Market cap

* For banks, enterprise value is substituted with market cap. Source: Bloomberg Finance L.P.

Performance of the brand

Chevron has had a fairly successful year, with a 43% jump in profits for the second quarter of 2011. Profitability has been buoyed by strong oil prices, which at the time of writing stands at US$85 for Texas Light and US$109 for Brent Crude. Chevron has used their success to invest in exploration and technological development. In September 2010, the company completed the purchase of three deepwater exploration blocks in the Pearl River mouth region off Southern China. One of the most significant strategies has been to target the many new sources of oil and natural gas that have become economically exploitable in the last few years. The most significant of these has been the move into the Marcellus Shale formation through the acquisition of Atlas Energy earlier this year. This independent, Pittsburgh-based producer was bought for US$4.3 billion and gives Chevron access to 9 trillion cubic feet of natural gas, in a field where reserves are said to total 262 trillion cubic feet.

The process by which the gas is retrieved is somewhat controversial however. Termed ‘fracking’, it involves injecting pressurised water into fissures in the earth, to open them and release the natural gas beneath. This has in some cases led to contamination of groundwater and unintended gas leaks. Efforts are being stepped up by a collective of energy companies to address these issues as production in the Pennsylvania field is stepped up.

Allegations of pollution have in fact dogged Chevron for some time. In 2011 the company reached a US$5.2 million settlement with the US government over contamination of Puerto Rican oil wells and has been ordered by a court in Ecuador to pay US$8 billion for its alleged failure to clear pollution of the Ecuadorian Amazon caused by its subsidiary Texaco over the past 20 years. The company strenuously denies liability however, citing that it has made major efforts to remediate its share of the pollution and that it is no longer involved in the region, but that Ecuador’s state Petrol producer is in fact liable for the remaining clean-up operations and has a far less reliable record on safety than Chevron. The litigation continues.

 

Positive Aspects

43% profit increase in Q2 2011

Following the global trend for rising oil prices.

Acquired Atlas energy in 2010 for $4.3 billion which has given it access to the Pennsylvania shale fields, facilitated by new drilling technology.

This represents its foray into the Marcellus Shale formation. The oil industry was arguably forged in Pennsylvania and now oil companies are rushing back there as the exploitation of huge deposits of natural gas found there become economical through ‘fracking’. Atlas energy was an independent producer based in Pittsburgh. Chevron has paid $4.3 billion to acquire it and the 9 trillion cubic feet of gas it has rights to it the region, which geologists think may total at least 262 trillion cubic feet of recoverable gas. Chevron also will gain access to 486,000 acres of Marcellus shale.

In September 2010, the Company completed acquisition of operating interests in three deepwater exploration blocks in the South China Sea’s Pearl River Mouth Basin.

 

Negative Aspects

$5.2 million settlement with the US EPA over contamination of Puerto Rican oil wells

Shares fell 7.5% in a day following the downgrading of the US’s credit rating

Fined $8billion by a court in Ecuador for Amazon pollution

Judge Nicolás Zambrano in the tiny oil town of Lagos Agrio ordered Chevron to pay $8 billion in damages for environmental devastation in the region that came about due to faulty drilling practices going back as far as the 1970’s. The judgment also orders the company to publicly apologize for its actions or face higher fines.

Accused of repeated cover-ups and shirking of responsibility of oil-spills and human rights abuses in the Ecuadorian Amazon.

Has been accused of hypocracy and green-washing in its response by pushing its ‘We Agree’ advertising campaign, which promotes an image of Chevron as a model corporate citizen while doing little to change its damaging drilling practices.

 

 

Last changed September 2, 2011

League tables

Chevron appears in the following brand league tables:

Rank 37 in the Global 500 2012.
Rank 44 in the Global 500 2011.
Rank 44 in the Global 500 2011.
Rank 63 in the Global 500 2010.
Rank 49 in the Global 500 2009.
Rank 78 in the Global 500 2008.
Rank 89 in the Global 250 2007.