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

Credits:

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"

Made with Adobe Slate

Make your words and images move.

Get Slate

Report Abuse

If you feel that this video content violates the Adobe Terms of Use, you may report this content by filling out this quick form.

To report a Copyright Violation, please follow Section 17 in the Terms of Use.