The Truth

The Truth is that what we are seeing from Chevron is the inevitable result of having an accountant instead of an engineer at the helm. Watson listens far more to the analysts and Wall St than he does to those of us who actually understand the oil and gas business. O&G is cyclical, more so than most other industries, and while everyone says that, only those of us who have lived in the business for all of our careers really understand what that means. It means that you often have to take a contrarian view and, sometimes, deliver the hard message to your shareholders that, no, they will not be getting a fat dividend for a while, because you need to invest that money into your base business right now. It also means that you don't waste a year of everyone's time and productivity in a painful, prolonged downsizing effort. From a business perspective, I agree that some areas of Chevron, particularly the corporate offices in San Ramon and Houston, had developed a fairly thick layer of fat. However, that is some pretty experienced fat, and, rather than paying for limousines to ferry those folks home from the office because they are distraught after you fired them, they could be far better distributed to some of those failing projects that could really benefit from the help, such as Gorgon, Big Foot, Wheatstone, and a dozen others. Btw, on that note, isn't it funny how the analysts never seemed to talk about or even notice EGTL? It slipped under the radar, somehow, in one of the most impressive vanishing acts that I've ever seen. 15 years and 12 billion USD to build the most complex plant in the company's history, out in the middle of a Nigerian jungle, that may someday produce 30k bbls/day of diesel? And it's STILL not fully online? I don't even need a cocktail napkin to do the math on that one. No wonder Kirkland was pushed out, as that was his pet project.

The Truth is that now is the time to start investing, not cutting the very talent that brought you this far to begin with. Chevron is still sitting on a mountain of cash from the last decade of sustained record commodity prices. GE Oil & Gas, for example, is snapping up companies right and left. Remember the 90s and $12 dollar oil? Drilling rigs were stacked up in the yards, and investment all but dried up. But, what did ExxonMobil do? They went on a drilling frenzy, because they could get the rigs and the best talent for a fraction of what Chevron has been spending for it over the past decade. As a result, XOM's mega-projects of the mid to late 90s came to fruition just as commodity prices took off. Crazy, right? Yeah, like a fox...

The Truth is that in five years, Chevron will want all these people back, and then some, right about the time that the the Board is handing Watson his gold watch and even more golden parachute. Well, guess what boys and girls? They won't be coming back, especially all those bright, young millennial horizons kids that the company invested five years of training in, and who never expected to spend their careers with one company anyway. Chevron's next CEO had better be one tough, bold, and highly experienced oil man or woman, because anyone less will simply continue riding the downward spiral.

The Truth is that Chevron still hasn't proven that they can deliver mega-projects to production. Gorgon is already a year overdue, and it will be a not-small miracle if it even comes online within the next 12 months. Even Chevron's NOJV projects, like ALNG, haven't delivered, and have turned into the butt of the industry's jokes. And, God help them if they have a major leak at CDB, and tons of H2S go rolling down the mountain into a city of 100,000 people. You thought a handful of management staff losing their passports in Brazil over a subsea leak was a big deal? Remember Bhopal, folks? I'm sure the Chinese government will understand...

And, finally, for all of you Chevroid PGPA trolls who are posting on this site about how great your company is, The Real Truth is that Chevron is simply turning itself into an attractive takeover candidate. There is no other explanation for the current executive decisions being made. Nobody, and I mean nobody, regardless of ego, money, power, or fame is that incompetent. Yes, sir, there is indeed a method to the madness. And, yes, Chevron was a great company a few years ago, back when people who actually had an opinion and delivered real results were rewarded for it, but all that is gone now, so wake up and smell the litter box folks. For those of you who are left, take my advice: when you are not submitting glowing CSOC Feedback to your boss, filling your Outlook calendars with nonexistent meetings, padding your PMPs with a bunch of b.s. that you haven't actually done, or walking the corridors of the ivory towers singing "Everything is Awesome", you should be praying that XOM really does take the bait, and start learning about OI rather than OE (look it up, it's on XOM's external website). That may be the only option left to end the suckfest charade, and save what's left of San Ramon's failed attempt to stop the bleeding.

One day you'll thank me for the advice. You're welcome.

Oh, look at this. XOM is up 7% over the last month? Well, how the hell about that?

