an indemnification from Shell Oil Company (Shell) for any claims arising from the guarantees. The company has not recorded a liability for these guarantees. Approximately 50 percent of the amounts guaranteed will expire within the 2006 through 2010 period, with the guarantees of the remaining amounts expiring by 2019.

     Indemnifications The company provided certain indemnities of contingent liabilities of Equilon and Motiva to Shell and Saudi Refining, Inc. in connection with the February 2002 sale of the company’s interests in those investments. The indemnities cover certain contingent liabilities. The company would be required to perform should the indemnified liabilities become actual losses. Should that occur, the company could be required to make future payments up to $300 million. Through the end of 2005, the company paid approximately $38 million under these indemnities. The company expects to receive additional requests for indemnification payments in the future.

     The company has also provided indemnities relating to contingent environmental liabilities related to assets originally contributed by Texaco to the Equilon and Motiva joint ventures and environmental conditions that existed prior to the formation of Equilon and Motiva or that occurred during the periods of Texaco’s ownership interests in the joint ventures. In general, the environmental conditions or events that are subject to these indemnities must have arisen prior to December 2001. Claims relating to Equilon indemnities must be asserted as early as February 2007, or no later than February 2009, and claims relating to Motiva must be asserted no later than February 2012.