Chevron Corporation

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Chevron Corporation
Type Public (NYSE: CVX)
Founded 1879 (Pico Canyon, California)
Headquarters San Ramon, California,
USA Flag of the United States
Key people David J. O'Reilly, CEO & Chairman
Steve Crowe, CFO
Industry Oil and Gasoline
Products Petrochemical
Revenue ▲US$210.78 Billion (2007)[1]
Net income ▲US$18.69 Billion (2007)[2]
Employees 62,000 (2006)
Website www.chevron.com

Chevron Corporation (NYSE: CVX) is the world's fifth largest global energy company. Headquartered in San Ramon, California, USA and active in more than 180 countries, it is engaged in every aspect of the oil and gas industry, including exploration and production; refining, marketing and transport; chemicals manufacturing and sales; and power generation. Chevron is one of the world's six "supermajor" oil companies.

Contents

[edit] History

Chevron was originally known as Standard Oil of California, or Socal, and was formed amid the antitrust breakup of Standard Oil in 1911. It was one of the "Seven Sisters" that dominated the world oil industry during the early 20th century. In 1933, Saudi Arabia granted Socal a concession to find oil, which finally occurred in 1938 when the largest oil field on earth was discovered. Socal's subsidiary California-Arabian Standard Oil Company evolved over the years, becoming the Arabian American Oil Company (ARAMCO) in 1944. In 1973, the Saudi government began buying into ARAMCO. By 1980, the company was entirely owned by the Saudis and in 1988, the name was changed to Saudi Arabian Oil Company (Saudi Aramco).

In 1984, the merger between Chevron and Gulf Oil became the largest merger in world history at the time. Because of its size, Gulf divested many of its worldwide operating subsidiaries and sold some Gulf stations and a refinery in the eastern United States to satisfy US antitrust requirements. As part of the merger, Socal rebranded to become Chevron Corporation.[3]

In June 1998 Dynegy Inc. (NYSE: DYN) was created from the merger of Chevron's former natural gas and natural gas liquids businesses with Dynegy's predecessor, NGC Corp. (formerly NYSE: NGL). NGC had been an integrated natural gas services company around since 1994.[4]

In a merger completed February 1, 2000, Illinova Corp. (formerly NYSE: ILN) became a wholly-owned subsidiary of Dynegy Inc., in which Chevron also took a 28% stake.[4]

In 2001, the former Chevron corporation merged with Texaco to form ChevronTexaco. It was among 53 entities that contributed the maximum of $250,000 to the second inauguration of President George W. Bush.[5] [6] [7]

On May 9, 2005, ChevronTexaco announced it would drop the Texaco moniker and return to the Chevron name. Texaco will remain as a brand under the Chevron Corporation. On August 19, 2005, Chevron merged with the Unocal Corporation, a move which, because of Unocal's large South East Asian geothermal operations, made Chevron the largest producer of geothermal energy in the world. [8]

[edit] Overview

Entrance driveway of Chevron's headquarters complex in San Ramon, California
Entrance driveway of Chevron's headquarters complex in San Ramon, California

Chevron employs approximately 59,000 people worldwide (of which 27,000 are U.S.-based) and had approximately 12 billion barrels (1.9 km³) of oil-equivalent net proved reserves at December 31, 2003. Daily production in 2003 was 2.5 million net oil-equivalent barrels (400,000 m³) per day. In addition, the company had a global refining capacity at year-end 2003 of 2.2 million barrels (350,000 m³) of crude oil per day. The company has a worldwide marketing network in 84 countries with approximately 24,000 retail sites, including those of affiliate companies. The company also has interests in 13 power generating assets in the United States, Asia, and Europe. Chevron also has gas stations in Western Canada.

The company marked its 125th anniversary in 2004, tracing its roots to an oil discovery at Pico Canyon, north of Los Angeles. This find led to the formation, in 1879, of the Pacific Coast Oil Company, the predecessor of Chevron Corporation. Another side of the genealogical chart points to the 1901 founding of The Texas Fuel Company, a modest enterprise that started out in three rooms of a corrugated iron building in Beaumont, Texas. This company would later become known as Texaco.

Chevron was headquartered in San Francisco for nearly a century before it relocated its headquarters across the bay to San Ramon CA. Chevron's headquarters buildings at 555 and 575 Market Street, built in the mid-1960s, in San Francisco were sold in December 1999. [1] Its original headquarters were at 200 Bush St., built in 1912. [2] Now, their headquarters are at 6001 Bollinger Canyon Road, San Ramon, CA.

