Chevron Chairman Ken Derr Cites Company's Recent Progress
CHEVRON CHAIRMAN KEN DERR
TOWARD STRATEGIC GOALS
NEW YORK CITY, Dec. 19, 1995 -- Chevron Chairman Ken Derr told a meeting of financial analysts here today that Chevron has made great strides in the second half of 1995 toward improving shareholder value and reducing the company's already competitive cost structure.
"From our historic foundation of strong oil exploration and production to improvements in U.S. refining and marketing, we are continuing to make substantial progress in many areas," Derr said.
"Our stock price reached an all-time high last week," Derr noted, "and we hope our stockholders will continue to value Chevron as a company well prepared to deal with the challenges of the global marketplace well into the next century."
Derr told analysts that Chevron has had its most productive year of oil discoveries in 15 years, based on the projected reserves from a number of key wells. Among the most promising areas he cited are:
- A new discovery in the Congo, Moho Marine 1 announced last month, which is one of Chevron's largest discoveries in West Africa, Derr said. The field appears to be geologically similar to nearby N'Kossa. The N'Kossa field is on track to begin production in mid-1996, with peak production of 110,000 bpd expected in late 1997. Chevron's share is 30 percent.
- Several promising areas in Northwest Australia, where Chevron and partners have made major discoveries and added new production. Last month, the Wanaea and Cossack fields began production and are scheduled to reach design capacity of 115,000 barrels a day in the first quarter. Huge gas discoveries at Chrysaor and Perseus were also announced in the past year.
"One of Chevron's enduring strengths is our ability to find oil and gas, and we are completing an exceptionally good year of new discoveries," Derr said. "In addition to this, we expect to replace more than 110 percent of our 1995 liquids production when final figures are in."
Also in the exploration/production area, Chevron announced last week a major alliance with Maraven of Venezuela to further develop the huge Boscan oil field and supply heavy crude oil to U.S. refineries.
Several company businesses have recently announced restructurings to reduce costs, improve efficiency and to meet strategic intents, Derr noted, including:
- Chevron Chemical Co., which announced a restructuring last week along geographic lines, forming a new International Group as well as a U.S. chemicals division. The action supports the chemical company's strategic intent to improve competitive financial performance while developing attractive opportunities for growth, Derr said.
- U.S. products marketing announced this month a consolidation of regional offices and support functions, reducing costs $8 million per year and supporting greater customer focus. U.S. refining also has a new management team charged with achieving incident free operation while reducing costs. The U.S. refining/marketing operation is working diligently to achieve top financial performance, Derr said.
- The business activities of Chevron International Oil Co. are being reorganized, as announced early this month. As part of the change, the company's international lubricants business will be consolidated with the U.S. business into a new Global Lubricants unit.
Another major step was taken by Caltex, Chevron's 50-50 joint venture with Texaco, which is a major refiner/marketer in Asia. Caltex recently announced the $2 billion sale of its 50 percent interest in a refining company in Japan, where markets are mature, in order to focus more on growth areas such as China and India. The action supports the strategy of growing Caltex in attractive markets, while achieving superior competitive financial performance.
"Our business units are progressing on many fronts to increase shareholder value and strengthen Chevron's performance in this competitive industry," Derr said.
Updated: December 1995