Clement sent a message to John Watson – Chief Executive Officer and Chairman of the Board of Chevron Corporation email address that said:
It suffice me to say that it is a pleasure to be writing to you on this season of Christmas. Compliment of the season! The company is about to go into a new Financial quarter in 2017 come next month. At this point it is important for the business to reflect on her experiences since the low oil price started in 2014. It is almost three years and the Industry has experience a low Reserve Replacement Ratio due to the low exploration activities and little or no major discovery since the downturn.
In this business just like any business, Competitors activities is key to be noted. The Super major Shell has since re-strategised there Business Model on probably oil price between $30-$40 per barrel as a project screening value (PSV) for most new Project. This has also necessitated an improvement on recruitment for the team that will work in those projects and sustainance of the future of the business if this downturn persists for a decade or more.
I am aware Chevron at the moment still has a ban on recruitment. This low price regime may persist for a decade from analysis. Slow down on major new discoveries may impact on the Compans position as a leader in the energy industry. I hereby challenge the management of the company to build a new business plan with a project screening value of $30-$35 per barrel, renegotiate service contracts with a major cut in capital expenditure (CAPEX), and renegotiate employment contracts from employees to contractors which will allow a cut in the operating expenditure (OPEX). In this coming financial year there is a need for major exploration projects be resumed and a ban in recruitment lifted. These will cause an increase in the Reserve Replacement Ratio and sustain the future of the business.
I would appreciate if I can get a feedback of the approach that the business is taking for this coming financial quarter one.