Chevron Restructures for Growth Amidst Petrochemical Expansion Ambitions

Chevron Corporation recently announced a series of executive changes and organizational restructuring aimed at improving operational efficiency and fostering consistent growth. The company has opted to merge its oil, products, and gas divisions into two main units: upstream and downstream, midstream, and chemicals. Mark Nelson will continue as vice chairman and executive vice president of the oil, products, and gas division. This transformation in leadership and organizational structure is intended to drive innovation, efficiency, and shareholder value creation. Starting July 1, 2025, Clay Neff, current president of international exploration and production, will assume the role of president for upstream operations. Bruce Niemeyer, currently leading Americas exploration and production, will become president of shale and tight oil.

Furthermore, Chevron has also revamped its downstream, midstream, and chemicals division to ensure efficient execution of pivotal workflows. Andy Walz will maintain his position as president of this division. In addition, Chevron Technology Center will undergo a reorganization to propel technology advancement and project execution, with R. Booth replacing Balaji Krishnamurthy as vice president of technology, projects, and execution. These management changes will be effective April 1, 2025. Alongside these personnel shifts, Chevron and its partners have submitted a development plan to boost the maximum production of Israel's Leviathan offshore gas field, targeting an annual capacity increase to 23 billion cubic meters.

In another strategic move, Chevron is exploring opportunities to expand its stake in Chevron Phillips Chemical Company by potentially acquiring Phillips 66's shares in the joint venture. Activist shareholder Elliott Management has been urging Phillips 66 to divest its stake, which aligns with Chevron's long-held interest in consolidating its position in the petrochemical sector. Should Phillips 66 decide to sell, Chevron and Phillips 66 hold preemptive rights to each other's shares, ensuring either party is first approached for any sale. Although no formal negotiations have commenced, Chevron's intention to secure these shares underscores its strategy to bolster its portfolio in petrochemicals. However, whether Phillips 66 agrees to sell and the valuation of these shares remain uncertain at this stage.