Any truth in the rumor?
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Interesting,... back in the 90's Chevron bailed (sold) the Gaviota Oil and Gas Plant, because: 1) County of Santa Barbara never granted the necessary permits for loading/unloading product; 2) increasing costs of regulatory compliance; and 3) future costs of site remediation. No idea where the tipping point for Richmond and El Segundo are, but sooner or later,... Hasta la vista,... Baby!
Texas pays Chevon for every out of state employee they relocate to Texas. It's like a dowry.
Very informative, Anonymous165308. These are the kind of posts that make a site like this useful. Thanks.
Chevron is one of five California taxpayers that pays California income tax based on property, payroll, and sales located in the state. All other corporate taxpayers pay California tax based on sales only. We told Sacramento this gives Chevron a financial incentive to reduce its California payroll and move jobs out of state. In 2010, we almost convinced the Calif. legislature to allow Chevron to switch to sales only taxation, but at the last minute a few key Democrats balked and Chevron got screwed. So Chevron saves California taxes when it moves people to Houston. But moving people costs money and you often lose good employees when you move them, particularly corporate-types who can get jobs at other Bay Area companies. Chevron moves small groups, a little at a time, where the move won’t lose too many people. But the only way to truly reduce California taxes is to sell Richmond and El Segundo, as property value, not payroll, is the main reason Chevron pays so much California tax.
You see? Anonymous164357 obviously went to school and learned something. He is correct in what he says. Thanks for your post.
Some 99% of major U.S. corporations are Delaware or Nevada corporations. This is basic business knowledge learned in Business Management 101.
Mr. Peabody, lash out like a little child. @Truth is a Bitch gave you a thrashing in a few words. Lol.
@The Chairman, go back to school... Chevron is not headquartered in Delaware, not even for tax purposes. It is incorporated under the corporation laws of Delaware. It is headquartered in San Ramon and will pay its corporate taxes based on California State tax law. We all know that the State of California is in serious financial trouble and they raid the coffers of a the big corporations. That's why some folks think Chevron will someday feel compelled to move its headquarters to Houston, TX.
Chevron employees living in California pay the highest combination of income taxes in the nation. They are not getting the "sweet" tax deal that is being thrown about. So, let them stay and pay. It shows how little they know about finance and economics.
Truth Is A Bitch and DJO,... BITE ME!
Foks, the actual headquarters of Chevron is Delaware, for tax reasons. The so-called "HQ" in San Ramon is just a nice place for the executives and their families to live. As others have pointed out, the company can call anywhere it's headquarters. However, it will in all likelihood wind up being Houston at the end of the day, more specifically part of that new 350 acre office park up in Spring... ;-)
I think @DJO makes an intelligent point and explains his reasoning. We all understand it's his opinion (and one I agree with). Now you come along, Anonymous162802, with your "Mr. Peabody" remark. It doesn't surprise me how many jerks there are out here commenting nonsense on this site and throughout life. But, I'll give you credit for lumping yourself in with your "all us morons" statement. You see, many times our own self value comes out in our writings.
Actually, 802, no, I'm not wrong.
Thank you, Mr. Peabody, for clearing that up for all us morons. Guess you've thought of just about everything, huh? No holes in YOUR argument, right? No way YOU could POSSIBLY be wrong, I guess.
There is no particular advantage to moving thousands of positions to Houston. Many wouldn't move and would need to be rehired in Texas. Wages are the same in Texas, so no reason to do that. No tax advantage to moving a corp HQ since most income from outside the state is sheltered. Chevron is a global company which can really locate anywhere in the world and just happens to have a long history in California (decades longer than elsewhere in the US) sot that is where we will stay.
Most of the positions moving to Houston are Upstream. All corp and service functions remain in California.
The land in Katy is to consolidate lab functions, potentially including Briarpark, Richmond, and others, over the next 10 years.
None of you ever really listened to the lyrics to "Hotel California"? All jokes aside, SoCal secured an extremely favorable tax deal with the state decades ago; you could even call it the ultimate tax deal. Chevron maintains a generous portion of the federal oil reserve in Cali, and Washington is quite happy with the arrangement, as well as the strategic advantage of West Coast defense. So, before the prognosticators start pulling answers out of thin air, think long term, my friends.
Yes, move east, then south central Texas.
now I see why they bought 103 acres in katy texas.not for sno cone stands...move east young man move east,,,
now I see why they bought 103 acres in katy texas.not for sno cone stands...move east young man move east,,,
I agree with you, Anonymous162291... in that the HQ will soon relocate to Houston, but there's no reason to insult the other opinions either. I think there are valid points mentioned here to why the refineries cannot be sold. There are no definites here. You neither are a "Captain of Industry". No insult intended.
