Business Principles, Products, And Corporate Social Responsibility Of Chevron Corporation

A Brief History of the Company

The following report is a study of the business principles of a multinational energy corporation generating resources for progress. The Chevron Corporation is an American company, which mainly deals in the production of oil and natural gas. The company is one of the successors of the Standard Oil and its earliest predecessor was Pacific Coast Oil Company. At present, the company has outlets in more than 180 countries and is one of the leaders among the leading oil companies in the world (Baghebo & Atima, 2013).

The report also includes the products and services offered by the corporation. Among its products and services the company chiefly supplies energy resources to its customer. The company mostly aims at procuring the global oil and natural gas market in an innovative and eco-friendly technique.

The report wraps up by stating the business ethics of the corporation. This consists of the legal lawsuits against the Chevron Corporation and its responses.

The Chevron Corporation was founded on 10^th Sept 1879 in California of United States under the name of Pacific Coast Oil Company. In 1906, a treaty was made between Pacific Coast Oil Co. and lowa Standard that gave birth to Standard Oil Corporation, California (Manning, 2013). Now the “new” company emerged as a business corporation that particularly engaged in selling of gasoline and lubricants, which were promoted under the Calumet, Petrolite, Ruddy Harvester, Diamond, Zone labels and Zerolene. In May 1911, a Supreme Court decision known as Sherman Anti-trust law separated the two business corporations and the company appeared as the Chevron Oil Corporation. The company got its name “Chevron” from its few retail goods in 1930s. The company was also named Calso from 1946 to 1955 in territories exterior to its local West Coast.

The company currently  ranked third in the top 500 joint-stock company in US and sixteenth in the top 500 worldwide corporations. Apart from its production in gasoline and natural gas, the company also takes part in hydrocarbon exploration and production, refining and power generation. In 15^th October 2000, Chevron declared purchase of Texaco in an agreement worth at $45 billion, becoming the second-largest oil corporation in the United States and the fourth-largest openly traded oil corporation in the world with a mutual market value of about $95 billion. This combined business was called Chevron Texaco. The company is also one of the first companies who introduced two fuel brands to be Top Tier certified.

The company’s board of directors- John S. Watson, Michael K. Writh, Linnet F. Deily and Ronald D. Sugar are exceptionally committed to the vision and values of the company. The company according to the reports of 2016 employs 61,500 employees with annual revenue of 114.5 billion USD. The market capitalization of the company is esteemed at over 20 billion USD. Chevron’s company centers of operations are situated in a campus of 92-acre in California’s San Ramon. The company furthermore functions from agency Texas’s Huston towers, where it chartered the 1500 Louisiana Street and 1400 Smith Street from previous energy monster of Texas, Enron. The corporation is also developing a fresh workplace in business district Houston beside its vacant possessions at 1600 Louisiana Street (Lawson & Kam, 2013).

An Overview of the Company

The company operates both upstream and downstream production. The company’s upstream productions revolve around the globe and are generally in USA, Nigeria, Australia Angola, the Gulf of Mexico and Kazakhstan. The organization controls oil and natural gas wells of roughly 11,000 in hundreds of fields absorbing 4,000,000 acres (16,000 km2) across the Basin of Permian, placed in Western Texas and southeastern part of New Mexico. The company’s project in Australia “Gorgon” is among one of the few largest natural gas projects in the world, and “Wheatstone” will be the country’s foremost third-party liquefied natural gas hub. During the onshore and near-offshore areas of the Niger Delta, Chevron functions under a mutual scheme with the National Petroleum Corporation of Nigeria, investing a 40% concentration in 13 regions in the district. Besides, Chevron activates the  Gas Plant at Escravos and  the gas-to-liquids plant of Escravos. The corporation has benefits in four regions in Angola, including two offshore districts in Cabinda territory, the Tombua–Landana development and the Mafumeira Norte mission. Chevron is also a chief collaborator in Angola LNG plant. The corporation has also started its project in Kazakhstan, Tengiz and Karachaganak. According to 2013 report, the oil and gas field of Rosebank in western Shetland was assessed by Chevron and its associates. Chevron drilled its invention there in 2004. The company is expecting its production is expected by 2017 if a treaty is signed to bore oil from the fields. The company is facing geology and weather challenges, which is delaying its production.

The corporation’s downstream businesses are to fabricate and sell goods such as fuels, additives, lubricants and petrochemicals. Chevron’s major noteworthy locations of businesses are the western North American coast, Southeastern Asia, the US Gulf coast, Australia, Southern Korea and Southern Africa. According to the reports of 2010, the corporation sold a standard amount of 3.1 million barrels each day (490×10³ m³/d) of sophisticated goods like petrol, gas, jet fuel and diesel. Chevron manages more or less 19,550 vend locations in 84 countries. The corporation is also interested in 13 power-generating possessions in the United States and Asia and takes in gas stations in Western Canada. The corporation possesses the brand privileges to Texaco and Caltex fuel and oil goods. The company’s chemicals industry shares an ownership of 50% in the Chevron Phillips Chemical Company, that produces petrochemicals, and the Chevron Oronite Company that builds, creates and trades petroleum and lubricant additives. Apart from this, Chevron Corporation operates in renewable geothermal energy production. Chevron activates Indonesia’s geothermal wells in Indonesia generating electricity to Jakarta and the surrounding area. In the Philippines, the organization runs geothermal wells at Tiwi field in the province of Albay, the Makiling-Banahaw field in Laguna and Quezon counties. The company manages Gas-fired cogeneration services to generate electricity and steam to recover the wasted heat to sustain superior oil recovery functions (Torchia et al., 2012). The corporation’s renewable maneuvers contain wind, geothermal and solar resources. The company is also developing their business of geothermal and solar energies joined projects in Arizona, California and Texas.

