Welcome back to the Deep Dive. Today, we are
taking on a true titan of the energy world, a
company whose influence is felt in, well, just
about every corner of the global economy. We're
talking about Chevron Corporation. And this isn't
just another energy company. It's an institution,
really, with roots stretching back nearly 150
years. And here's the hook that I think really
frames this entire conversation. Since 2020,
Chevron has been the last oil and gas company
left in the Dow Jones Industrial Average. Right.
ExxonMobil got dropped. Chevron stayed. And that
single fact, I mean, it just speaks volumes about
its financial power, its strategic importance,
and its sheer scale. We're talking about a company
worth over $200 billion. So our mission today
is to give you a really clear, impartial masterclass
on how this behemoth actually works. We're going
to trace its family tree right back to the famous
Standard Oil breakup. And then we'll map out
its modern global structure. I mean, how does
it actually find, move, and then sell energy
across the entire planet? Exactly. And we're
going to dissect its biggest strategic moves,
like the huge Hess acquisition, and also get
into the... Well, the very significant legal
and environmental battles it's constantly fighting.
And this matters to you because honestly, if
you understand how a vertically integrated super
major like Chevron works, you get this crucial
insight into global energy markets. It connects
everything from climate debates to the real nature
of high stakes corporate power and how that power
can shape and sometimes even dictate international
policy. So let's start at the very beginning.
The birth of a titan in the American West. OK,
so Chevron's story doesn't just start with the
Standard Oil breakup. It's actually tied to the
very beginning of the oil industry in California
itself. How did that happen? You have to go all
the way back to 1876. There had been some small
discoveries before, but the moment everyone points
to is when a company called Star Oil struck crude
in the Pico Canyon oil field. Just north of Los
Angeles. Right. And it wasn't a gusher. Not at
first. Maybe 25 barrels a day. But that discovery
is really seen as the start of the modern commercially
viable oil industry in California. It's that
classic aha moment that just snowballs into a
whole industry. So Star Oil was the seed. It
was. And the people who turned that seed into
a real corporation were a group that included
Charles N. Felton and Lloyd Tevis. They formed
the Pacific Coast Oil Company. or PCOC, in 1879.
Okay. They absorbed Star Oil and came in with
some serious funding, a million dollars, which
was a fortune back then. And very quickly, PCOC
became the biggest oil company on the West Coast.
And when you're the biggest player in a region,
you eventually get the attention of the biggest
player in the world. The Andi Rockefeller Standard
Oil. Exactly. They couldn't ignore an asset that
dominant. So in 1900, Standard Oil just acquired
them. And then came the big one. The 1911 Supreme
Court decision to break up the Standard Oil Trust,
which just completely remade American business.
And the West Coast assets of that trust were
reorganized. A few years earlier, in 1906, PCOC
had already become the Standard Oil Company,
California. People just called it SoCal, or sometimes
Calso. And that is the direct traceable ancestor
of the Chevron we know today. That's the one.
You know, we often talk about that breakup, but
what was the actual... practical impact on SoCal.
It wasn't just about splitting into 34 companies.
No, it forced them to think differently. After
the breakup, SoCal was legally restricted. They
could only use the famous standard name in a
few places. The Pacific Coast states, Nevada,
and Arizona. So they couldn't just rely on that
powerful legacy brand everywhere else. Right.
That legal problem was actually a huge catalyst.
It forced them to expand globally and create
new brands and new identity. And that's where
the name Chevron comes from. It is. The name
itself was first used for some retail products
back in the 1930s. And for a while, outside their
home territory, they used the name Calso, too,
from about 1946 to 1955. But no matter what they
called themselves, their ambition was global.
They quickly became one of the Seven Sisters.
Seven Sisters. I mean, for those who don't know,
this was a group of seven absolutely dominant
petroleum companies that basically controlled
the world's oil supply from the 40s through the
70s. An incredible era of corporate power. And
a huge part of that dominance was cemented by
one single strategic move they made decades earlier.
The Saudi Arabia connection. This is where you
see corporate history just slam right into geopolitics.
Yeah. In 1933, California Standard secured a
massive concession in Saudi Arabia. That one
deal changed everything. Not just for the company,
but for the entire Middle East. It was pivotal.
