The factory model is progressing in sprints and there is now talk of how the org looks to support this new model. The question is how long it takes for Chevron to execute this. Any thoughts?
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@4pxe: Yes! You probably didn't know that your post exactly describes MCBU... and AMBU (RIP).
We need super cheap rigs and lightning fast drilling to get costs down.
Factory Model is what you do when you have a legion of hollow-degreed minions being managed by unaccomplished mid-career technical washouts. You may not accomplish anything new or better, but at least you can point to a recipe book for mediocrity.
@4ijo: "...We don’t have the seismic or drilling technology to succeed." The funny thing is, we DID have the technology to succeed, but then diversity and social initiatives were put in place, tecnhnical initiative went to zero, risk-taking went to zero, and the money shifted to either the Permian or the dividend or stock buybacks.
If we could cut GOM well costs by at least 90% that would help a lot.
GOM will have moved on past two more buzzword cringe strategies by the time they figure anything out.
GOM has trillions of barrels, we just can figure out how to produce them and make money. gOM needs a new paradigm like Permian.
@4ijo, I hear you. And without GOM and those assets most of CVX in the US might as well pack it up and go home, massive ROM, RIF, Reorg, whatever you want to call it. Dust off the old resumes boys & girls. And on top of all that you have the JB created recession to deal with. Good luck to all.
Anchor, Ballymore, whale, Tahiti, mad dog, and all the rest of the GOM assets are marginal at best. We never should have entered deep water. We don’t have the seismic or drilling technology to succeed.
GOM is a prime example of the company's loss when the boomers left and took all their expertise with them. As mentioned, Anchor and Ballymore were the last significant discoveries, both boomer prospects. Not a stitch of any significant activity since then, only piddling little NOJVs where Shell calls all the shots, and farming-in minority %s into other companies' satellite projects that would have been laughed out of the room prior to 2015. Not surprisingly, the BU is populated with pompous millennials and self-entitled Gen Z'ers.
Minimal drilling?!? GOM has not discovered anything since Ballymore which is just a 3 well tieback. Anchor was the last meaningful discovery and it's less that a dozen wells. Why should the operation funnel money into the GOM black ho-e?
GOM exploration is so poor at finding oil they’ve resulted in looking at pathetic DROs that CVX or other companies walked away from.
GOM's success left with the Boomers in 2020 (it started in 2015), and lost its allure in the company when MW fell in love with the Permian.
The exploration budget has been plundered the last few years. We are down by more than 50% versus a couple years ago. Minimal drilling. What do you expect?
Deepqater GOM never made economic sense for industry nor Chevron. When you add up the total costs of exploration to abandonment a few 500 million barrel fields just doesn’t cut it. Competitors are developing multi billion barrel fields elsewhere.
Chevron deepwater (DWEP back then) was the envy of the industry around 2005. Big discoveries, a deep lease inventory, and an experienced, eager team of petrotechs. Fast forward to 2022, GOMBU is headed by millennials who couldn't make the shelf profitable, with a staff of entitled Gen Zers who all expect to be EVPs within ten years. No wonder they have to go to the 'factory model' (a euphemism for 'liquidation model') as their future.
Chevron doesn't need any exploration success, digital is the future and will save us. Get rid of all the experts - automate workflows with machine learning.
Hail agile, digital, and triple crown !
@1izz, moving GOM to factory model is prime indication that current staffing and management couldn't find any new oil if their careers depended on it. (No surprise, they couldn't find any on the Shelf before it was sold, and haven't found a drop since they took over the deep water.) Now their always trend-following management is willing to buy 2-3 years of time with the "factory model" to drain Tahiti and the Perdido assets. As for new reserves, add in Mexico, Egypt, and Suriname as busts. There's nothing else on the horizon, Chevron exploration will be a thing of the past by 2025.
@1qpc: what transition? Other than some token greenwashing projects (cow manure?) Chevron is still acting as a 99.9% oil company, although the company is now just coasting on legacy assets.
We have more than enough resources for the Transition.
So if Chevron is moving GOM to factory production, west Texas will be played out in five years, Tangiz has plateaued with risky export pipeline, Indonesia & Thailand have left the portfolio, North Sea is all but dead, Brazil is a bust, west Africa is getting played out (ignoring a few new finds by Exxon), and ABU has become a stable cash cow project: From where are the future added reserves?
No discovery in 5+ years. All the people who knew how to find oil have retired.
What else can management do apart from going with the factory model.
@1nfx, yes indeed, you should pack up you things and get ready. At least GOM has a model. How's your resume looking?
The Covington gang, who sold out the shelf and don't have a clue what to do in the deepwater, will solidly embrace the factory model.
"GOM reorg" is just a euphemism for scaling back a failing BU. Headcount reduction, for sure.
@hgv, what's the factory model for your non-productive business unit, K-mart?
Better start packing your things and working on your resume.
Factory Mode for the GOMers will look like Lucy and Ethel, shoving chocolates in their hats in a wild-eyed panic and frenzy.
I hope there aren’t layoffs in GOM as a result of factory model.
"Factory model" is exactly how McDonald's operates. Mindless, repetitive tasks with an endless resource supply (McD, hamburgs. Chevron, top-quality, 'can't miss' drill sites). FM is what you do when you have a resource which no longer has any uncertainty. Another way of looking at it is that FM is what you do when you are draining the resource, not growing it. This is supposedly 'the answer' for UCR, unless, of course, your UCR isn't as good as you thought. While SR may tout the Permian as an example of success, no one will do a look-back on how miserably FM failed in AMBU, where their 'can't miss' drill sites suddenly evaporated.
@nnp, No it is not the Wi--y Wonka Factory that you dream of and would like to be at cupcake, that's for sure, lol.
GOM is definitely not a factory
Reduction in manpower will come naturally once creative people are put in a tight box and asked to do the one task repetitively. It is so boring
The factory efficiencies coupled with lower activity should dramatically reduce required manpower.