strategic-management

Standard Oil and created Standard of California as an independent company. After the war
ended, the company merged with Pacific Oil Company, becoming Standard Oil Company
of California (Socal). Socal formed a joint venture with Texaco in 1936, Caltex, to develop
and market oil in the Middle East and Indonesia. By the end of the 1930s, the Aramco partnership
was formed in the Middle East, composed of Socal, Texaco, Exxon, and Mobil.
Following World War II, the additives and petroleum-based chemicals invented for the war
were quickly turned to peacetime uses. The age of petrochemicals had arrived, and with it
came Chevron Chemical Company. By 1980, Aramco was entirely owned by the Saudis,
and in 1988 the name was changed to Saudi Arabian Oil Corporation. In 1984, the merger
between Standard Oil of California and Gulf Oil was the largest merger in history at that
time, nearly doubling the company’s worldwide proved oil and gas reserves. As part of the
merger, Socal changed its name to Chevron Corporation. Through the purchase of Tenneco
Inc.’s U.S. Gulf of Mexico crude oil and natural gas properties in 1988, Chevron became
one of the largest gas producers in the United States. Chevron merged with NGC
Corporation in the area of natural gas to form Dynegy in 1998. In 1993, Chevron formed
Tengizchevroil, a joint venture with the Republic of Kazakhstan, becoming the first major
Western oil company to enter newly independent Kazakhstan.
In 2001, Chevron acquired Texaco for $37.5 billion and changed its name yet again
to ChevronTexaco Corporation. But after spending sizable amounts on changing the
name/logo on everything from letterhead to the credit union’s legal name, on May 9, 2005,
the name returned to Chevron. In 2005, Chevron had another name change opportunity
through its acquisition of Unocal Corporation. But this time it opted to leave the brand
unchanged and reduce confusion. The Unocal acquisition made Chevron the world’s
largest producer of geothermal energy in the world.
Present Conditions
Chevron is the second-largest integrated energy company in the United States and among
the largest corporations in the world, based on market capitalization as of December 31,
2008. Headquartered in San Ramon, California, with the stock ticker symbol CVX, it conducts
business in more than 100 countries. Exhibit 1 provides a list of those countries
where Chevron has extensive business involvement.
Chevron engages in every aspect of the crude oil and natural gas industry, including
exploration and production, manufacturing, marketing and transportation, chemicals manufacturing
and sales, geothermal, power generation, and renewables. Its global workforce
consisted of approximately 66,000 employees at year-end 2008. The firm’s executive positions
with reporting relationships are provided in Exhibit 2.
In 2008, Chevron produced 2.53 million barrels of net oil-equivalent per day. About
75 percent of that volume occurred outside the United States in more than 20 different
countries. Chevron had a global refining capacity of more than 2 MM barrels of oil per day
at the end of 2008 and invested $22.8 billion in capital projects last year.
The marketing network supports more than 25,000 retail outlets (including affiliate
operations) on six continents, with investments in 13 power-generating facilities in the
EXHIBIT 1 Main Countries of Chevron Global Operations
Angola Chad New Zealand Thailand & Cambodia
Argentina China Nigeria Trinidad & Tobago
Australia Columbia Philippines United Kingdom
Azerbaijan India Russia United States
Bangladesh Indonesia Saudi Arabia Venezuela
Belgium Kazakhstan Singapore
Brazil Kuwait South Africa
Canada Netherlands South Korea
Source: Adapted from www.chevron.com (2009).
CASE 29 • CHEVRON CORPORATION — 2009 283