It led directly to the first big Saudi oil discovery
in 1938. And then 10 years later, in 1948, they
hit the jackpot. The Gawar Field. The Gawar Field,
the largest conventional oil field in the world
even today. And the subsidiary that ran all of
this was eventually called the Arabian American
Oil Company. Aramco. Aramco. So it was Chevron's
ancestor, SoCal, that literally built the foundation
for the modern Saudi oil state. And of course,
Aramco was eventually fully nationalized by the
Saudi government by 1980. It's just an incredible
historical footprint for one company to have.
It really is. But back on the domestic front,
the company really grew by, well, you could call
it merger mania. They just kept acquiring their
competitors. The first really colossal one was
in 1984. That was the deal for Pittsburgh -based
Gulf Oil. And at the time, it was the largest
corporate merger in history. The price was enormous,
but it gave them huge reserves and a whole distribution
network. And that's when they officially became
Chevron Corporation. Exactly. That merger was
the trigger. They finally retired the old SoCal
name and adopted the retail brand they'd been
building for 50 years. Which just set the stage
for the next big wave of deals in the early 2000s.
It did. In 2001, they bought Texaco for $45 billion.
Now, Texaco was another old rival, and they already
had history together. They'd formed a joint venture
called Caltex back in the 30s. And the merger
was so big, they actually renamed the whole company
Chevron Texaco for a few years. From 2001 to
2005, yeah. And I've read that... Back in the
day, SoCal and Texaco were sometimes called the
Terrible Twins. The Terrible Twins? For their
aggressive business practices. So bringing them
together, I mean, you can imagine the kind of
corporate DNA they created. It was all about
growth and hardball negotiations. And the shopping
spree kept going. 2005, they bought Unocal. Right,
for about $18 .4 billion. And this deal was really
interesting because Unocal wasn't just about
oil. It brought in these major assets in Southeast
Asia. And that's not all it did. No. Critically,
it boosted Chevron's proven reserves by about
15 % overnight, and it made them a major global
producer of geothermal energy. That's a theme
we have to come back to, this tension between
fossil fuels and their moves into alternative
energy. For sure. But fast forward almost two
decades, and they proved that their appetite
for huge deals was still there. I'm talking about
the 2023 deal for Hess Corporation. This one
was huge. A $53 billion all stock deal. And it
was laser focused. It wasn't just about getting
bigger. It was about getting access to two really
crucial things. new U .S. shale plays, and most
importantly, Hess's big stake in the oil fields
off the coast of Guyana. Guyana is one of the
hottest oil exploration spots in the world right
now. So this deal put Chevron right in the middle
of a new boom. But it wasn't exactly a smooth
process. Not at all. The Hess shareholders approved
it, but then ExxonMobil, who was already a partner
in Guyana, stepped in. What was their argument?
They filed an arbitration claim. They argued
they had the right of first refusal on Hess's
shares in the Guyana project, basically saying,
hey, we should have gotten the first shot at
buying that. So you have two of the biggest supermajors
on the planet fighting over this, holding up
a $53 billion deal. It was a massive standoff.
The arbitration dragged on, but eventually the
regulators weighed in. In September 2024, the
FTC, the Federal Trade Commission, they cleared
the merger. But with a condition. A very important
condition. They refused to allow the Hess CEO,
John Hess, to take a seat on Chevron's board.
It was a clear signal from the regulators about
concerns over too much market consolidation and
potential undue influence. So in the end, it
was a very hard fought win for Chevron. OK, that
history brings us right up to the modern Chevron.
So now we need to look under the hood. How does
this $200 billion engine actually run? And to
do that, you have to understand its structure
as a vertically integrated supermajor. Let's
break that down for everyone. When we say vertically
integrated, what does that mean in simple terms?
It means they own the entire chain from start
to finish. They don't just find the oil. They
get it out of the ground. They move it. They
refine it into gasoline and other products, and
then they sell it to you at the pump. And that
chain is broken into three parts, upstream, midstream,
and downstream. Exactly. So let's start at the
source, upstream. This is the high -risk, high
-reward world of exploration and production.
And their upstream footprint is just massive.
