CHEVRON CEO ON THE WAY OUT
The chief executive of U.S. oil giant Chevron Corp., John Watson, is planning to step down, reports Bradley Olson, citing people familiar with the matter.
The company’s board hasn’t yet decided on a new CEO, but the leading candidate to replace Mr. Watson is Michael Wirth, a refining specialist who currently serves as vice chairman, the people familiar with the situation said.
Mr. Wirth’s experience in cost cutting at large refineries is seen as an important asset in the current, $50 a barrel crude oil price environment, the people said.
Mr. Watson’s “likely departure underscores the dramatic shift under way at big oil companies as they adapt to a prolonged period of lower prices brought about by the U.S. shale boom,” Mr. Olson writes.
ARAMCO IPO TRIGGERS RACE TO PRIVATIZE IN MIDDLE EAST
Saudi Arabia’s planned listing of its national Saudi Arabian Oil Co.–also known as Saudi Aramco–has spurred other Middle Eastern countries to raise capital on equity markets, in a move that could result in the privatization of large parts of their state-run energy industries, report Sarah McFarlane, Christopher Whittall and Summer Said.
Low oil prices over the past three years have forced governments that rely mainly on oil revenues to turn to public markets in order to shore up their budgets, while also diversifying their economies.
Many governments have already issued bonds. This year alone there have been 32 IPOs in the region, raising $1.5 billion, according to Dealogic, with more expected to come down the pike.
“Selling state-owned assets is a relatively new phenomenon in the Middle East, where governments own great chunks of the economy. Global fund managers have lacked a direct way to get exposure to the Middle East’s oil industry, and this will bring new options for those funds looking to put money in the global energy sector,” the reporters note.
LG TARGETS U.S. ELECTRIC CAR MARKET
South Korea’s LG Electronics Inc. said Wednesday it plans to spend roughly $25 million to build a factory for electric car parts outside Detroit, reports Eun-Young Jeong.
The plant, which would initially produce battery packs for electric cars, would be LG’s first vehicle-components factory in the U.S. The company earlier this year said it would build its first major U.S. plant in Tennessee, for manufacturing washing machines.
LG said its latest U.S. investment plans would create around 300 jobs, but it “isn’t clear how much of a boost LG will get form its new U.S. production facility, or if its added capacity will be enough to turn around its sagging vehicle-parts business,” writes Mr. Jeong.
Oil prices fell Wednesday as investors weighed U.S. data showing crude inventories declined last week while stocks of refined products mounted.
Brent crude, the global benchmark, was down 0.48% at $51.62 a barrel on London’s Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.38% at $47.65 a barrel.
The American Petroleum Institute, an industry group, said late Tuesday that U.S. crude inventories declined by 3.6 million barrels during the week ended Aug. 18, while gasoline and distillate stocks rose by 1.4 million barrels and 2 million barrels respectively.