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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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Chevron CEO: Shareholder Returns Are More Important Than Solar, Wind Investment

Shareholder returns are more important for Chevron than investing in wind and solar energy, chief executive Mike Wirth told CNBC in an interview.

"These [wind and solar] are technologies that are relatively mature. There is plenty of capital that's available. The returns in wind and solar are actually being bid down, and we've concluded that management in our company can't create value for shareholders by going into wind and solar."

Instead of directly investing in this mature field, then, Chevron would rather return cash to its shareholders, and they can then "plant trees, go invest in a wind and solar developer and have the right to do that with a growing dividend that comes out of our company."

Wirth's comments come days after the company made a $10-billion commitment to low-carbon energy over the next seven years, with the CEO saying that "Chevron intends to be a leader in advancing a lower carbon future. Our planned actions target sectors of the economy that are harder to abate and leverage our capabilities, assets, and customer relationships."

The announcement is the latest proof that emission-reduction activism is bearing fruit in the energy industry, especially combined with the news that Chevron is bracing for a proxy battle in the boardroom with activist hedge fund Engine 1, according to a Wall Street Journal report from last Friday. Engine 1 won three seats on the board of Exxon earlier this year, signaling that it was only the beginning of its crusade against the emission-heavy industry.

Chevron has said it was prepared for various contingencies, including activist shareholder activity. Apparently, it is also prepared to work for a lower-carbon future. Unlike most other oil majors, however, it would bet mostly on green hydrogen, carbon capture, and renewable fuels, including renewable natural gas.

By 2030, according to this plan, Chevron will be producing 40,000 mmBtu of renewable gas daily, along with 100,000 bpd of renewable fuels and 150,000 tons of hydrogen annually. The company also plans to capture and offset 25 million tons of carbon dioxide annually.

By Irina Slav for Oilprice.com

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Leave a comment
  • Mamdouh Salameh on September 16 2021 said:
    This is exactly what distinguishes American supermajors from their European counterparts, namely, they speak their mind with the courage of their conviction.

    Chevron is telling the world that it will maintain oil and gas as its core business where it can achieve the highest return for its shareholders. What the shareholders do with their dividends is their decision. They can invest in renewables, plant trees or keep them in the bank.

    However, Chevron like the whole oil industry is committed to reducing emissions from fossil fuels without reducing their use. Moreover, it is investing in the most advanced technologies to capture CO2 emissions.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • George Doolittle on September 16 2021 said:
    Investors prefer a well run business to any business driven purely driven by ahem "shareholder returns" ahem which definition is an unknowable.

    Your oil Company is not to be the Federal Government of the United States to put it bluntly though of course not the *WHOLE* of the Federal Government of the United States.

    Reatil should be booking profits at this time obviously and of course goes without saying. Never happens but management of any publicly traded Company has a fiduciary duty not to comment on day to day moves in their stock price would be an understatement.

    *IT IS ILLEGAL TO DO SO.*
    Long $rrc Range Resources
    Strong buy
  • John Galt on September 21 2021 said:
    Attempting to bully companies into unprofitable enterprises simply hurts humanity. It's too soon for solar and batteries to be a "good investment" for oil companies, period.

    Leftsts can never hold more than single thought in their head - "just think what GOOD I could do with YOUR money!" Except, THEIR idea of "good" invariably harms the poor. It is a criminal attitude, a mental illness. When prices get lower for alternatives, 8 billion "greedy" consumers will make sure the RIGHT decision gets made.

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