A Standard-branded Chevron station (with Chevron logo) in Fort Worth, Texas
A Standard-branded Chevron station (with Chevron logo) in Fort Worth, Texas

Chevron is the owner of the Standard Oil trademark in a 16-state area of the western and southeastern United States. To maintain ownership of the mark, the company owns and operates one Standard-branded Chevron station in each state of its area. [3] Chevron also is currently the owner of the trademark rights to Texaco brand gasoline. Texaco fuels are now supplied by Chevron's network of wholesalers.

Chevron is the only brand of gas used by several automakers when testing vehicles, including General Motors and Toyota. (Ford does as well despite a strategic alliance with BP.) Chevron also has often had one of the highest brand loyalty rates for gasoline in America, with only Shell and BP (through Amoco) having equally high rates.[citation needed]

Chevron Shipping Company is a wholly owned subsidiary company which handles the maritime transport operation for Chevron Corporation. The fleet comprises crude oil and product tankers as well as three gas tankers operated by Chevron Shipping for other companies. The fleet is divided into two sections: The US fleet transports oil products from Chevron refineries to customers in the US. The ships are manned by US citizens and are flagged in the US. The International fleet vessels are flagged in the Bahamas and have officers and crews from many different nations. The largest ships are 308,000 tonne VLCCs. The job of the international fleet is to transport crude oil from the oilfields to the refineries. The international fleet mans two LPG tankers and one LNG tanker.

Chevron ships originally had names beginning with "Chevron", such as the Chevron Washington and Chevron South America, or were named after former or serving Directors of the company. Samuel Ginn, William E Crain and most notably Condoleezza Rice were amongst those honored, but controversy led to its being renamed Altair Voyager.[9] All the ships were renamed in 2001 to reflect the corporate merger with Texaco. The International fleet ships are all named after celestial bodies or constellations (Orion Voyager, Altair Voyager etc) and the US ships are named after states (Washington Voyager, Colorado Voyager etc).

[edit] Alternative Energy

The company also develops, and commercializes advanced energy technologies, including fuel cells, photovoltaics, and advanced batteries, and has said it is active in research and development efforts to utilize hydrogen as a fuel for transport and power.

[edit] Biofuels

Chevron is investing $300M USD a year into alternative fuel sources, and has created a biofuels business unit. [10][11]

Chevron Corporation and US-DOE's National Renewable Energy Laboratory (NREL) announced that they had entered into a collaborative research and development agreement to produce biofuels from algae. Under the agreement, Chevron and NREL scientists will collaborate to identify and develop algae strains that can be economically harvested and processed into transportation fuels such as jet fuel. [12]

[edit] Environmental record

Companies in the petroleum-based energy industry generally draw a wide range of criticism, and are often referred to as Big Oil. Because of the inelasticity of the demand of petroleum and the high risk nature of operations abroad, the companies involved in the industry have been accused of playing a large role in influencing economic and foreign policies in nations across the globe. Some criticism is directed at the industry in general, in that the burning of fossil fuels contributes to air pollution and global warming, and that extractive operations spoil natural landscapes. Large energy companies are often suspected of resisting alternative energy, for example buying patents to new technological advances to stop more energy efficient modes of transport.

Chevron Corporation in particular is allegedly responsible for severe ecological destruction. Texaco, which became part of Chevron in 2001, dumped over 18 billion gallons of toxic wastewater into the Amazon rainforests from 1964-1992, in what has become known as the “rainforest Chernobyl,” and is often considered one of the world’s worst ecological catastrophes.[13][14][15] Various Ecuadorian groups have sued Chevron for its activities, arguing it purposefully misrepresented its activities in the rainforest. Chevron’s attorneys maintain they are being victimized by profit-seeking plaintiffs.[16] The lawsuit is led by Pablo Fajardo, who recently won a CNN Heroes award for his work.[17] Pablo Fajardo and Luis Yanza were also awarded the Goldman Environmental Prize for their work in this case, the most prestigious environmental prize in the world.[18] In April 2008, a court-appointed expert submitted a report to the judge in the Ecuadorian trial recommending that Chevron be held liable for damages between $7 billion and $16 billion.[19] The larger estimate reflects an "unjust enrichment" penalty based on the finding that Texaco saved approximately $8.3 billion by using substandard environmental controls.[20]

A separate lawsuit was dismissed from US courts when it was found that "they [the plaintiffs] revealed in depositions that they didn't actually have cancer, or that the family members they said had cancer actually did not."[21] Cristobal Bonifaz, the lawyer representing the plaintiffs, was later fined $45,000 for his involvement in the falsified claims.[22] Bonifaz had previously been fired from the plaintiffs' legal team in the larger Ecuadorian case for unethical conduct.[23]