The company’s corporate responsibility focuses on ecological, social and governance (ESG) concerns that subject to the corporation’s business and stakeholders – shareholders, consumers, host governments, local publics and staff. The report from Nigeria conveys that the company is admired for their people, partnership and performance with superior potentialities and commitment (Strauss, 2012). The company in Latin America contributed to the social progress by developing energy resources (Schneider et al., 2012). They are operating responsibility by employing skilled men and women with executive excellence (Beittel, 2013). Thus, the company chiefly aims at achieving its core value which are- diversity and inclusion, high performance, integrity and honesty and protection of people and the environment.

Products and Services of the Company

Apart from this, there are also some legal issues and public criticisms against the company that affected the company’s reputation. One such environmental issue that can be mentioned is the spilling of oil off the coast of Rio de Janerio. In the month of November 8, 2011, the organization was fired by the authorities of Brazil for its responsibility in the spilling of crude oil off the Brazil’s southeastern coast (Abowei & Ogamba, 2013).  The supervisors of Brazil reported that 416,400 liters of oil leaked within the duration of two weeks from marine rock close to the well in the Frade oil plan, which is 370 km away from the Brazilian coast. The judicial board in Brazil at first claimed $10.6bn in the following charge (Bencardino, Greco, & Ladeira, 2012) while the National Petroleum Agency (ANP) expelled the corporation’s actions in Brazil until it acknowledged the source of the oil leak off the coast of Rio de Janeiro. An instance of public damage caused by Chevron was the explosion of KS endeavor. The KS Endeavor jackup rig blowed up on 16^th January in the year 2012 while drilling a discovery well for the company in the Nigerian Funiwa field (Porter, 2013). The blast caused the demise of two labors among the 154 labors who were working in it and a blaze that burnt for 46 days. According to a report of Reuter’s news, labors on the KS Endeavor were overlooked by Chevron when the labors pleaded mass departure owing to issues of rising smoke that swelled up from the drilled borehole. A higher labor confessed that an enormous build-up pressure prompted the blowout. However, the authority responded that they had not received any requests regarding the desertion of the rig stating that employees working there had the right to call a close down to the work if they assumed risky circumstances (Wasserman, 2012). A legal lawsuit against the corporation was appealed to the Argentine government in 2013 (Walker, 2014).  In 2013, a contract for the world’s second-largest shale gas deposit, Vaca Muerta was signed between YPF and Chevron. In the month of August 2013, the Neuquén province Congress approved the contract, while a huge group of about 5000-10,000 labors, scholars and native inhabitants objected to it outside the court. In order to manage the mob the police fired rubber bullets that hit a few activists. Governor Jorge Sapag sheltered the police by stating that the protest rally was generally nonviolent, but an approx of 100 people alienated from the rest harassed the police force, which was handled with sincerity and proficiency.

Conclusion

In the light of the above discussion, it can be concluded that, Chevron Company is a globalized energy production that believes in production with innovation. The company not only works efficiently but also looks after the concerns related to environmental and social factors. Nevertheless, the company had faced many external and internal challenges to reach at this height. The company has also various adverse affects on the environment and society and as a result of this, it had faced several lawsuits that at certain point of times reduced the company’s production.

References

Abowei, J. F. N., & Ogamba, E. N. (2013). Effects of Water Pollution in Koluama Area, Niger Delta Area, Nigeria Fish Species Composition, Histology, Shrimp Fishery and Fishing Gear Type. Research Journal of Applied Sciences, Engineering and Technology, 6(3), 373-381.

Baghebo, M., & Atima, T. O. (2013). The impact of petroleum on economic growth in Nigeria. Global Business and Economics Research Journal, 2(5), 102-115.

Beittel, J. S. (2013). Ecuador: Political and Economic Conditions and US Relations. Current Politics and Economics of South and Central America, 6(2), 243.

Bencardino, M., Greco, I., & Ladeira, P. R. (2012, June). The comparative analysis of urban development in two geographic regions: the State of Rio de Janeiro and the Campania Region. In International Conference on Computational Science and Its Applications (pp. 548-564). Springer, Berlin, Heidelberg.

Lawson, G., & Kam, S. (2013). Making Law Out of Nothing at All: The Origins of the Chevron Doctrine. Admin. L. Rev., 65, 1.

Manning, J. F. (2013). Chevron and Legislative History. Geo. Wash. L. Rev., 82, 1517.

Porter, W. M. (2013). The environment of the oil company: A semiotic analysis of Chevron’s ‘people do’commercials. Rhetorical and critical approaches to public relations, 279-300.

Schneider, J., Ghettas, S., Merdaci, N., Brown, M., Martyniuk, J., Alshehri, W., & Trojan, A. (2015). Towards sustainability in the oil and gas sector: benchmarking of environmental, health, and safety efforts. Journal of Environmental Sustainability, 3(3), 6.

Strauss, P. L. (2012). DEFERENCE” IS TOO CONFUSING—LET’S CALL THEM” CHEVRON SPACE” AND” SKIDMORE WEIGHT. Columbia Law Review, 1143-1173.

Torchia, D., Arora, A., Vo, L., & Global, C. L. (2012). Clean, green, hydrocracking machine. Hydrocarbon Engineering.

Walker, C. J. (2014). Chevron Inside the Regulatory State: An Empirical Assessment. Fordham L. Rev., 83, 703.

Wasserman, M. F. (2012). The Changing Guard of Patent Law: Chevron Deference for the PTO.