Watson, mere minutes ago, following 2015 Q4 results,... "We're taking significant action to improve earnings and cash flow in this low price environment," Chairman/CEO John Watson says, as 2015 operating expenses and capital spending were reduced by $9B from 2014, with "similarly large reductions" anticipated in 2016; asset sales totaled $6B in 2015, with more sales planned for 2016 and 2017.
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Yea, verily,... oil will rebound. Only difference, this time, is,... there are more players in the production game. Many OPEC nations are cratering (Venezuela, Nigeria, Libya, Algeria, Ecuador, etc., and are begging the Saudis to reduce production), others are joining the game, but because of internal fractures, are unable to exert the necessary control over their entire nation-state (Iraq, for example), and Iran, whom, even though will potentially add an additional 500,000 bbls/day to world supply, will not likely be able to sustain that volume, simply because their field integrity, support, and infrastructure requires almost immediate inflows of Western finance and expertise. U.S. shale production, because there is no centralized (God help us, if there ever is) control will respond to higher prices with increases in production. That leaves the Saudis and Russia. And while Saudi Arabia can endure low prices, for awhile longer, Russia can not. So, it may be the Russians who end up being the most willing "player" to control production in order to boost prices, although, I've read that Iran, even though it's cost of production is pretty low, requires oil prices in the range of $120/bbl in order to fund their generous internal programs, as they currently face an irate and potentially unstable population that has grown tired of the austerity forced upon them by the Mullahs. So,... seems to be plenty of motivation to get prices under control (ie., "higher"), but may be a bit like trying to herd cats, to make it happen.
Cjl - you will have a job at CVX
Seems the only one that gets it.
Somebody needs to punch Watson in the face. Wake up, asshole. The dividend is ruining this company.
When our earnings are nonexistent, our bond rating falls, we borrow money to pay dividends, we fail to complete MCPs like Gorgon (should we rename it Albatross?), we try to divest once- valuable assets for pennies on the dollar and fail to close those divestment deals, and layoff professionals in whom we have invested 100s of millions in training and development towards the future, we have entered the terminal vortex known better as the death spiral. Chevron is on its way to going belly up. When accountants and lawyers run the company, it is all but over. Time for new leadership before it is too late to recover from the tailspin.
Is the 4000+ jobs you all are talking about in addition to the ones we're about to cut in the ESP? Just wanting clarification
You do what you have to do. You make less money, you reduce the cable bill, monitor your expenditures. Sometimes you have to sell stuff (campers / summer houses etc) to make ends meet. The only real variable expense is labor and contract work. Contract work (rigs / labor personnel) have already been hit solidly. The only real recourse is reduction in manpower to sustain business. As it stands - there is not enough income to support the dividend, very significant reductions are obvious in this prolonged low price environment. Watson has communicated widely that the world would support a $100/bbl price but that has not been the case recently. It's anybody's guess where price will normalize in the future. But for now - history repeats itself with mass reductions of the labor force. Oil will rebound - it has rebounded historically. Taking a very long time for oil to inch up again. As one poster mentioned earlier, Chevron is at will employer. There are no guarenteed jobs anywhere regardless of how smart you are or think you are. Profitable businesses drive employment. I wish everyone the best.
Selling oil and oil-related real estate at this time is draconian. CVX will only get pennies on the dollar. This shows that the oil glut is going to be long, otherwise they would hold onto the assets for a couple of years. The 4,000 more employees cut, makes sense, they are only expenses. The price of new hires is dropping with the price of WTI.
The call was worse than doom and gloom. There is no hiding now. North America cuts 4,000 plus jobs.
Yup, the storm is sure to hit in 2016.