In the U.S., Chevron’s activities in Richmond, California have been the subject of ongoing controversy. Chevron’s Richmond operations house over 11 million pounds of toxic materials, and have been responsible for over 304 accidents.[24] For illegally bypassing wastewater treatments and failing to notify the public about toxic releases, Chevron’s Richmond refineries were forced to pay $540,000 in 1998.[25] Overall, Chevron is responsible for ninety-five Superfund sites—locations for which the EPA has earmarked funds for cleanup.[26] In October, 2003, the state of New Hampshire sued Chevron and other oil companies for using MTBE, a gasoline additive that the attorney general claimed polluted much of the state's water supply.[27]

Chevron’s African operations have also been criticized as environmentally unsound.[28] In 2002, Angola became the first African nation to ever fine a major multinational corporation operating in its own waters when it demanded 2 million dollars in compensation for oil spills allegedly caused by Chevron’s poor maintenance.[29]

On October 16, 2003, Chevron U.S.A. Inc. resolved a Clean Air Act settlement, which reduced harmful air emissions by about 10,000 tons a year.[30] In San Francisco, Chevron was filed by a consent decree to spend almost $275 million to install and utilize innovative technology to reduce nitrogen and sulfur dioxide emissions at its refineries.[31] After violating the Clean Air Act at an offline loading terminal in El Segundo, California, Chevron paid a $6 million penalty as well as $1 million for environmental improvement projects.[32] Chevron also had implemented programs that minimized production of hazardous gases, upgraded its leak detection and repair practices, reduced emissions from its sulfur recovery plants and adopted strategies to ensure the proper handling of harmful benzene wastes at each refinery.[33] Chevron also spent about $500,000 to install leakless valves and double-sealed pumps at its El Segundo refinery, which could prevent significant emissions of air contaminants.[34]

Defenders of Chevron’s environmental record point to recent changes in the corporation, particularly its pledge, as of 2004, to combat global warming. [35]

[edit] Abuse and Death of Nigerian Protesters

On May 28, 1998, as activists were staging a demonstration on an oil platform in the Niger Delta, Nigeria, Nigerian police and soldiers, instead of Chevron representatives (as the activists expected), were flown in with Chevron helicopters. Soldiers shot at the activists and subsequently two activists (Jola Ogungbeje and Aroleka Irowaninu) died from their wounds [4]. Chevron describes the situation as "a violent occupation of private property by aggressors seeking to extort cash payments from the company."[36] The Nigerian government is reportedly 80% dependent upon oil production and is condemned by many for its reported [5] treatment of environmentalists. The documentary "Drilling and Killing" covers these and other topics.

U.S. District Judge Susan Illston, allowing a lawsuit brought by victims and victims' families against Chevron to proceed, said that there is evidence that Chevron has hired, supervised, and provided transportation to Nigerian military forces known for their "general history of committing abuses." [6] In March 2008, the plaintiffs' lawyers, without explanation, "quietly moved to withdraw half of their claims" against Chevron. [37]

[edit] Accusations of irresponsibility

Chevron has been accused of not fulfilling its community responsibilities in Cabinda, Angola. Chevron's employees work in isolation in the Malongo terminal, which is protected by barbed wire fence and guarded gates because of security concerns. Most of the groceries and other commodities are imported duty free from overseas, limiting the economic impact on local markets. In a survey Cabindans expressed their concern that the multi-billion dollar oil industy has not improved their daily lives.[7]

In 2003, it was revealed that the company had engaged in illegal trade with Iraq and had to pay a $14,000 fine to the US government.[citation needed]

[edit] New Policy and Development

Chevron has taken steps to reduce emissions of greenhouse gases and to pursue cleaner forms of energy.[38] Chevron invests in alternative energy sources and has set targets for reducing its own emissions, and has scored highest among U.S. oil companies for this. [38] Chevron is the world's largest producer of geothermal energy, providing enough power for over 7 million homes.[39]

[edit] Board of Directors

As of April 2007 [8]:

Condoleezza Rice is a former member of the board of directors, and also headed Chevron's committee on public policy until she resigned on January 15, 2001, to become National Security Advisor to President George W. Bush.

[edit] Marketing Brands

The typical Chevron gas station design that was used until 2006.
The typical Chevron gas station design that was used until 2006.
In 2006, Chevron began phasing in this gas station design.
In 2006, Chevron began phasing in this gas station design.