It's enormous. On any given day, they're producing
nearly 3 million barrels of oil equivalent. And
while they're all over the globe, the two biggest
hubs are North America, with about 1 .2 billion
barrels of oil equivalent, and Eurasia, which
is even bigger, at 1 .4 billion. And when you
say North America, you really have to talk about
the Permian Basin. It's the heart of the U .S.
energy boom. The Permian is absolutely core to
their operations. They have something like 11
,000 wells spread across 4 million acres of West
Texas and New Mexico. And they're not new to
the game there. Not at all. They're a legacy
player. They were one of the original developers.
In fact, they produced their five billionth barrel
of oil from the Permian way back in 2011. Wow.
And they're also pushing hard in deepwater exploration,
mostly in the Gulf of Mexico, with these incredibly
complex fields like Tahiti and Blind Faith. And
that expansion is happening right now with projects
like the new Anchor Field. Anchor Field is a
perfect example of the scale we're talking about.
It's a $5 .7 billion project in the deepwater
Gulf. It just started producing oil in August
2024. And what kind of output are we talking
about? It's designed to pump 75 ,000 barrels
of crude oil and 28 million cubic feet of natural
gas every single day. I mean, the engineering
challenges on these projects are just mind boggling.
So outside of North America, some of their biggest
bets are on natural gas, right? Especially in
Australia. Yeah. Australia is home to their largest
single projects in the entire world. You have
the Gorgon Gas Project, which costs $43 billion.
$43 billion. And then right next door, you have
the Wheatstone LNG development, another $29 billion
project. These aren't just supplying Australia.
They are fundamental to the LNG supply for all
of Asia. And Gorgon has become this. this real
focal point in the climate debate because Chevron
is trying to pivot toward carbon capture. That's
right. They're spending a lot of money to try
and capture the CO2 that's produced with the
gas and then inject it deep underground. It's
a huge technical challenge. And the big question
is, you know, is it a genuine commitment to decarbonization
or is it more of a regulatory move to justify
continuing this massive gas production? That
is the multi -billion dollar question. Either
way, the scale of the technology is just... It's
breathtaking. And they're still huge in their
legacy regions, too. Kazakhstan, West Africa.
Absolutely. Kazakhstan is vital. They're involved
in the giant Tengiz and Karachikanak projects.
In West Africa, they're big in Angola, and they
have a major joint venture in the Niger Delta
in Nigeria. These are the places where you see
the real geopolitical risk involved in securing
the world's energy supply. So once you have all
that oil and gas, you have to move it. And that
brings us to the midstream segment, transport.
Right. And historically, this was actually a
part of the chain that Chevron didn't focus on
owning as much as its rivals did. They used a
lot of third party pipelines. But that's changed.
It changed in a big way in 2021 when they bought
Noble Midstream Partners. This was a very deliberate
move to complete their vertical integration puzzle.
So what did Noble give them that they needed
so badly? It gave them control, total control
over getting the crude from the well to the refinery.
They got pipelines and gathering assets right
in the heart of the Permian and DJ basins. It's
all about efficiency. No more paying a middleman.
Exactly. You control the flow. You control the
cost. You buffer yourself from price swings.
It cements that full cycle control. And for getting
it across the oceans, they have their own fleet,
the Chevron Shipping Company. They do, and as
a fun little detail, the ships are often named
after company directors. One of them was famously
named after Condoleezza Rice, who was on their
board for a long time. I remember that. They
renamed it later, didn't they? They did. It's
now the Altair Voyager. Okay, so that brings
us to the final piece downstream. This is the
part we all see. The refineries, the chemicals,
the gas stations. This is the final link in the
chain. Chevron has five active refineries in
the U .S., including massive ones in Richmond
and El Segundo in California. They also have
partnerships in seven other refineries around
the world in places like Singapore and South
Korea. And the chemical business? That's mostly
handled through a 50 -50 joint venture with Phillips
66. It's called Chevron Phillips Chemical, or
CP Chem. And it's a giant in its own right, making
plastics, industrial chemicals, all sorts of
things. But the most public face is obviously
the gas stations. And the branding there is,
well, it's a bit of a mess because of all the
history we talked about. It's a mix of names
for sure. The main brand in the U .S. is, of
course, Chevron. There are almost 7 ,000 of them,
mostly on the West Coast, in the South, and Texas.
And they have the world's largest one, right?
