Chevron Press Release - Chevron Chairman Calls For "Responsible Growth" As Global Oil Industry Expands
BEIJING, Oct. 16, 1997 - The bullish outlook for oil demand promises a period of sustained growth for the global oil industry, but the coming expansion will require an industry-wide commitment to cleaner, safer and more sensitive operations around the world, the chairman of Chevron Corp. told the World Petroleum Congress here today.
"Our daily environmental performance has a major influence on how world leaders view fossil fuels," said Ken Derr, chairman of the board and chief executive officer for Chevron, addressing oil-industry leaders at the congress, held every three years since 1933. "And every mistake we make gives people another reason to believe our industry is not worthy of growth. The only acceptable growth - indeed, the only legitimate growth - for our industry will be responsible growth."
Derr also highlighted Chevron's growing relationship with China, including established offshore exploration and production, a major gas-liquids terminal project and other enterprises via Chevron's Caltex Petroleum affiliate, a planned polystyrene plant and a new onshore exploration agreement to test deep layers beneath the mature Shengli oil field.
The congress drew 4,600 delegates from 91 countries. In a wide-ranging speech to close the four-day event, Derr:
- called on world leaders to "separate facts from speculation" on the issue of global climate change, to recognize that for many countries, "oil and gas are the core assets of the national economy," and to make decisions which "respect the needs of every nation north and south;"
- discussed the oil industry's heavy and growing reliance on technical innovation and the outlook for funding, managing and "sourcing" technology at a time when cutting operating costs remains an industry-wide imperative;
- emphasized the critical importance of long-term partnerships in today's "anxious and crowded" global oil industry, saying that oil-development partnerships which are focused both on performance and reputation "will become a primary mechanism to help the oil industry re-invent its public image."
- encouraged oil companies throughout the world to exchange tools and strategies to improve overall industry performance in environmental protection, safety and community relations, saying, "sharing is the path to the unified focus we need."
- predicted that the oil industry by the year 2000 will be "performing better than at any time in its history."
Derr said many experts are forecasting flat oil prices in real terms over the next 15 years, and they see oil demand during that period growing to nearly 100 million barrels a day from the current level of about 70 million barrels: "We have every reason to believe we stand on the threshold of a great expansion," he said.
Oil prices have generally been flat since the oil-price crash of 1986, and have "provided tremendous counter-inflationary benefits for people and businesses all over the world," said Derr. "Our industry spent the 1990s learning how to be successful without high oil prices, and proving we don't need high oil prices in order to grow the industry. These last 10 years were difficult, but they have prepared us well for the next 20."
Derr said that people worldwide want both a healthy environment and economic growth, and that governments everywhere know the oil industry provides "the fuel for the locomotive of global economic progress.
"Further, our customers want our products, they value them and the outlook says they'll want more," he said. "But this is no time to be overconfident, because our ability to grow depends heavily on the quality of our global reputation. Our industry is a world citizen with a proud heritage of stewardship over vital resources. But we have to do more to demonstrate that we're worthy of that role.
"Our critics will no doubt continue to portray us as a 20th Century industry destined for decline," said Derr. "But the reality is, we're a 21st Century industry, and we're destined for growth. By managing our reputation, by taking maximum advantage of technology and by building superior partnerships, I believe we can overcome the challenges we face."
Discussing climate change, Derr said, "The more we study this, the more uncertainties we find, and the less the predictions make sense. Climate change is being marketed as an urgent reason to shift fossil-fuel use from overdrive into reverse, yet we still don't know the costs of trying to reduce global energy consumption. No issue faced by our industry is more divisive or distorted, and nothing we do should encourage the world to start phasing out oil if there is no valid reason to do so."
Chevron, based in San Francisco, is an international energy company engaged in oil and gas exploration and production, oil refining, fuels and lubricants marketing, chemicals manufacturing and coal mining.
Note to Editors
For a copy of Ken Derr's Oct. 16 speech, "On the Threshold of Growth: Competitive Imperatives and Critical Challenges for the Global Oil Industry," contact Chevron Public Affairs at (415) 894-4246. Copies are available in English and Chinese. The full text of the speech is also available on the company's Website, www.chevron.com, in the Newsroom section.
Updated: October 1997