Comment! It's anonymous!

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I see CBD had a mention in the Cheron discussions well whom wrote about this is correct it's the biggest joke I have worked on in my life if it doesn't blow up I will be surprised . And it's all Cheron Management should be blamed for not kicking some A--- With what was happening there

I've never worked in GOM but I've worked in other locations and have seen SC held to task. I've seen their processes changed due to missed opportunities and their metrics tossed out the window because they drive the wrong behaviors. I've seen their claimed value challenged by an MD and literally cut by 95 percent. What is so unique with GOM that SC can literally turn a standard bearer into a fire sale? I am having a difficult time believing that one department can do all this without any other leader from a different function calling them out on it. For us that do not work there can someone please explain how this is possible because it seems very improbable. Look forward to some examples of how this all happened and how management does not intervene.

GOMBU get rid off the shawn show and the rest of the block heads and send them back to the west coast!

I hate to use names here, but i could not have said THAT any better. The boy believes that he runs the world. He has no clue what he is doing, but has no trouble telling you what YOU and I are doing wrong. Insider @ SCM.

GOMBU: Shawn is this your SCM department? Mike when are you going to send this guy packing?

Sooooo you will find this interesting. Chevron Commissioned a business case study on SC. It looked at cost and efficiency and at the end that the contractor was effective in getting safe work done (competing the task). This was a very good deep dive into our process. They worked with a contractor who was just beginning the navigation side of the Chevron process. They had a person inside the SC team itself and then interviews with frontline and middle management and workers completing the task. It had to be by far the most spot on and damming report I have seen in my working career. 3 Bu's in N. America were in scope for the study that I saw and these studies were mutually exclusive. Meaning they did not share any information between groups nor discuss anything with management until each BU had a final report. What was amazing is THEY READ ALMOST EXACTLY THE SAME. Field management knowing the contractors are non getting the job done, cost overruns and complaining about the SC system not having transparency or a sense of urgency. The review of CHESM was scathing. Stating the process was "disconnected" to the real world work. The SC group did not understand the work and had a hard time understanding the needs of the field. Were not supportive but dismissive and many were expats who had a language barrier and no understanding of modern purchasing!!!!!! It suggested because of the major lack of skills Chevron require that anyone in SC have a certification (CPPM) in English. It stated this would ensure basic understanding of SC and basic English communication skills. The contractors all know there is a approved list and said they think this may cause performance problems (Never them, other contractors of course) in that once your on the list it seems you never get off. Make a major error, have HES issues, questionable finances, it does not matter as they all get called back for more work. My favorite part of this study and it was the constant theme in the 3 reports was of Chevron creating a cloistered, combative and out of touch SC system because the customers (Chevron functions in the field using the contractors) were targeted and, made an example out of by, not just supply chain, but the entire management structure because it is better to be bad than to look bad???????????????????????????????????????????????????????? I can go on and on but it was all there to read. So what did you think of the report GOM? Oh, yea, that's right, it was dismissed and called out of touch and not reflective of how we do business at Chevron. If you are reading this from Exxon, Total, Shell I know you say BULLSHIT! But everyone here at Chevron will nod there head and say yes this is all true and then some. Anonymous133441

You still dont know in any capacity what your talking about. Especially about vendors.

Old fart horizons is only for eng and scm and some it. Other functions have their own development programs. How could it be a horizons person if their function is not part of horizons, did you ever learn anything about chevron, maybe possibly you don't have the capacity to. Have to love these U.S. Ops folks that think they know everything but really just scrape by knowing their own function.

Buahahaha, how is all that real work coming along with out that worthless financing. For all the talk and rhetoric chevron has no idea of what a team is. It takes all kinds of people to get anything accomplished, employees, contractors, services, eng, fin, scm, es, hse, pgpa, legal......when execs all but begged people to execute, we failed them then we start blaming everyone else. Let's hold the mirror up and look into it. If OSRR is right then nothing in San Ramon can impact ops so stop blaming them. If your BU can't make profits in 40 dollar oil then clearly the problem is OSRR's and the like. Why are the execs being blamed for something they can't possibly understand or add value to. You can't be the hero when oil is 100 bucks and not responsible when it's 40. And if I hear anymore about vendors I will puke, ask why we have prescreened preferred vendors....................so OSRR's dadunclecousinbrother (same person btw) does not get fake contracts.

