ChevronTexaco to boost North America E&P performance
Posted: 10 December 2003
ChevronTexaco plans to sell its interests in additional non-strategic
producing properties in the United States, re-align strategic business
units and evaluate opportunities to divest selected producing and
midstream assets in western Canada.
The plans support ChevronTexaco's drive to improve competitive
performance and increase operating efficiency in North America.
The planned divestitures are part of ChevronTexaco's ongoing North
America portfolio optimization program announced earlier this year.
Longer term, the company expects to retain about 400 core fields.
"We're building a focused and efficient portfolio of assets
composed of strategic core fields that represent the vast majority
of our long-term value in North America," said Ray Wilcox,
vice president of ChevronTexaco and president of ChevronTexaco Exploration
and Production Co.
"These efforts are part of our strategy to maximize and grow
the value of our base business. We expect to retain nearly all of
our current earnings, cash flow and resource base, and to improve
our overall competitiveness."
The U.S. properties for sale are located in 15 states and the Outer
Continental Shelf of the Gulf of Mexico. They represent more than
60 percent of ChevronTexaco's total U.S. properties but only 5 percent
of daily production. Most of these properties are non-operated joint
ventures and royalty-only interests.
Canadian assets being considered for divestment consist of mature
producing fields and midstream assets in western Canada currently
producing 35,000 barrels of oil-equivalent production per day. The
decision does not affect strategically significant assets, which
include: the Athabasca Oil Sands Project, MacKenzie Delta gas, East
Coast Canada exploration, development and production activities,
or the company's refining and marketing operations.
In addition to portfolio optimization activities, the company is
announcing organizational changes to improve efficiency and focus
that will result in some office consolidations. The Permian Business
Unit, located in Midland, Texas, and the MidContinent Business Unit,
located in Houston, will be consolidated and headquartered in Houston.
However, some functions directly linked to operational needs will
continue in Midland. The Deepwater Gulf of Mexico Business Unit,
currently based in New Orleans, will become the Deepwater Gulf of
Mexico Exploration and Projects Business Unit and will focus exclusively
on exploration and major deepwater development projects. It will
be co-located with other ChevronTexaco worldwide deepwater and technology
groups in Houston. Gulf of Mexico operations will continue to be
located in Louisiana (New Orleans and Lafayette) and will manage
all of ChevronTexaco's operating activities in the Gulf of Mexico,
including deepwater.
The divestment program and office consolidations are expected to
be completed in 2004. An estimated 150 to 200 jobs will be eliminated
directly or indirectly as a result of the portfolio decisions in
the United States. Personnel impacts in Canada will be determined
based on the ultimate actions around the disposition of the western
Canada producing and midstream assets.
The company expects to record charges against fourth quarter earnings
for the write-down of these selected U.S. assets that will be offered
for sale, as well as for estimated employee termination benefits
associated with these asset sales and office reorganizations. These
charges are not expected to be material to total corporate earnings
for the quarter. Asset dispositions during 2004 could result in
net gains that are material to the company's earnings in any single
period.
"ChevronTexaco will remain the No. 1 producer in California
and the Gulf of Mexico Shelf," said Wilcox. "We're the
No. 2 producer in the Permian Basin and the No. 3 natural gas producer
in the United States, bolstered by our strong MidContinent gas production.
We will continue our strong leadership and commitment to the communities
where we operate. These changes will enable our workforce to realign
and focus on opportunities that can add the most value to ChevronTexaco
and its stockholders," he added.
Headquartered in San Ramon, Calif., ChevronTexaco is the second-largest
U.S. energy company and the fifth largest in the world, based on
market capitalization. More than 53,000 ChevronTexaco employees
work in approximately 180 countries around the world, producing
and transporting crude oil and natural gas, and marketing and distributing
fuels and other energy products.
For more information see http://www.chevrontexaco.com/.
Posted by Richard Price,
Editor Pipeline Magazine
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