Some real "Captains Of Industry" stuff, here! Very complex issues,... lotta in's an' outs. Thank goodness YOU morons don't run the business. HQ will move to Houston. Matter of time 'till the California refineries are sold. The state is toxic to the oil business. Let the idiots pay even more for their fuel. They deserve it.
Anonymous162271, you make a great point. The refineries we have are money-makers for Chevron in this time of low oil prices. Another poster made the point of these old refineries having a burdensome environmental clean-up cost attached to them. So there are valid reasons why Chevron won't or can't get rid of them. But, back to the main topic, Moving Headquarters to Houston... there's no impediment (IMO) for Chevron leaving California and moving it's headquarters in Houston.
Why would they sell the only segment of the business that is making a positive impact to cash flow? Downstream margins are excellent due to the low commodity prices. Chevron's reliance on upstream is far greater than the other majors, and is a primary reason Chevron is worse shape than others when oil prices bottom out.
Look at last quarters earning report, downstream had record earnings.
@The Chairman, I read your post and that's your opinion. Having to keep the refineries in California for whatever reason is one thing, but that doesn't stop the headquarters of Chevron from moving out of the state. And who says the Board of Directors has to move as well. A HQ location change requires the filing of some paperwork, that's all.
Ok, folks, first off, we are at the bottom of a very predictable cycle. Those who cannot learn from the past are doomed to repeat it, and that is what is happening in not only Chevron, but the industry at large. Secondly, Chevron could not even give away, with sweetener, Richmond or El Segundo. Both properties have leaked so much product into the ground that they are actually producing 800-1000 bbls/day from recovery wells, and have multiple barrier water injection wells surrounding the perimeter of the sites to prevent groundwater contamination. Funny how the town of El Segundo was originally constructed to house the refinery workers. In 1911, when the refinery was built, it was 25 miles south of LA, and way out of town (that's why they placed it there). Today, the average refinery worker could not even afford a home in El Segundo. Yes, the property value of the 2.5 square mile refinery is an estimated 5-10 billion USD, but it would cost upwards of 20+ billion to reclaim the site. So, trust me, Chevron is not moving headquarters anytime soon. And, no, Watson is not moving to Houston. The humidity is devastating to his complexion.
Relocating the HQ to Houston doesn't necessarily mean the Executives also have to move. They can keep their homes in California and even reran a small office. Moving the HQ only requires some paperwork to be filled and adhering to certain reporting duties. Essentially the new location will determine the businesses State taxes. If California is becoming a tax burden for Chevron, the company will do what's in the shareholders best interest, including moving its HQ to Houston. Why else did we buy and demolish the historic YMCA building next to 1500 Louisiana Street? It's the future building that will house our new headquarters.
Chevron will never move its official HQ to Houston with Watson as CEO. But HQ could end up being 25 people. Chevron has been trying to sell Richmond for 15 years. No takers.
@"CVX Oldtimer" - good post, I agree with you 100%. On California... Yes, they do not know where to stop, and we have already seen a massive exodus of corporations heading towards Texas, Arizona, Colorado, Nevada, Tennessee, Utah or Florida... Nestle, Sony, Charles Schwab, Occidental Petroleum, Toyota, TheChive, Campbell Soup, Nissan and Comcast, all of which have moved all or a significant portion of their work force out of state...
Anonymous161984, I concur 100% with you. Chevron's HQ will soon enough be in Houston. The refineries at Richmond and El Segundo do not necessarily have to be sold first, but it would be ideal. California uses us as a cash cow, but doesn't know when to stop squeezing. The city of Richmond screws us at every chance it gets and sucks us dry in taxes. If the Richmond refinery is blocked from being sold for any reason, Chevron will convert it to a bulk fuel storage terminal and retain ownership. The city of Richmond will lose a huge tax base since a bulk fuel terminal operation will require far fewer personnel. When the time is right, and beleive me, nobody will know until it's abruptly announced, we will be moving the HQ to Houston. In about 24 months sounds about right.
Not as long as Watson is at the helm, he just finished his new house here.
Watch it, in 24 months both Richmond and El Segundo will be sold. It's a tectonic shift right now in O&G, players are getting realigned
All depends on taxes.
Not unless Richmond and El Segundo are sold. Likely a lot of positions are moved to Houston though. That's been slowly happening anyway.