Chevron Corp. is looking for a new leader as the company continues to adapt in a climate of prolonged low oil prices.
A report that CEO John Watson is planning to step down surfaced this week in The Wall Street Journal, but no official announcement is expected until next month.
According to the WSJ, the move to replace Watson is indicative of a wider industry trend of favoring CEOs who are more pragmatic than bold. So far, the WSJ reports that the mostly likely replacement is Michael Wirth, a refining specialist who is currently vice chairman at Chevron. Wirth would bring years of experience cutting costs at oil and chemical facilities.
In fact, if Wirth takes the helm, he would be the fifth CEO at a leading oil company — alongside Shell, Exxon, PLC and Total — who is a former refining specialist. BP would be the only oil company left with a CEO from the days of $100-a-barrel oil.
Like every major oil company, Chevron has struggled to keep profits up in the last few years while oil has hovered around $50 a barrel. In 2016, the company lost $497 million and cut its global workforce by 6,300 employees to 55,200.
But those cost-cutting measures are starting to pay off. The company posted a profit $1.45 billion in the second quarter of this year, buoyed by both its upstream (exploration and drilling) and downstream (refining) operations.
Overall, returns to investors at Chevron have also been higher than at most other oil companies during Watson’s seven years at the top. However, many of the major projects Chevron invested in during Watson’s time as CEO have also cost far more than initial projections.
If Watson is indeed stepping aside, the transition is expected to be amicable and carefully orchestrated. The WSJ report was based on unnamed sources. So far, Chevron has yet to confirm if the report is true.