Obviously a post written by a horizons, bright young horizons? thats funny right there. delusional horizons needs a reality check, get your head out of the a** it aint a hat

Ann 482 You really dont know shit about operations. Never worked on a rig. SCM picks the cheapest vendors for us to use strictly on price. We in the field have to deal

with working with junk,not you. As for needing a PhD Indian or Chinese guy,please try not to look like the worst finance guy we have. Take your YELLOW/BLUE self and go back to the "Worthless Department" and study " Who does the upstream and downstream real work that pays your salary".

458 this is 425, i am not saying chevron EEs don't know things or that any other type or resource knows more than the other, in fact looking at the data earth scientist who clearly know a ton and have one of the lowest contractor to employee % in chevron will see a huge cut as part of alpha. This is due to the lack of exploration that is planned due to no fing cash. The problem is the rest of the org is lazy and does nothing. Anything that gets done is done predominately by contractors. Knowing stuff or being smart or any measure of intelligence is not really the question, it's about the overly lazy fat fing shit bags that run around chevron collecting welfare checks specifically in the mcps, SCM, fe, it and various corp depts. and I am sure I am going to get beat up over this but for fs sake if you are an old school rig redneck and f about blaming GOM problems on office staff then you are part of the problem as well. It's not like we keep drilling till oil gushes out and everyone runs around covered in oil having a big love fest. There is a gob of technology that goes into drilling a well and old school does not cut it esp when you are such a douche no one can work with you. Some PhD Indian or Chinese guy ran algorithms against data that told you how deep to drill. And btw I am an real school finance redneck. And for all you supposed O&G professionals the joint account is not a story about the last time you got stoned. So then again maybe our business partners do know more than we will ever.

Good point, 449. I know "engineers" at Chevron who are actually sanitation engineers and fish husbandry "engineers." What does that have to do with assessing a formation or managing a D&C project? Chevron has grown too big, too fast by picking up failing majors such as Gulf, UNOCAL, and Texaco. Then, the Chevron managers purge the leaders from those organizations and replace them with California PC managers.

Name a Chevron employee that worked his ass off to get where he or she is? You won't name one, you f***s never ever worked the days or nights of contractors or in ur words business partners, truth is they know more then u guys will ever know

443 it's the earth scientists not engineers. F***ing douche bag.

Chevron employees are like welfare recipients and the OP seems well versed in collecting his checks. I can remember a handful of chevron and non chevron folks in lekki looking at egtl, final report was not what the engineers wanted and those poor fools were on the next bus ride to the airport. Engineers, get the f*** out of here.

Anonymous 157425 you are an idiot. Nothing of value? Who the hell do you think it is that finds the damn O&G that makes the MCPs possible? It sure as hell isnt accountants, vendors, contractor bird-dogs, MBAs, or facilities engineers! Yeah we took a gamble. A stupid gamble that left us severely exposed. And now the people that find the resource are getting laid off because of the exposure. And when things do turn around, we will drill a lot of dry holes because of lost expertise.

Spot on. The Facility Engineer "managers" are just sitting back collecting $160,000 to approve invoices by the contractors. The same with CBRES managers. Engineers involved in JOAs want to push the project forward so they can meet in Paris or Buenos Aries, stay in 5-star hotels and push the project forward without care or even knowledge if the reservoir is a viable project. The corporate buzz words fly and the decision review board continues to meet every month for over two years without any sense of urgency. The PowerPoints are even put together by contractors and look like sophomoric C+ assignments in undergraduate managerial accounting. Hardly any of the HSE, HR, and Project Managers are MBAs. As a percentage of Chevron's workforce, MBAs are a rarity. Not so at ExxonMobil and Shell.

The basis of this post is as flawed as chevrons project execution. Yes the current ceo is from the finance MBA development program which does not make him an accountant and Kirkland was an engineer. All these projects started long before Watson and will continue to drain chevrons free cash probably longer than Watson has left at the helm. The strategy that the execs put forth was not wrong, it was a gamble on the ability of our people, processes and partnerships all of which failed specifically the people. Ok fine maybe not you holier than thou engineer but let's be real who the heck at chevron does anything but ghost around and maybe manage a contract.

