Presentation of Strategic Analysis of Chevron,

1. Athanasios Pitatzis, Nikolaos D.Ntintas,
Stelios Veisakis, Aikaterini Souvatzoglou,
Evangelia Margoni
MSc Oil and Gas Technology
Eastern Macedonia and Thrace Institute of
Technology
School of Engineering Technology
Department of Petroleum & Natural Gas
Technology
Strategic Analysis of Chevron

2. Presentation’s Contents
• Chevron history and basic information
• Financial Data of Chevron Upstream and
Downstream Sector
• SWOT Analysis of Upstream-Downstream
• CPM, Grand Strategy and IE Matrix
• Proposed alternative strategies

3. About Chevron
• Second-largest integrated energy company headquartered
in the United States
• They involved in oil, gas, and geothermal energy industries,
including:
– Exploration and production;
– Refining, marketing and transport;
– Chemicals manufacturing and sales
– Power generation
• Sales and other operating revenues – $220 billion, Net
Income $21 billion
• 64,500 employees, including more than 3,200 service
station employees

4. Vision and Mission of
Chevron
• At the heart of The Chevron Way is our vision…to be the
global energy company most admired for its people,
partnership and performance.
• Mission of Chevron: Our company’s foundation is built on
our values, which distinguish us and guide our actions. We
conduct our business in a socially responsible and ethical
manner. We respect the law, support universal human
rights, protect the environment and benefit the communities
where we work.

5. Financial Map of Chevron
Upstream
Segment
Earnings
20$ billions
Upstream
Segment
Assets 180$
billions
Upstream
Revenues
75$
billions
Downstream
Segment
Earnings 2$
billions
Downstream
Segment
Assets 231$
billions
Downstream
Revenues
195$ billions

6. 91%
9%
Segment Earnings
Upstream Downstream
29%
71%
Segment Sales and
Operational Revenues
Upstream Downstream

7. SWOT Analysis of Upstream
• Strengths:
• Massive Oil Reserves in comparison with other competitors
(11 billion barrels)
• Access to unstable areas to produce oil and gas such us
Kurdistan of Iraq and Nigeria
• Geopolitical player, more specific geoenergy player

8. • World’s largest holder of deep water(area
of continued growth) acreage in Gulf of
Mexico and Nigeria
Chevron Upstream Assets

9. Weaknesses
• Cost of environmental hazards
• Legal Issues
Oil Spill in Brazil from Chevron Rig

10. Opportunities
• Focus on development of shale gas wells in
China, USA, Mexico and Argentina the first four
countries which have the biggest shale gas
reserves
• Merge and acquisitions with National Oil
Companies
• Discovered enormous oil and gas field all around
the world

11. • Technology R&D innovation in the field of
exploration of methane hydrates
• Strategic alliance with JOGMEC (Japan Oil, Gas
and Metals National Corporation) and Baker
Hughes

12. Threats
• Government environmental and taxation
legislation
• Cost of production and exploration of oil and gas
wells
• Low global economic growth
• High competition
• Geopolitically instability
• Over Debt countries globally

13. SWOT Analysis of Chevron
Downstream Sector
• Strengths:
• Well placed in Asia- Pacific area because
Chevron owns 12 refineries and 1 chemical
factory in this area
• Marketing network supports retail outlet on 6
continents
• The company ranked 1th in 2012 on the Refinery
Utilization among all of the competitors (refinery
capacity)
• Chevron chemistry sector, such as Chevron
Phillips and Chevron Oronite

14. Weaknesses
• Cost of environmental hazards, due to gas flaring
from refinery activities and dangerous accidents in
Chevron refineries such as explosions
• Legal issues
• Decreasing in US and International Refined
Product Sales
• Decreasing in Worldwide Downstream Earnings

15. Opportunities
• Decreasing oil prices, reduce the cost per barrel
for the refineries
• Expand our refinery portfolio near to
unconventional resources, such as shale gas and
methane hydrates.
• Focus on development of the refineries in Asia-
Pacific
• Strategic alliance with major National Oil
Companies in Asia-Pacific area which owns a lot
of refinery assets in the area
• Customer trends for more friendly and clean fuels

16. Threats
• Security issues. Such as terrorist attacks or
asymmetric threats
• Geopolitical instability
• Government Environmental and Taxation
Legislation
• Increase of natural gas share in global energy mix
• National Oil Companies, political influence and
ownership of the global oil reserves
• Low global economic growth

17. CPM Matrix for Chevron
Critical success factors Chevron Exxon Mobil Shell
weight Rating Score Rating Score rating score
Advertising 0.20 3 0.60 3 0.60 3 0.60
Product quality 0.10 3 0.30 4 0.40 2 0.20
Management 0.07 4 0.28 3 0.21 3 0.21
Financial position 0.10 3 0.30 2 0.20 3 0.30
Customer loyalty 0.05 2 0.10 3 0.15 3 0.15
Global expansion 0.20 3 0.60 4 0.80 4 0.80
Market share 0.09 3 0.27 3 0.27 4 0.36
Geopolitical Influence 0.15 3 0.45 3 0.45 3 0.45
Production capacity 0.04 3 0.12 3 0.12 4 0.16
Total 1.00 3.02 3.20 3.23

18. Grand Strategy Matrix for
Chevron
• Chevron has 8% annual growth the last 4 years since 2009
and chevron CPM evaluation score is 3.02. According to
these statistics chevron is located in Quadrant 1.

19. The Internal-External Matrix
for Downstream and
Upstream Chevron Sector
• IFE Score of downstream is 3.11 and the EFE Score is 3.03.
The downstream earnings represent the 9% of total
segment earnings.

20. • IFE Score of upstream is 2.83 and the EFE Score
is 2.64. The upstream earnings represent the 90%
of total segment earnings

21. SWOTMatrixof
Upstream

22. SWOTMatrixof
Downstream

23. Conclusions and Proposed
Strategies
Downstream:
• Influence local communities, develop a stable
environment and create long-term sustainability
• Penetration in lubricant and petrochemicals
sector
• Invest in downstream sector by supporting and
advertising the brand name in the EU countries
• Forward integration in refinery sector with
introduction of new technological advantages

24. Upstream:
• Opportunity to penetrate in the Chinese gas
upstream industry
• Exploration and Production of methane hydrates
• Cooperation with geopolitical institutions such as
Stratfor and The Global Policy Institute (London
Metropolitan University)

25. Thank you for your
attention
• Any Questions?