Chevron to streamline operations

Californian oil major Chevron has announced plans to streamline its operations worldwide, with an emphasis on its downstream operations in Europe, the Caribbean and Central America.  A decline in fuel demand caused by the global economic slowdown has reduced profits as oil prices have remained high. Even though consumption is now recovering, additional capacity from foreign refineries has kept profits depressed. San Ramon-based Chevron, the second-largest US oil company by market capitalization, is seeking bids for some assets in Europe, including its Pembrokeshire refinery in Wales. It also intends to sell its lubricants and marketing business in some parts of Central America and the Caribbean. Its operations in Hawaii and Africa, excluding South Africa, will be reviewed. It is hoped that the cost-cutting measures will boost profits this year following the companyÔÇÖs $613 million fourth-quarter loss last year in its downstream segment. In the same period the year before, it made a profit of $2.1 billion. The companyÔÇÖs exploration and production segment is continuing to do well however, with output set to grow by about one percent through 2014; four percent to five percent from 2014 to 2017; and by about three percent beyond 2017. George Kirkland, vice chairman and executive vice president of the companyÔÇÖs Global Upstream and Gas unit said: ÔÇ£Chevron also had another outstanding year in exploration, continuing its industry-leading performance with a 57 percent success rate in exploratory drilling. ÔÇ£We added 1.1 billion barrels of net proved reserves, replacing 112 percent of our production. Over the past 10 years, our reserve replacement exceeds 100 percent." John Watson, Chevron's chairman and CEO, said: "2009 was an outstanding year, capping a decade of performance improvements achieved through consistency in strategy and execution. We have momentum, an advantaged portfolio and proven capabilities that will continue to deliver value to our stockholders. "Chevron has held a long-term view favoring aggressive upstream investment, and the company is poised for another decade of upstream growth. We expect a substantial production increase mid-decade as our portfolio shifts toward natural gas and Asia." Job cuts are expected as part of the cost-cutting program, to the tune of around 12 percent of┬á the 17,000 workers in ChevronÔÇÖs downstream businessÔÇöequating to just over three percent of its overall workforce. As of January, the downstream business had 8,200 employees in the USÔÇö900 of whom were based in Texas, with 700 in Houston's supply and trading group. Chevron has refineries in Richmond and El Segundo, California; Kapolei, Hawaii; Pascagoula, Missouri; and Salt Lake City, Utah.