Oil giant Chevron Corp. will cut jobs from its worldwide refining, marketing and retail operations as the recession drags down gasoline sales, a spokesman for the San Ramon company said Tuesday.
Chevron won't decide until March the exact number of employees who will lose their jobs, said spokesman Lloyd Avram. The impact on Chevron's extensive California operations, which include headquarters and two refineries, is unclear.
But the shakeup could lead the oil company, America's second largest, to sell some of its refineries and pull out of unprofitable markets.
"The organization is going to be leaner and less complex, in order to be more profitable in the global market," Avram said. "It's going to have fewer positions and therefore fewer employees."
The company owns two of the state's largest gasoline refineries, in Richmond and El Segundo (Los Angeles County). Chevron has had a stormy relationship with Richmond officials and community groups, sparring with them over taxes and a proposed refinery expansion project that was blocked by a judge last year. Avram on Tuesday wouldn't discuss the fate of the Richmond refinery except to say that it would be reviewed along with all the company's other "downstream" operations, which include refining, marketing and retail sales. Chevron has about 18,000 downstream employees worldwide, 4,400 of them in California.
Oil market analyst Allen Good said Chevron's West Coast refineries are among the company's most profitable in the United States and probably won't be sold or closed.
"Those refineries may be safe," said Good, with the Morningstar market research firm. "It could be some of the smaller ones they have in the U.S. that could take the hit."
California refineries typically enjoy better profit margins than their counterparts elsewhere because the state uses its own gasoline blends made by a limited number of refineries.
Chevron's downstream employees learned of the cutbacks Monday in a video message from Executive Vice President Mike Wirth. The reorganization should be complete by the third quarter of this year, Avram said.
Like all oil companies, Chevron has seen profit margins at its refineries shrink with the recession, which has hurt sales of gasoline and diesel. Earlier this month, Shell Canada announced it would convert its Montreal refinery into a fuel storage center. And last year, the Big West refinery in Bakersfield closed after its owner, Flying J, tumbled into bankruptcy.