They do. At a place called Terrible's Roadhouse
in Nevada. It's a gigantic facility. And then
you still see the Texaco brand around. Yep. About
1 ,300 locations still use the Texaco name, mostly
in the South. And then internationally, the big
brand is Caltex. That's the one you see all over
Asia and Africa. Right. But even that has been
complicated. They actually sold their stake in
Caltex, Australia back in 2015. But then they
came back. They did. They must have realized
it was a mistake to leave that market. So they
bought another company's assets and then relaunched
the Caltex brand there in 2022. It just shows
how aggressive they are about market access.
The scale of everything we just talked about,
it just requires an unbelievable amount of money.
Which brings us to their financial picture and
some of the huge strategic shifts they've made
recently, starting with 2022. 2022 was a wild
year for the whole energy sector. After Russia
invaded Ukraine, oil prices just skyrocketed.
And for Chevron, that meant record revenues of
$246 billion. And profits. Record profits, $36
.5 billion. I mean, they were just swimming in
cash. And what a company does with that kind
of windfall, that's where things got really controversial.
It was a defining moment. Just days after announcing
those massive profits, Chevron announced a $75
billion... stock buyback program. $75 billion.
And they increased their dividend. And the response,
especially from the Biden administration, was
immediate and very heated. The criticism was
pretty straightforward, right? Why are you giving
all this money back to shareholders instead of,
say, increasing production to lower prices at
the pump or investing it all in clean energy?
That was exactly the argument. But Chevron's
move gave a really clear window into their strategy.
They were prioritizing returning cash to shareholders
over massive new spending on exploration or refining.
For critics, that $75 billion buyback was proof
that the industry was focused on short -term
rewards. And what's even more striking is that
at the same time, they were planning to cut their
workforce. It really underscores that relentless
focus on efficiency. In early 2025, they announced
plans to cut 20 percent of their workforce by
the end of 2026. The goal was to slash payroll
by two to three billion dollars. So record profits,
huge shareholder payouts and deep job cuts all
happening at once. It's the cycle of a super
major trying to please the capital markets. And
speaking of big strategic shifts, maybe the most
symbolic one in their entire history was the
decision to leave California and move their headquarters
to Texas. I mean, this was huge. Chevron had
been headquartered in California since 1879.
But starting in 2022, they sold off their massive
campus in San Ramon and started shifting everything
to Houston. And they made it official in August
2024. Yep. The full move to Houston was set for
January 2025. And their CEO, Mike Wirth. was
very public about why. He said that California's
regulations were discouraging investment. So
it wasn't just about saving money. No, it was
a political statement. It was a symbolic rejection
of California's climate policies and a huge bet
on the legal and political environment in Texas
as the future of American energy. And moving
from domestic politics to global ones, Chevron
is always walking this tightrope in geopolitical
hotspots, and there's no relationship more complicated
than the one with Venezuela. Venezuela is a complete
roller coaster, and it's all dictated by whatever
the policy is in Washington, D .C. Because of
the sanctions on the Maduro regime? Exactly.
For years, their operations were severely restricted.
But then in 2022, the Biden administration relaxed
some of those restrictions. And what was the
idea behind that? The thinking was it could help
stabilize global oil supplies and maybe use Chevron
as a sort of go between. Right. But the rules
were really strict. How so? Chevron could pump
the oil, but they couldn't sell it to anyone
connected to Russia or Iran. And most importantly,
none of the profits could go directly to the
Venezuelan state oil company, PDVSA. So Chevron
was basically just acting as a debt collector.
That's a good way to put it. They were recouping
money they were owed. But then, of course, the
pendulum swung back. Right. In February 2025,
the Trump administration came in and revoked
their license completely. All operations had
to stop. But then it changed again. Just six
months later, in August 2025. They got a new
license from the Treasury and resumed exports
to the U .S. almost immediately. It just shows
how Chevron can be used as a tool of U .S. foreign
policy, switched on and off. And sometimes they
have to leave a country entirely, not because
of policy, but because of ethics, like in Myanmar.
Yeah, in January 2022, Chevron announced they
were pulling out of Myanmar. They cited the rampant
human rights abuses and the collapse of the rule
of law after the military coup there. We've even
seen their operations get hit by protests. Like
in Kazakhstan. That was in January 2022. There
were massive protests across Kazakhstan because
of rising jewel prices. And Chevron had to temporarily
cut production at their huge Tengiz Field. It's
a reminder that this massive global supply chain
can be really fragile at the local level. So
to wrap all of this complexity up, they have
their corporate slogan, which they launched back
in 2007. The Human Energy Company. The Human
Energy Company. That's very intentional, obviously.
