HOUSTON : Five years ago, Chevron CEO Michael Wirth won Wall Street acclaim as the No. 2 U.S. oil company briefly achieved a market value larger than Exxon Mobil’s after he refused to get into a bidding war with Occidental Petroleum over a rival.
He was ahead of the game when the pandemic hit oil and gas demand, forcing rivals to make deep cutbacks that Wirth had already tackled at Chevron. Its shares had outperformed rivals for five years until 2022.
Fast forward to 2024 and Wirth’s legacy is in danger. Chevron’s falling earnings no longer cover its dividends and buybacks. Project overruns in Kazakhstan and Australia have cost the company billions.
The CEO is also locked in a must-win arbitration battle with Exxon Mobil that has held up his $53 billion purchase of Hess, a deal that would give Chevron a stake in a lucrative Guyana oilfield that Exxon operates.
Exxon’s challenge has delayed the deal by almost two years, and threatens to kill it entirely by asserting a right of first refusal over a sale of the Guyana properties.
Chevron shares are up 18 per cent since Wirth took over as CEO in 2018, compared to Exxon’s 31 per cent gain over the same period.
Wirth’s job is not at risk, say Chevron executives and industry sources. The board granted him a retirement-age waiver more than a year ago as he began a sweeping overhaul of top managers.
But “If you have $1 to invest in an oil company now, how would you justify investing it in Chevron?,” said Mark Kelly, an analyst with the financial firm MKP Advisors in London. “The Hess deal delay has left Chevron with no clear (business) growth story to tell.”
Jake Spiering, Chevron’s head of investor relations, said the company’s share performance this year has been hurt by the
