US major announces senior management changes and previews second quarter financials, showing earnings ahead of consensus
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Chevron has waived a mandatory retirement age requirement for the company’s chief executive Mike Wirth, reflecting suggestions that the company is struggling to identify a suitable internal replacement for the top job.
The decision came as the company rang the changes elsewhere in the c-suite with its veteran chief financial officer set to retire and a successor ready to step up.
Chevron’s moves come at a time it is racking up strong profits, based on an accompanying results preview which showed second-quarter net earnings of $6 billion, ahead of analyst expectations.
Wirth told the FT today: “We’ve got strong business momentum and we’ve been delivering good results in a pretty turbulent environment. I had stuff that I still want to get done and I’m excited to continue.”
He told the newspaper the company had experienced a lot of late, with a pandemic, a war and oil prices fluctuating from below zero to in excess of $120 per barrel.
“We’ve acquired three companies in the last three years,” he added. “We’ve got a lot of work still to get done. And this provides continuity and flexibility of the executive team going forward.”
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Wirth, who joined Chevron in 1982 and succeeded previous company’s chief executive John Watson in 2018, is turning 63 in October this year.
He still has two years to serve before reaching the mandatory retirement age of 65 established by the US major.
Wirth is one of the highest paid executives in the energy business, with his $23.57 million pay packet in 2022, second only to ExxonMobil chief executive Darren Woods.
CFO retiring with successor in place
Besides the waiver, Chevron also announced chief financial officer Pierre Breber will retire next year after 35 years of service to the company, and four years in his current role. He is younger than Wirth at 58 years of age.
Eimear Bonner, currently chief technology officer and president of the Chevron Technical Center, will succeed Breber as chief financial officer, effective 1 March 2024.
Breber led the company through multiple “financially astute deals”, including the $13 billion Noble Energy acquisition in July 2020 at the height of the the Covid-19 pandemic, and most recently the deal, analysts at RBC Europe said.
Bonner, 49, joined Chevron in 1998. In 2018, she became general director of Tengizchevroil, a Chevron-led operator of the Tengiz oilfield in Kazakhstan. She oversaw the multibillion-dollar capacity expansion project of the field, that is due to start next year as it has now reached the 98% completion and 66% commissioning targets.
The company also announced three senior leadership appointments related to Bonner’s upcoming role change.
Balaji Krishnamurthy, currently vice president of strategy and sustainability, will become vice president of the Chevron Technical Center.
Molly Laegeler, currently vice president of Chevron’s San Joaquin Valley business unit, will become vice president of strategy and sustainability.
Frank Mount, currently vice president of mergers & acquisitions and origination, will become vice president of business development.
Profit preview better than expected
Chevron also revealed a 48% reduction in its total earnings in the second quarter that fell to $6 billion against $11.6 billion in the second quarter of 2022.
The company’s adjusted earnings for the second quarter were indicated at $5.8 billion, markedly down against the $11.4 billion of the same time last year, but ahead of analysts’ consensus, which was $5.4 billion, according to RBC Europe.
Capital investments in the second quarter of this year rose to $3.8 billion against $3 billion in the first quarter and $3.2 billion in the second quarter of 2022, Chevron said in its performance preview. Its full quarterly figures will be released on Friday.
The group’s hydrocarbon production stood at 2.96 million barrels of oil equivalent per day. RBC Europe noted that stands positively versus the consensus of 2.94 million boepd and RBC’s own forecast of 2.93 million boepd.
In 2024, the analyst said a key deliverable for Chevron is the start-up of the Tengiz growth project in Kazakhstan, which should drive improved production and free cash flow.
