Dear Councilmember Butt:
Today, Chevron announced further plans to restructure its global downstream operations. The global refining industry continues to face challenges. The recession has weakened demand for refined products such as gasoline, diesel, jet fuel and lubricants while available global supply of products has increased. We expect these conditions to continue for the next several years.
In response, Chevron is restructuring its downstream operations to improve returns and further streamline its portfolio and organization. We intend to further concentrate our downstream portfolio markets in areas which we have our greatest competitive strength, North America and Asia-Pacific. At this time, Chevron is soliciting bids for certain operations in Europe (including the Pembroke refinery) the Caribbean and select Central America markets. We are also reviewing our operations in Hawaii and Africa, outside of South Africa.
To be clear, we are only soliciting bids for certain assets; no decisions have been made and we have not announced any sale. It could take 12 to 24 months or longer to complete a sale. We will not sell any asset unless it creates value for Chevron.
We have no planned actions to announce regarding the Richmond refinery and have no plans to idle any of our refineries at this time. We have been operating in Richmond for more than 100 years and hope to continue to operate the Richmond facility. However, we continue to review potential changes to ensure profitable operations in these difficult times.
We are also rapidly and aggressively lowering costs, reducing capital spending, improving efficiency and simplifying our organization. Chevron is also looking to further reduce its world-wide downstream workforce by 2,000 employees in 2010. No announcement on impact to specific regions or locations is being made at this time.
Out of respect I thought it was important that I communicate this to you directly and I will stay in touch as I learn more specific information on the impacts to Richmond.
All the Best,