Chevron Corporation

Chevron Corporation (NYSE: CVX) is the world's fifth largest global energy companies. 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.

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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.^[2]

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.^[3]

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.^[3]

In 2001, the former Chevron corporation merged with Texaco to form ChevronTexaco. 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. ^[4]

Overview

  Chevron employs approximately 59,000 people worldwide 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. [2] Its original headquarters were at 200 Bush St., built in 1912. [3]

  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. [4] 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.^[5] 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).

Energy technologies

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.

Chevron is investing $300M USD a year into alternative fuel sources, and has created a biofuels business unit. ^[6][7]

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 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.^{[8] [9] [10]} 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. ^[11] The lawsuit is led by Pablo Fajardo, who recently won a CNN Heroes award for his work. ^[12]

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. ^[13] 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. ^[14] Overall, Chevron is responsible for ninety-five Superfund sites—locations for which the EPA has earmarked funds for cleanup. ^[15] 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. ^[16]

Chevron’s African operations have also been criticized as environmentally unsound. ^[17] 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. ^[18]

Defenders of Chevron’s environmental record point to recent changes in the corporation, particularly its pledge, as of 2004, to combat global warming. ^[19]

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 [5]. The Nigerian government is reportedly 80% dependent upon oil production and is condemned by many for its reported [6] treatment of environmentalists. The documentary "Drilling and Killing" covers these and other topics.

US 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." [7]

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.[8]

In 2003, it was revealed that the company had engaged in illegal trade with Iraq and had to pay a fourteen thousand dollar fine to the US government.

Board of directors

As of April 2007 [9]:

• David J. O'Reilly (Chairman & CEO)
• Samual Armacost
• Linnet F. Deily
• Robert Denham
• Robert Eaton
• Sam Ginn
• Franklyn Jenifer
• Sam Nunn
• Donald Rice
• Peter Robertson
• Charles Shoemate
• Ronald Sugar
• Carl Ware

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.

Marketing Brands

Fuel

• Chevron
• Standard Oil (in limited circumstances)
• Texaco
• Caltex
• Gulf
• Unocal

Convenience Stores

• Star Mart
• Extra Mile [10]

Lubricants

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

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)

See also

• Jack 2
• General Motors streetcar conspiracy

References

Criticism

• World Internet News: "Big Oil Looking for a Government Handout", April 2006.
• The Independent, 27 April 2005, "Amazon Pollution: Victims of 'Toxico'"
• Website critical of Chevron's activities in Ecuador
• "US: Chevron donates to Schwarzenegger, gets removal of restrictions on oil refineries in California"
• Nigeria - Human Rights Concerns Amnesty USA website
• Goodman, Amy, Scahill, Jeremy. "Drilling and Killing." The Nation (Nov 16, 1998): 6(1).
• Clean Up Equador Campaign [11]