[edit] Fuel

[edit] Convenience Stores

  • Star Mart
  • Extra Mile [9]

[edit] Lubricants

  • Delo (sold by Caltex and Chevron)
  • Havoline (sold by Caltex and Texaco)
  • Revtex (sold by Caltex)
  • Ursa (sold by Texaco)

[edit] Fuel Additives

  • Techron - Chevron, Texaco (phased in during 2005), Caltex (phased in during 2006 and later)
  • Clean System 3 - Texaco (phased out during 2005 in favor of Techron)

[edit] See also

[edit] References

  1. ^ http://money.cnn.com/magazines/fortune/fortune500/2008/snapshots/385.html
  2. ^ http://money.cnn.com/magazines/fortune/fortune500/2008/snapshots/385.html
  3. ^ Chevron Products Homepage
  4. ^ a b CHEVRON CORP. APPLAUDS DYNEGY-ILLINOVA MERGER, Chevron Press Release Archives, Feb. 2, 2000
  5. ^ Drinkard, Jim. "Donors get good seats, great access this week", USA Today, 2005-01-17. Retrieved on 2008-05-25. 
  6. ^ "Financing the inauguration", USA Today. Retrieved on 2008-05-25. 
  7. ^ "Some question inaugural's multi-million price tag", USA Today, 2005-01-14. Retrieved on 2008-05-25. 
  8. ^ “Chevron claims energy debate”, BBC News, 2006-02-19, <http://news.bbc.co.uk/2/hi/business/4716334.stm> 
  9. ^ Carla Marinucci. Chevron redubs ship named for Bush aide Condoleezza Rice drew too much attention. San Francisco Chronicle, May 5, 2001. Retrieved July 12, 2005.
  10. ^ BBC NEWS | Business | Chevron claims energy debate
  11. ^ http://today.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?view=PR&symbol=CVX.N&storyID=171064+31-May-2006+PRN
  12. ^ http://www.nrel.gov/news/press/2007/535.html
  13. ^ Amazon Defense Coalition - Chevron's Rainforest Chernobyl
  14. ^ Site Temporarily Unavailable
  15. ^ Rain Forest Jekyll And Hyde? - New York Times
  16. ^ Jungle Law: Politics & Power: vanityfair.com
  17. ^ Pablo Fajardo Wins CNN Hero Award. Justicianow.com. Published December 10, 2007. Last accessed May 20, 2008.
  18. ^ [http://www.goldmanprize.org/2008/centralsouthamerica Goldman Environmental Prize - South and Central America Recipients 2008
  19. ^ [http://www.latimes.com/business/la-fi-chevron3apr03,0,7894263.story Los Angeles Times, "Chevron should pay for environmental damage, Ecuador expert tells court"
  20. ^ [http://www.chevrontoxico.com/downloads/cabrera-english.pdf Richard Cabrera, Court expert summary report, p. 6
  21. ^ http://www.bizjournals.com/sanfrancisco/stories/2007/11/19/daily11.html?q=ecuador%20chevron
  22. ^ http://online.wsj.com/article/SB120856180625127903.html?mod=googlenews_wsj
  23. ^ [http://www.texacotoxico.org/eng/index.php?option=com_content&task=view&id=311&Itemid=50 Amazon Defense Coalition press release, 10/19/07
  24. ^ Environmental Justice Case Study: Richmond, CA
  25. ^ CHEVRON RICHMOND REFINERY TO PAY $540,000 ENVIRONMENTAL PENALTY | Newsroom | US EPA
  26. ^ Responsible Shopper Profile: Chevron
  27. ^ Knowmore.org - Question Your Goods. Vote With Your Wallet
  28. ^ AfricaResource.com - Chevron, Oil Pollution, and Human Rights
  29. ^ BBC NEWS | Business | Angola fines Chevron for pollution
  30. ^ Environmental Protection Agency (10/16/03). Retrieved on 06 May 2008.
  31. ^ Department of Justice (10/16/03). Retrieved on 06 May 2008.
  32. ^ [http://www.justice.gov/opa/pr/2000/August/493enrd.htm CHEVRON AGREES TO RECORD $7 MILLION ENVIRONMENTAL SETTLEMENT] (08/11/00). Retrieved on 06 May 2008.
  33. ^ Environmental Protection Agency (10/16/03). Retrieved on 06 May 2008.
  34. ^ [http://www.justice.gov/opa/pr/2000/August/493enrd.htm CHEVRON AGREES TO RECORD $7 MILLION ENVIRONMENTAL SETTLEMENT] (08/11/00). Retrieved on 06 May 2008.
  35. ^ Quest for clean energy / Chevron, PG&E cited for positive steps to combat global warming
  36. ^ "Nigerians pull half of claims in Chevron suit". Walter Olson, Pointoflaw.com. Published April 7, 2008. Last accessed April 8, 2008.
  37. ^ Nigerians pull half of claims in Chevron suit, Bob Egelko, San Francisco Chronicle. March 12, 2008.
  38. ^ a b http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2006/03/22/BUGKPHRTJ71.DTL&type=business
  39. ^ http://www.chevron.com/Stories/#/stories/re_geo/geo_ov/

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