It's meant to project this positive spirit. But
as we get into their investments in alternative
energy and contrast that with their environmental
controversies, you really have to ask what human
energy means and what its real price is. OK,
let's pivot now to how Chevron is trying to position
itself for the future. I mean, they are obviously
a fossil fuel giant, but they're also making
some pretty significant investments in alternative
energy. They are. And their history here is actually
pretty complex. They've been involved in geothermal,
solar, biofuels, hydrogen. A bit of everything.
And it's important to remember, after they bought
UNOCAL in 2005, Chevron was, for a time, the
world's largest producer of geothermal energy.
If they were the world's largest, why did they
sell off those big geothermal assets in 2017?
That seems to go against the idea of moving toward
a lower carbon future. And that is the central
paradox of their strategy. They sold them partly
because geothermal, while it is low carbon, just
doesn't offer the same high returns as a successful
oil and gas project. It's a different financial
model. So they divested from that, but they're
still active in other renewables. They are, and
often in ways that actually support their existing
oil and gas operations. What's an example of
that? Well, back in 2011, they launched this
huge 29 megawatt solar to steam facility. But
it wasn't to sell electricity to the grid. It
was for what they call enhanced oil recovery.
Exactly. They were using the steam generated
by solar power to make it easier to extract heavy
oil from the ground. So you're using solar power
to produce more oil more efficiently. That makes
perfect sense. You're lowering the carbon intensity
of your production, but you're not actually replacing
the oil itself. Right. But they are also making
some very long -term frontier tech bets, like
fusion power. Fusion. Yeah. In the last few years,
they've taken investment stakes in two different
fusion power companies, Zap Energy and Terrier
Technologies. And they're also clearly serious
about hydrogen. In 2023, they bought a majority
stake in a hydrogen storage facility in Utah
that's set to be the world's largest. And very
recently, they've moved into the battery supply
chain with their first lithium project. That
was announced in 2025. They acquired a huge amount
of land in Texas and Arkansas to go after lithium
that's found in brine deep underground in a geological
layer called the Smackover Formation. So they're
trying to become a full spectrum energy company,
not just oil and gas. That seems to be the long
term goal. But no matter how much they invest
to these new technologies, you just can't ignore
the immense climate impact of their core business
over the decades. And the numbers are just staggering.
They're stark. Over its entire history, Chevron
has produced something like 58 ,598 million tons
of carbon dioxide. Which puts them under intense
regulatory pressure. And leads to major fines.
Like the one their joint venture, CPHM, got hit
with in 2022 for violating the Clean Air Act.
How much was that? It was a $118 million penalty.
It was because they weren't properly flaring
excess gases at three of their plants in Texas,
which led to a lot of extra air pollution. And
the irony is that all of their infrastructure,
their refineries, their offshore platforms, they're
all vulnerable to the extreme weather that's
linked to climate change. It's a negative feedback
loop. They even acknowledge it in their own risk
reports. Hurricanes. Flooding. It all threatens
their assets and drives up their costs. Which
brings us to probably the most complex and controversial
part of Chevron's entire legacy, the environmental
disaster in Lago Agrio, Ecuador, which they inherited
when they bought Texaco. This case is often called
the Amazon Chernobyl. And it's just a defining
story in corporate accountability. From the 60s
to the 90s, Texaco was operating in the Ecuadorian
Amazon, and critics accused them of systematically
dumping billions of gallons of toxic waste and
crude oil directly into the rainforest. And the
impact on the local and indigenous communities
there was just devastating. It destroyed the
environment and caused widespread severe health
problems for people who were drinking and bathing
in poison water. And after decades of legal battles,
an Ecuadorian court found Chevron liable in 2011.
And ordered them to pay how much? $9 .5 billion
in damages. A $9 .5 billion judgment. How does
a company like Chevron respond to that? They
refused to pay a single cent. They moved all
of their assets out of Ecuador and launched one
of the most aggressive corporate legal counterattacks
you will ever see. They famously vowed to fight
it until hell freezes over. And the main target
of that counterattack was the American lawyer
who represented the Ecuadorians, Stephen Donziger.
