Chevron Strategic Plan Group 9

Chevron's Current Dilemmas

  • 2016YE Net loss of $497 million
  • Decrease of $1.87 Billion in earnings from 2015 to 2016
  • Loss of $2.05 billion in 2016 of upstream revenue
  • Competitive threat- Exxon 33% growth

The Strategy: Stability & Growth

By expanding in the Permian Basin (Delaware & Midland regions)

  • The most profitable region in the U.S. with a BE point at $20-$30 per barrel
  • Increase market share of U.S. oil production
  • Shift focus away from unprofitable regions
  • Prepare for increases in oil prices and aggregate demand for oil

Value Chain Analysis

Financial Benefits

How Will We Accomplish This Strategy?

  • 150,000 acres in Midland Basin
  • 50,000 acres in Delaware Basin
  • $26,480 per acre for a total cost of $5.3B
  • Additional costs of 20.6B

Alternative Strategy

Expansion into renewable energies

  • Growth of 2.6% a year in consumption through 2040
  • Heightened awareness of the environment
  • The scarcity of oil

Expansion is not beneficial

  • Continued demand for oil though 2040
  • Costs
  • Wind and Solar producing < 1% of the worlds energy
  • Oil Competes against renewable in only 5% of the market


Created with images by InAweofGod'sCreation - "190. Container Cranes at Sunset" • Unsplash - "person walking pipeline" • johnny choura - "Oil Fields" • Unsplash - "pipeline crossing valley" • jarmoluk - "tablet calculator business" • devinStein - "[35/365]: Emit/produce" • Unsplash - "windmills energy alternative"

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