There are various circumstances under which
CEOs leave a company-- especially those who have held the
position for a relatively long time. At
Chevron (NYSE: CVX), the second-largest
U.S.-based oil and gas producer, the newly announced
resignation of its top man, David O'Reilly, at year's end
appears to engender wishes that, given the job he's done, he
might remain a bit longer.
After all, Mr. O'Reilly, at 62, is still three years short
of his company's mandatory retirement age. And after a decade
at Chevron's helm, he has a number of accomplishments to
point to. But then, the company appears to have a capable
successor in John Watson, who, during a nearly 30-year career
with Chevron, has become Mr. O'Reilly's confidant -- along
with carrying the more formal title of Chevron's vice
chairman.
Perhaps Mr. O'Reilly's most noteworthy accomplishments
were a pair of significant acquisitions. I'm referring to the
2000 purchase of Texaco, which set Chevron back $35 billion.
And then in 2004, Chevron spent $18 billion to buy Unocal,
which at the time was being chased by
Chinese offshore oil company
CNOOC (NYSE: CEO).
And just recently, the final go-ahead for the massive
Gorgon gas projectin Australia, in which Chevron has a
half interest and of which it is the operator, was received.
ExxonMobil (NYSE: XOM) and
Shell (NYSE: RDS-A) share the remaining
Gorgon interest.
But the company has had to clear some hurdles as well,
including the nationalization of energy in Venezuela, which
stripped half a dozen big oil companies, including
Statoil (NYSE: STO),
Total (NYSE: TOT), and
BP (NYSE: BP), of their Orinoco basin
operating positions before turning those positions over to
PdVSA, the nation's state oil company.
And then there's a pending
lawsuit in Ecuadorthat may be completed before Mr.
O'Reilly's departure. The suit attempts to hold Chevron
accountable for purported environmental damage by Texaco long
before its acquisition by Chevron.
But all in all, Chevron appears to be in excellent
condition. It expects to cease U.S. natural gas drilling by
year's end in the face of current the glut of hydrocarbon.
But beyond that, it's busy uncovering oil and gas across the
world with an anticipated production growth of 5%, better
than even Big Oil top dog Exxon.
While Mr. O'Reilly was born and educated in Ireland and
came up through the engineering ranks, Mr. Watson is a
financial type. However, it's difficult to image that the
company will change appreciably once the torch is passed. To
my way of thinking, Chevron will continue to be a well-run
company that is deserving of Foolish attention.
Chevron wears four stars as awarded by
Motley Fool CAPSplayers.
I suggest you add your assessment
of the
company.
This article was originally published as
A Strong Chevron Should Remain That Wayon
Fool.com
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