Chevron Corp. (CVX) – the second-biggest U.S. energy firm – has decided to withdraw its name from about 1,100 independently owned service stations in the eastern U.S. as part of strategic action to improve the company’s global downstream operations. The San Ramon, California-based oil giant said that it will pull out its brands from stores in Washington D.C. and 12 states from Indiana to South Carolina.
Chevron ships about 2.3 million gallons of gasoline per day to those areas, accounting for 8% of U.S. sales volume. The stations will no longer carry the Chevron and Texaco brands by the middle of 2010. Chevron would still supply more than 5,000 stations in the East.
With this move, Chevron becomes the latest oil behemoth after BP Plc (BP), ExxonMobil Corp. (XOM), and ConocoPhillips (COP), to cut back on retail operations, as it struggles to cope with the bearish refining margin environment. The pullout from motor fuels operations follows Chevron’s exit this year from marketing operations in Brazil and some African countries in a bid to save $300 million.
By lowering its retail profile, Chevron plans to focus on areas where it has a bigger and more dominant presence. Chevron is one of the largest publicly traded oil and gas firms in the world, based on proved reserves.
Chevron is engaged in oil and gas exploration and production, refining and marketing of petroleum products, manufacturing of chemicals and other energy-related businesses. We currently rate Chevron shares as Neutral.
Read the full analyst report on “CVX”
Read the full analyst report on “BP”
Read the full analyst report on “XOM”
Read the full analyst report on “COP”
Zacks Investment Research