The legal war against Donziger is what really
stands out. Chevron filed a racketeering lawsuit
against him in the U .S., claiming the entire
Ecuadorian judgment was based on fraud. And in
2018, an international tribunal in The Hague
actually ruled in Chevron's favor. But there's
a huge asterisk on that ruling, isn't there?
A massive one. A key witness that Chevron used
against Donziger, a man named Alberto Guerra,
later admitted under oath that Chevron had paid
him over a million dollars and coached him for
50 days to give false testimony. So the star
witness admitted he lied after being paid. Essentially,
yes. But the U .S. legal system's response to
Donziger himself was, well, critics call it unprecedented.
A judge ordered Donziger to turn over his computer
and his phone. He refused. citing attorney -client
privilege. The judge then hit him with criminal
contempt charges. Okay. But here's where it gets
really chilling. The U .S. Attorney's Office
declined to prosecute the case. So the judge
appointed a private law firm to prosecute Donziger
in the court's name. And that private law firm?
Had previously represented Chevron. Wait, let
me just... I want to be clear on this. A private
law firm that had worked for Chevron was appointed
by a judge to criminally prosecute the lawyer
who had just won a multi -billion dollar case
against Chevron? That is correct. The outcome
was that Donziger was put under house arrest
for 993 days and was eventually convicted. Critics
argue his sentence was longer than the legal
maximum for that kind of offense. He was disbarred.
His assets were frozen. It sounds like they were
trying to make an example out of him. The argument
from critics is that Chevron used its bottomless
financial and legal power to crush him and to
send a message to anyone else who might think
about challenging them in court. That is just
a staggering story. And that kind of disparity
exists even here in the U .S., right? in Los
Angeles with their urban drilling operation.
It's real contrast. Critics point out that in
lower income areas of L .A., you have active
oil wells right next to homes and schools. But
in wealthy areas like Beverly Hills, the drilling
operations are hidden inside these big windowless
buildings, like the one at Beverly Hills High
School they call the Tower of Hope. Out of sight,
out of mind. And beyond just hiding them, critics
accuse them of improperly abandoning old wells,
leaving behind toxic sites that pose ongoing
health risks to nearby residents. It's cited
as evidence of a pattern. Maximize profit, minimize
cleanup costs, and use your legal power to fight
anyone who complains. Hashtag tag tag outro.
Wow, this has been a truly monumental deep dive.
We've traded Chevron all the way back to Star
Oil in SoCal, watched it become a seven -sister
that laid the groundwork for Saudi Aramco, and
tracked its growth through these landscape -changing
acquisitions. Golf, Texaco, Unocal, and of course
the huge, hard -fought $53 billion deal for Hess.
And we've dissected this breathtakingly massive
vertical engine that dominates everything from
the Permian Basin to Australian LNG. A scale
that was really captured by those record $36
.5 billion in profits in 2022 and that immediately
controversial $75 billion stock buyback. A move
that was then underscored by the symbolic decision
to move their entire headquarters to Houston.
And we really tried to connect the dots on this
deep, contradictory relationship they have with
the climate and with communities. On one side,
you have these forward -looking investments in
solar, hydrogen, fusion power, even lithium in
the smack -over formation. And on the other,
you have major fines for Clean Air Act violations
and this decades -long devastating legacy of
the Lago Agrio contamination, a $9 .5 billion
judgment they fought with a legal campaign that
included the... Well, the unprecedented prosecution
of the plaintiff's lawyer, Steven Donziger. It
really forces you to synthesize these two opposing
ideas. It does. Their slogan is the human energy
company. And it's meant to sound positive, like
they're helping the world change. But when you
contrast their investments in fusion, which is
all about the future of human ingenuity, with
the legal wars they've waged over toxic dumping,
which is all about avoiding a legacy of the past,
it raises a really powerful question for you
to think about. So what's the final takeaway
here? I think the key insight is this. Chevron
is betting that its sheer corporate scale and
its technological know -how will keep it dominant
for decades to come. But what truly defines the
cost of that human energy in the 21st century?
What is the real human and environmental price
of maintaining that dominant, vertically integrated
position, when that position is secured by both
cutting -edge technology and by decades of aggressive,
high -stakes litigation against the very people
who claim to have been harmed by your past methods?
That is the real measure of the energy they harness.