Adios, Californy

After 145 years Standard Oil of California (SOCAL), with roots in the great state of California almost as old as the state itself, is vamanosin.'

The Board of Directors said "Mike, move away from there"

Said "Californy is the place you ought to flee"

So they loaded up the truck and they moved to...Houston

...To have a heapin helpin of its hospitality.

Above, the first SOCAL emblem, dated 1931

What an amazing history, Chevron's; from the very first commercial oil well in California in Pico Canyon, North of Los Angeles, in 1876...

To this years production start up of its Anchor Project in the Green Canyon of the Gulf of Mexico, with primary producing resevoirs 35,000 vertical feet below the water line, having over 20,000 PSI of bottom hole pressure...

It's was a helluva ride from San Ramon.

Chevron's earliest predecessor, Pacific Coast Oil Co., was incorporated in 1879 in San Francisco. The first logo contained the company name against a backdrop of wooden derricks set among the Santa Susana Mountains that loomed over Pico Canyon. This was the site of the company's Pico No. 4 field, California's earliest commercial oil discovery.

California Star Oil Works became Pacific Coast Oil Company in 1879 and drilled a lot of shallow, low oil gravity wells in the Pico Canyon area, crafted a distillary like refinery processes that could make this Pico oil into good grade kerosene and, on the bottom end of the process, a sort of fuel oil that could be burned in heaters, etc. Those products were shipped all around the West Coast and eventually put on trains bound for the East.

John Rockefeller formed Standard Oil of California (SOCAL) and bought Pacific Coast in 1906 for $761,000. Our old friend, Edward L. Doheny of early Mexican oil fame, began developing his oil discoveries north of Los Angeles and the California oil industry was going wide open by 1908. Standard refined and marketed a lot of that oil.

SOCAL's first attempt at actually looking for and producing oil wells in California occured in the Midway-Sunset Field near Taft in 1911. It made a 1,500 BOPD well in Midway, right, and went on to drill thousands of wells in the field. Midway has over 3. 2 G BO of UR to date and is now in steam flooded EOR, headed to 4 billion barrels. There are 12,ooo wells in Midway-Sunset Field.

SOCAL and the Texas Company (Texac0) occassionally partnered with each other as the Texas and Louisiana Gulf Coast Basin was being developed in the early 1900's, Texaco doing a most of the finding and SOCAL doing the buying and refining. So ruthless were these two companies with regard to competion for leases and product market share, SOCAL and The Texas Company were often called the "terrible twins."

SOCAL made a major discovery in Bahrain in 1932, then scooted across the Persian Gulf into Saudi Arabia to make a discovery in the Dammam Pennisula that would forever change the world. You may read more about this amazing era in world oil exporation in a four part series of posts on Oily Stuff starting here, with https://www.oilystuff.com/single-post/jabal-umm-er-rus-1933

SOCAL adopted its famous three, red, white and blue chevrons emblem in 1931 and over the years it began rebranding some of its retail outlets in California into the name, Calso.

Meanwhile, SOCAL's work in the Middle East led to a partnership with the Saudi's that lasted for several decades by and through a coalition with other American integrated oil companies called the Seven Sisters. SOCAL made sure The Texas Company was one of those sisters. By 1980 all American oil interests in the KSA were nationalised by ARAMCO.

Above, McElroy Field Discovery; Gulf Oil, 1934. For more on McElroy Field and the mess Chevron is in because of it, please read, https://www.oilystuff.com/single-post/mcelroy-field-1934

In 1984 SOCAL merged with Gulf Oil Company of Pittsburg and changed the name of Gulf wells, infrastructure market outlets to SOCAL. It sold retail outlets in Pennsylvania to a 3rd party and to this day you will find no Chevon gasoline stations in Pittsburg, even though it maintains a large office and regional corporate structure there.

In 2001 SOCAL bought its old pards', Texaco, for $45 billion and renamed the company Chevron Texaco until 2005 when the word, Texaco was dropped completely and Chevron became Chevron.

Left, I operated an old Texaco Field in S. Texas and found lots of old goodies laying around in the dirt, this one from the late 1930's.

Above, 1941 Unocal well on fire near Santa Fe Springs, California.

In 2005 Chevron bought Unocal, also a California based company, for 18.5 billion dollars. In 2020 it bought Nobel Energy for $13 billion.

Just a few months ago it bought Marathon.

Today Chevron it is the 2nd largest oil company in the United States, behind only Exxon, and the fourth largest publically traded company in the world with a market cap of $100 billion.

I don't think there is much love lost between these two U.S. oil giants. Chevron, trying to get foot hold into Guyuna, wants to buy Hess and Exxon is mucking up the acquistion on a preferential right to purchased provision in Hess's Joint Operating Agreement in Guyana. Exxon bought into that discovery and wants more.

Chevron, on the other hand, is doing some big work in the Gulf of Mexico...

Our Take:

And just like that, to quote Forrest, 145 years of rich, wonderful heritage and history in California is over for Chevron. Its outta there. On the way out the door it has to pay $550 MM to the City of Richmond, somewhere near San Francisco, naturally, to avoid an enourmous tax increase on finished product from its refinery.

Then there is something called an exit tax in California that Chevron might have to pay, to California, just to leave, based on its total assets.

Things are not going well for hydrocarbons in Californy; you can no longer mow your grass or blow the driveway out there unless it with batteries, the state likes to sue Texas all the time for high natural gas prices; its OK to drill wells in the Gulf of Mexico, but not the Santa Barbara Channel, and in spite of hydrcarbons still providing 50% of its energy needs, including the highest gasoline consumption rates in the country, no operator can drill a well within 3/4 mile of a home anymore, a precursor to the state plugging all oil and gas wells, forever, by 2045.

Though intent on running off the hydrcarbon industry completely as fast as possible, in 2023 reneweable energy only provided California with 41% of its electrical needs.

California's current governor, Alfred E. Neuman, or whatever his name is, wants to increase taxes on excessive profits from oil corpations like Chevron; his call on the definition of excessive. Naturally. The oil and gas industry in California currenty makes up 2.5% of the state's GDP and already pays over $40 billion a year in state and local taxes.

Today, 8.15, Californy, in spite of saying it does not need, or want fossil fuels anymore, is proposing a bill demanding that California refineries keep a certain product surplus on hand in case of emergencies. I guess that means cloudy, rainy days.

“For more than 50 years, Big Oil has been lying to us – covering up the fact that they’ve long known how dangerous the fossil fuels they produce are for our planet,” Newsom said. “California taxpayers shouldn’t have to foot the bill for billions of dollars in damages – wildfires wiping out entire communities, toxic smoke clogging our air, deadly heat waves, record-breaking droughts, parching our wells.”

Left, California taxpayers stuck on the 405 in Los Angeles, obviously held at gun point by evil Chevron

So, Chevron got out just in time.

In fact, California is the No. 1 state in the union for people... leaving.

This sort of migration eastward is like the Grapes of Wrath in reverse, one newspaper commenter wrote; during the depression everybody from the Midwest fled to California to pick fruit for two bits a day, it was the only way they could survive...now they are hauling ass back to the middle of the country for the same reasons. Survival.