As far as news announcements go, this one was pretty surprise-free. John Watson’s retirement announcement yesterday as Chairman of Chevron was not a surprise, and neither was his pick to lead the oil giant.
Plans for Michael Wirth to become Chevron’s CEO and chairman were reported this past summer and were telegraphed by Wirth’s appointment to vice-chairman earlier this year.
“He has the right values, knowledge and experience,” Watson said in a statement. “And has established a strong record of accomplishment in his 35 years with the company.”
“Twenty years ago, the industry might have been stunned by such a pick, but that was then.”
Perhaps the least surprising thing of all is Wirth’s background. He is an engineer who served as Chevron’s president of global supply and trading from 2003 to 2006, leading the company’s worldwide supply and trading operations.
Twenty years ago, the industry might have been stunned by such a pick, but that was then. Today, oil prices are in a ditch, driven lower by the revolution in U.S. shale production. A slow-growth recovery, rising fuel economy standards and an increasing reliance on cheap natural gas are also tamping down demand.
Across the industry, Chevron and its rival supermajors are leaning on executives with experience in refining, supply and production operations to squeeze out profits — rather than more swashbuckling figures with a background in exploration.
Earlier this year, Exxon Mobil Corp. named Darren Woods as CEO, who previously served as president of the oil giant’s global refining and supply company. Royal Dutch Shell CEO Ben van Beurden and Total S.A. chairman and CEO Patrick Pouyanné also have backgrounds in refining and supply.
Taken together, it represents the biggest change for Big Oil in decades as a new generation of leaders tackle an entirely new set of problems — in an entirely new kind of world that no one predicted just a decade or so ago. If the picks are unsurprising, the world that lies ahead should be anything but for the industry.
“Mike is a proven leader who is ideally suited to lead Chevron into the next chapter of our history,” Watson said in a statement. What that history will be is anyone’s guess.