Chevron plans downstream restructuring
Chevron Corp. plans to restructure its global downstream business in a move company officials said would leave the organization smaller and less complex.
By OGJ editors
HOUSTON, Jan. 20 -- Chevron Corp. plans to restructure its global downstream business in a move company officials said would leave the organization smaller and less complex.
A video message to employees from Mike Wirth, executive vice-president for the company’s global downstream business, warned of unspecified workforce reductions.
According to a report by the Houston Chronicle, Wirth told employees details of the restructuring would be available in March. The plan is to be in place by the third quarter, he said.
Chevron confirmed that employees had been told of the reorganization and the streamlining of staff that will result. A company official told Oil & Gas Journal the video message made no new announcement about assets or the markets in which Chevron works.
The official said downstream assets and markets have been subject to “ongoing review” for many months and already have resulted in cutbacks of various forms.
The video message follows a Jan. 11 interim financial update from Chevron that warned fourth-quarter 2009 downstream earnings would be “sharply lower, mainly due to significantly weaker refining margins.”
Chevron’s global refining capacity totals 2 million b/d.
According to the 2008 annual report, the company has 937,000 b/d of capacity in wholly owned refineries in the US, including 265,000 b/d at El Segundo, Calif.; 54,000 b/d at Kapolei, Ha.; 330,000 b/d at Pascagoula, Miss.; 243,000 b/d at Richmond, Calif.; and 45,000 b/d at Salt Lake City, Utah. It also has an 80,000-b/d asphalt plant at Perth Amboy, NJ.
Outside the US, Chevron owns refineries at Burnaby, BC, 55,000 b/d; Cape Town, South Africa, 110,000 b/d; and Pembroke, UK, 210,000 b/d.
It also owns shares in refineries outside the US through international affiliates with net capacities totaling 747,000 b/d. The international capacities include 350,000 b/d through Chevron’s 50% share of the Yeosu refinery in South Korea and 145,000 b/d through its 50% share of the Pualau Merlimau refinery in Singapore.