Chevron Corp Chief Executive John Watson will step down from the end of month
Probably and next month be replaced by Vice Chairman Mike Wirth, a source told Reuters on Tuesday.
The Unexpected shake-up at one of the world’s largest petroleum and natural gas producers comes as pressure grows on the industry to further cut costs and control spending.
In Wirth, Chevron would pivot to a leader With expertise in refining, where costs are often scrutinized down to the fraction of a penny.
The move would copy rival Exxon Mobil Corp, which earlier this year named refining expert Darren Woods as its own CEO, a step widely seen as putting money generation to protect payouts to investors above pricy exploration projects.
The CEOs of competitions Total and Royal Dutch Shell have experience in refining.
Chevron’s The corporation’s shares are trading at exactly the same level they were in early 2011.
Neither Watson nor Wirth responded to requests for comment.
The California-based organization is emerging from a global commodity price slump and is starting to reap the fruits of a multibillion-dollar expansion spree.
The Exit is not acrimonious and Watson sees it as an opportunity to hand over the reins of a growing venture to Wirth, according to the source.
Fresh direction to take Chevron farther,” said Brendan Warn, an equity analyst with BMO Capital Markets, which advises clients to purchase Chevron’s stock.
The company’s growth under Watson has not been painless. Chevron has fought with cost overruns at two Australian liquefied natural gas (LNG) projects, faced major technology challenges at its U.S. Gulf of Mexico expansions and is now contending with growing doubt about its operations in strife-torn Venezuela, where it’s the only remaining major U.S. oil producer.
LNG projects has now come online, and the other is expected to by next month. Combined, both are expected to fund half the company’s dividend by 2019.
No acquisitions were made by Watson during his Direction, ceding growth opportunities to rivals. Former Exxon CEO Rex Tillerson, for example, bought natural gas producer XTO Energy during his tenure and rapidly expanded into Qatar’s LNG sector.
Watson, Who has five years remaining before he strikes Chevron’s mandatory retirement age of 65 stuck to jobs already in the planning stages when he became CEO in January 2010, as opposed to coming up with new deal or expansion ideas. Watson’s predecessor, David O’Reilly, retired at 62.
The Change at the top of the company, first reported by the Wall Street Journal on Tuesday failed to shake markets. Shares of Chevron rose less than 1 percent to close at $106.36.
Watson Is expected to remain on the provider’s board of directors for a period of time as Wirth grows to the CEO role, according to the source.
Like Many of the business’s executives, Watson has worked at Chevron his entire career and is the product of an inner talent development program.
“It would be hard to sit there and say that John Watson Did a bad job as CEO,” said Oliver Pursche of wealth manager Bruderman Brothers LLC, which holds shares in the corporation. “When we think about how Chevron has run its distinct business lines throughout the oil price slump, they have handled very well.”
Wirth, 56, has been vice Chairman since February and runs the company’s pipeline division. He previously conducted Chevron’s refining unit, which has grown rapidly in recent years, with the company investing heavily in renovations and expansion.
Chevron last month posted higher-than-expected Second-quarter profits on higher production and oil prices and lower spending on big projects.
Under Watson the company was Shifting additional funds to shale oil projects that guarantee quicker returns, but most of the shale acreage has been in the company’s portfolio since the 1930s.
Watson, an economist by Training, rose through the company’s ranks, served as its chief financial officer, and earlier oversaw the integration of Texaco Operations following the 2000 acquisition.