SJV still going through MFO. They released first phase results which indicates deep cut in projects, production, maintenance. Any news or expectation on the new org coming soon?
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Email today hinted at a <10% cut but they left door open for more. Any thoughts on how bad this might actually be?
Basically the last VP did “Transformation” and it was such a huge success (not really) that he received a promotion! New VP just joining in on the new “Integration” and will take a great pat on the back and move on to the next promotion. They run through here roughshod like natural disasters and would you believe that they don’t even clean up after themselves before they are gone!
You must have missed that fact that by 2017, production had dropped 100,000 BPD since the CHV-TX merger while a series of VPs increased headcount. That reorg had to happen. The real factor that is slowly whittling away SJVBU is that the best wells have been drilled and you can’t even get a permit for the remaining opportunities. Sad but true.
A new leader doing a re-org on the heels of another re-org is to be feared as they are likely reckless and incompetent.
No surprise. After the least competent area (WCC) performed a hostile take over of the BU during the “2020 reorg” it was destined for failure. Maybe a reorg will actually improve the business as couldn’t get much worse.
No one would buy what is left. Harvest mode and use the cash to abandon everything.
The problem comes when we hold an asset too long and the net present value of the asset is negative because the asset retirement obligation exceeds to remaining value from production. When prices pop, like now, it can briefly bring us above water and a sale can be made which saves us from our stupidity of holding on too long.
Chevron and most companies for that matter require upfront payment of P&A liability. This is their insurance when they sell
Not a surprise. "Reorg" is a cover story for gradual shutdown if no buyer can be found. Wells getting plugged is a tip-off. Petrotechs gone, PEs and REs will be around to shut off the lights.
At $100 dollar oil, they aren’t selling Jack! They will milk that dilapidated cow til there is nothing but a rug leftover! No cuts will be made at the bottom of the barrel because they are the ones doing the work. There is plenty of time left.
It’s not a Reorg…..it is called “Integration”! All in all, changes will be made. We will see in about a month.
Our California version of Ecuador. Shut it down.
Keep producing SJV until the environmental penalties outweigh the production income. The whole thing is now just an environmental liability that would cost CVX more if sold than just hobbling it along. GOM shelf is an excellent lesson in “jo--t and several liability”…CVX can write any legal language it likes into a sales agreement, but we will still be held liable when/if the purchaser goes bankrupt. No matter how you slice it, not a great environment to work in.
Agreed on the flattening. Except a couple layers of middle management to go. Rank and file will be cut 10-20%. Sale is possible as business and business climate are poor plus heavy oil no longer makes sense.
Get SJV in shape for the sale. Get rid of that garbage.
Exit that state and let’s move on.
We told you about SJV for a long time
Its kind of on you now.
This is very similar to what if happening to the economy. While people blow money they don’t have on cr-p they don’t need expect a correct to not only people spending but also company spending.
Anyways give it two years and let’s see
Two things forsure. Higher management won’t be touched but it will be flattened sacrificing first line supervisors. So if you are a leader pack your bags and jump ASAP. For individual contributors my guess at least 30% reduction