Either get rid of the employees or the contracts/services. How many people get paid 160,000 plus to do nothing but liaise with contractors? If you are on an mcp that is all you do, all the other meetings you attend where you cook the numbers to get the dpi needed or mitigate the risk away with words and magic shows is not real work in fact it is a crime. And seriously what is with the number of facility engineers, there are specialists that do nothing but choose 3rd party services and they are all making bank rolls while the vendor does all the work to include the engineering. Hire an admin and get rid of 75% dead weight. If I am wrong please opine with whatever value added work you did this year or decade. I'd be surprised if 4 people had anything of value to write about. How about this, everyone in chevron show up to work on Monday and do one thing of value, something that adds more money to chevron than what you earned. Then repeat until you retire. But hey as it stands we have a company that does a good job of taking care of people, why don't you all try to take care of the company you leeches.

Oh, absolutely 367! More business managers! Yes! That's exactly what a technology driven company needs, future CEOs! Let's also beef up the SCM group too, even though they don't actually manage the supply chain anymore. And, while we are at it, how about adding more bodies to HES, HR, Legal, PGPA, Finance, and...and...and..., Oh, wait. That's what we have now. Hmmmmmm..... You may want to rethink that a bit, 367. As for me, I'm going long on hot dogs...

Chevron is failing because of a void of business managers. The "scientists," i.e., engineers with no sense of profit and loss, budgets, market research, or even management of people are running the bloated underbelly of the corporation. Quite frankly, the engineers would have trouble running a hotdog stand, let alone a D&C project.

OP - good, very true post. Thank you for mentioning EGTL, everybody seems to forget about that colossal mess.

To TLTR, agreed, it probably is too long. I forgot that a number of potential readers are from the soundbite generation.

OP ......... TLTR

Take a good look around .... The ones who get ahead are those who are able to sell their version of the results and truth. They are able to package it in a way that is digestible. When these so-called successes are repeated enough times they become facts. That is why exaggerations and inaccuracies should be called instead of staying quiet for the sake of not pissing the other off.

OP, Bhopal is in India not China. You made a good point anyway.

might not be that pretty.....we build the refineries in these countries and then they run us out. ..but I do have 1 complaint about chevron,the people they hire where I work in chevron are always best friends girlfriends or relatives are not qualified at all.college educated people are overlooked and passed on by..even the plant mangers son gets hired over people who worked there for many years.but its been coming back at them lately with oil spills and numerous mistakes..its best you keep your mouth shut where I work ,I care about chevron but its not run by very smart people..i think the whole world is in a mess right now.when the us turns its head away from bible teachings its asking for trouble.if iran gets a nuke I hope it lands right on my head.,,,,,,,, cofused in texas

Never say never. Who would have thought that a one term African American senator from Illinois would next become a two term president?

The Exxon Chevron merger is a tool to prop up Chevron stock. The SEC will never let it happen.

To Anon572,

First off, congratulations on your career. Chevron has taken good care of a lot of people over the decades, including me. I have no regrets, either, and I hope you indeed get to punch your ticket and go home, rather than be sent home. However, I also took very good care of the company, as well. It's reciprocal. At the end of the day, The Truth is that it is a business, plain and simple, and anyone who really believes it is anything more than that is fooling themselves. There may have been a genuine family element to legacy Gulf or Unocal, but even they were businesses; more to the point, they lost. That's not a bad thing or a good thing, it simply is what it is. I'm not bashing Chevron, just stating some very well known facts. I could go off on the company about Ecuador, as well, but The Truth is that, while Texaco did make some mistakes there, the current case is simply without merit and completely corrupt.

Secondly, never say never. The three largest O anyone who has suffered through CPDEP run projects can testify to that.

In any event, watch this space...

XOM merger will never happen. Chevron has taken care of me and my family for 30 years and I have no complaints. Sure the company has some problems but just like in the past they will solve those problems and will be stronger than ever! When I do punch my ticket and go home or get sent home, I have no regrets only thanks for having me!

Good post.

Thread regarding Chevron Corp. layoffs

The Truth

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