strategic analysis of chevron
TRANSCRIPT
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Athanasios Pitatzis, Nikolaos D.Ntintas,
Stelios Veisakis, Aikaterini Souvatzoglou,
Evangelia Margoni
MSc Oil and Gas Technology
Eastern Macedonia and Thrace Institute of
Technology
School of Engineering Technology
Department of Petroleum & Natural Gas
Technology
Strategic Analysis of Chevron
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Presentation’s Contents
• Chevron history and basic information
• Financial Data of Chevron Upstream and
Downstream Sector
• SWOT Analysis of Upstream-Downstream
• CPM, Grand Strategy and IE Matrix
• Proposed alternative strategies
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About Chevron
• Second-largest integrated energy company headquartered
in the United States
• They involved in oil, gas, and geothermal energy industries,
including:
– Exploration and production;
– Refining, marketing and transport;
– Chemicals manufacturing and sales
– Power generation
• Sales and other operating revenues – $220 billion, Net
Income $21 billion
• 64,500 employees, including more than 3,200 service
station employees
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Vision and Mission of
Chevron
• At the heart of The Chevron Way is our vision…to be the global energy company most admired for its people, partnership and performance.
• Mission of Chevron: Our company’s foundation is built on
our values, which distinguish us and guide our actions. We
conduct our business in a socially responsible and ethical
manner. We respect the law, support universal human
rights, protect the environment and benefit the communities
where we work.
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Financial Map of Chevron
Upstream Segment Earnings
20$ billions
Upstream Segment
Assets 180$ billions
Upstream Revenues
75$ billions
Downstream Segment
Earnings 2$ billions
Downstream Segment
Assets 231$ billions
Downstream Revenues
195$ billions
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91%
9%
Segment Earnings
Upstream Downstream
29%
71%
Segment Sales and Operational Revenues
Upstream Downstream
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SWOT Analysis of Upstream
• Strengths:• Massive Oil Reserves in comparison with other competitors
(11 billion barrels)
• Access to unstable areas to produce oil and gas such us
Kurdistan of Iraq and Nigeria
• Geopolitical player, more specific geoenergy player
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• World’s largest holder of deep water(area
of continued growth) acreage in Gulf of
Mexico and Nigeria
Chevron Upstream Assets
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Weaknesses
• Cost of environmental hazards
• Legal Issues
Oil Spill in Brazil from Chevron Rig
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Opportunities
• Focus on development of shale gas wells in
China, USA, Mexico and Argentina the first four
countries which have the biggest shale gas
reserves
• Merge and acquisitions with National Oil
Companies
• Discovered enormous oil and gas field all around
the world
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• Technology R&D innovation in the field of
exploration of methane hydrates
• Strategic alliance with JOGMEC (Japan Oil, Gas
and Metals National Corporation) and Baker
Hughes
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Threats
• Government environmental and taxation
legislation
• Cost of production and exploration of oil and gas
wells
• Low global economic growth
• High competition
• Geopolitically instability
• Over Debt countries globally
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SWOT Analysis of Chevron
Downstream Sector• Strengths:• Well placed in Asia- Pacific area because
Chevron owns 12 refineries and 1 chemical
factory in this area
• Marketing network supports retail outlet on 6
continents
• The company ranked 1th in 2012 on the Refinery
Utilization among all of the competitors (refinery
capacity)
• Chevron chemistry sector, such as Chevron
Phillips and Chevron Oronite
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Weaknesses
• Cost of environmental hazards, due to gas flaring
from refinery activities and dangerous accidents in
Chevron refineries such as explosions
• Legal issues
• Decreasing in US and International Refined
Product Sales
• Decreasing in Worldwide Downstream Earnings
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Opportunities
• Decreasing oil prices, reduce the cost per barrel
for the refineries
• Expand our refinery portfolio near to
unconventional resources, such as shale gas and
methane hydrates.
• Focus on development of the refineries in Asia-
Pacific
• Strategic alliance with major National Oil
Companies in Asia-Pacific area which owns a lot
of refinery assets in the area
• Customer trends for more friendly and clean fuels
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Threats
• Security issues. Such as terrorist attacks or
asymmetric threats
• Geopolitical instability
• Government Environmental and Taxation
Legislation
• Increase of natural gas share in global energy mix
• National Oil Companies, political influence and
ownership of the global oil reserves
• Low global economic growth
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CPM Matrix for Chevron Critical success factors Chevron Exxon Mobil Shell
weight Rating Score Rating Score rating score
Advertising 0.20 3 0.60 3 0.60 3 0.60
Product quality 0.10 3 0.30 4 0.40 2 0.20
Management 0.07 4 0.28 3 0.21 3 0.21
Financial position 0.10 3 0.30 2 0.20 3 0.30
Customer loyalty 0.05 2 0.10 3 0.15 3 0.15
Global expansion 0.20 3 0.60 4 0.80 4 0.80
Market share 0.09 3 0.27 3 0.27 4 0.36
Geopolitical Influence 0.15 3 0.45 3 0.45 3 0.45
Production capacity 0.04 3 0.12 3 0.12 4 0.16
Total 1.00 3.02 3.20 3.23
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Grand Strategy Matrix for
Chevron
• Chevron has 8% annual growth the last 4 years since 2009
and chevron CPM evaluation score is 3.02. According to
these statistics chevron is located in Quadrant 1.
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The Internal-External Matrix
for Downstream and
Upstream Chevron Sector
• IFE Score of downstream is 3.11 and the EFE Score is 3.03.
The downstream earnings represent the 9% of total
segment earnings.
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• IFE Score of upstream is 2.83 and the EFE Score
is 2.64. The upstream earnings represent the 90%
of total segment earnings
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SW
OT
Ma
trix
of
Up
str
ea
m
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SW
OT
Ma
trix
of
Do
wn
str
ea
m
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Conclusions and Proposed
StrategiesDownstream:
• Influence local communities, develop a stable
environment and create long-term sustainability
• Penetration in lubricant and petrochemicals
sector
• Invest in downstream sector by supporting and
advertising the brand name in the EU countries
• Forward integration in refinery sector with
introduction of new technological advantages
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Upstream:
• Opportunity to penetrate in the Chinese gas
upstream industry
• Exploration and Production of methane hydrates
• Cooperation with geopolitical institutions such as
Stratfor and The Global Policy Institute (London
Metropolitan University)
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Thank you for your
attention• Any Questions?