Chevron Essay ⋆ Business Essay Examples ⋆ EssayEmpire

Chevron Corporation, one of the world’s leading energy companies, is headquartered in San Ramon, California, and operates in more than 100 countries. Among its major business activities are exploration and production of oil and gas, refining, transport, and marketing of oil and oil products, manufacturing and sales of industrial chemicals, as well as power generation.

The company’s business is quite diversified, in terms of both production capabilities and geographic spread. For example, in 2007 in crude oil and natural gas production Chevron produced 2.62 billion barrels of net daily oil-equivalent, with approximately 70 percent of the volume coming from more than 20 countries other than the United States. Throughout the years, the company also has invested heavily in various capital development projects in oil and gas production, transportation, and sales all over the world, including such countries as Angola, Bangladesh, Kazakhstan, Indonesia, and Nigeria. In addition, Chevron has a wide marketing network in 84 countries with approximately 24,000 retail sites and 13 power-generating properties in the United States, Europe, and Asia. In 2007 Chevron made around $214 billion in revenues and nearly $19 billion in net income worldwide.

The company emphasizes four main corporate level strategies that it is pursuing on a global basis:

(1) financial-return objective: aimed at sustainable financial returns that enable Chevron to outperform competition; (2) major business strategies, upstream: aimed at profitable growth in core areas, especially in the natural gas business; (3) major business strategies, downstream: focused on improving returns and selective growth, with a concentration on synergies, and on continuing investment in renewable energy sources; and (4) enabling strategies companywide: focused on investing in people to achieve corporate strategies outlined above, as well as on building organizational capabilities and leveraging technologies.

Chevron, originally known as Standard Oil of California (Socal), was created as a result of the forced breakup of Standard Oil in 1911. After several transformations occurring mainly due to its many concession ventures in the Middle East, by 1980 the company became entirely owned by the Saudi government. In 1984 the cooperation between Socal and Gulf Oil created the largest merger in world business history at the time, and as a part of the merger, Socal changed its brand name to become Chevron Corporation.

Among Chevron’s largest business dealings in the next two decades, the merger with Texaco in 2001 was one of the most prominent mergers and acquisitions to date. Although this merger prompted a brief change of name—to ChevronTexaco—the company decided to return to its Chevron name in 2005, with Texaco and its subsidiaries still remaining a brand under the Chevron Corporation. The same year, Chevron entered into another significant deal, a merger with Unocal Corp., which, thanks to Unocal’s sizeable geothermal operations in southeast Asia, made Chevron the biggest producer of geothermal energy in the world.

In addition to its core business, Chevron also develops and commercializes advanced and alternative energy sources such as fuel cells, photovoltaic technology, and hydrogen-based fuel. Overall, the company is investing about $300 million a year into alternative fuel sources research and development and has created a biofuels business unit, implicitly indicating that it is becoming a part of Chevron’s core business model. In general, all sorts of biofuels and clean technologies are an important part of the company’s business.

Similar to other companies in the petroleum industry that are often a target of much criticism for worldwide political influence and environmental damage, Chevron has been particularly blamed for numerous ecological disasters caused by its allegedly unsound exploration and maintenance practices. For instance, the company has been accused of polluting water supplies in several world regions, including North America (dumping a significant amount of toxic waste and illegally bypassing wastewater treatment facilities in Richmond, California), Africa (Angola), and Asia.

Political influence exerted by “big oil” also remains one of the major criticism points, and has recently emerged once again in regard to Chevron’s attempts to impact the industry reorganization plans in California. Even though many corporations and various interest groups participated in the reform planning process, mainly Chevron enjoyed tremendous success in affecting the final report through the work of its paid lobbyist and lawyers. To return the favor, the company has contributed more than $700,000 to governor’s committees, the California Republican Party, and a governor-controlled political fund.

In order to combat negativity and boost its public image, Chevron, among many other initiatives, pledged to fight global warming and tackle the issues of alternative energy sources. The company has recently created a new public internet-based forum called willyoujoinus.com, where everyone is invited to join the discussion to help find new, clean, and more accessible ways to provide power to the world and its ever-growing demands.

Bibliography:

BBC News, “Chevron Claims Energy Debate,” news.bbc.co.uk (cited March 2009);
Chevron Corporation, www.chevron.com (cited March 2009);
Tom Chorneau, “US: Chevron Donates to Schwarzenegger, Gets Removal of Restrictions on Oil Refineries in California,” Associated Press, corpwatch.org (cited March 2009);
Will You Join Us, www.willyoujoinus.com (cited March 2009).

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