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Chevron brings Africa/Latin America branch to Houston: MONEYMAKERS
(Houston Chronicle (KRT) Via Acquire Media NewsEdge) Jul. 5--Chevron Corp.'s headquarters is in San Ramon, Calif., but the second-largest U.S. oil company behind Exxon Mobil Corp. is increasing its presence in Houston. Chevron recently divided its international exploration and production division into three units, and the Africa/Latin America headquarters landed in Houston.
Headed by division president Ali Moshiri, promoted from managing director of Latin America, the unit took over the 48th floor of what used to be Enron's headquarters in downtown Houston.
Moshiri recently spoke with Kristen Hays about the division, why it's in Houston and challenges confronting international oil companies that face shrinking access to oil and gas.
Q: Why did Chevron place this division in Houston rather than at its headquarters in San Ramon, Calif.?
A: The decision was made by the corporation to take the International -- traditionally we had North America and International -- and divide it into three regions. The regions are Africa/Latin America, Europe/Eurasia/Middle East and Asia/Pacific.
The Asia/Pacific is in San Ramon. The Europe/Eurasia/Middle East is in London and North America and Africa/Latin America in Houston. We want to have a presence in Houston for the international side of our business. Really, Houston is the center of the oil and gas industry for Latin America. And it's becoming, more and more, a center for Africa. That's because most of the activity and investments in West Africa are related to offshore development. And the capability and the capacity is in Houston, from the contracting point of view and from the technology point of view with the service providers that provide various types of activity to the Gulf of Mexico.
Our company recognizes that Houston is a very basic part of the equation in our success. We've got close to 10,000 people working here in Houston.
Q: Last year Exxon Mobil and ConocoPhillips walked away from their operations in Venezuela rather than give up majority control to the country's government-controlled oil company, Petroleos de Venezuela, as required by a decree from Venezuelan President Hugo Chavez. Chevron stayed as a minority partner. How are things going there now?
A: We've been in Venezuela for many years, and we have a great position in Venezuela. We continue to work with PDVSA and the government.
In our business, the success comes from two things. One is having a good asset. The other is managing your relationships. You've got to have both.
We work very closely with every government. We get engaged on the business side, and how we can create value for both sides in a win-win situation.
Q: Venezuela illustrates how international oil companies, or IOCs, are increasingly struggling with shrinking access in resource-rich countries with government-controlled national oil companies, or NOCs. How do you approach such access worries?
A: The relationship between the IOC and NOC has to go into more collaboration. Collaboration is basically engagement, understanding, working on the issues. We can all recognize that we've got a responsibility, and that is to provide energy to feed the global system. No longer is energy a U.S. issue. It's a global issue. We've got to work on it as a global issue. If you're an exporting country, you've got to think the same way, that energy has to be provided to drive the global economy.
Q: NOCs used to trail IOCs in terms of ability, but many have become increasingly savvy with talent and technology. Do you think IOCs could be rendered obsolete in resource-rich areas with capable government-controlled oil companies that say they can find their own oil and gas with help from a service company?
A: The collaboration is also between us and the service providers. We are not going to do what they can do, and they shouldn't do what we can do. That creates inefficiency.
We need both. In this era, this issue of collaboration has to be articulated to the point where there is no confusion. Some NOCs are saying, for example, we don't need an IOC, we can go to the service company.
I'll be honest with you, they need them, but they need IOCs. We need NOCs, and we need government.
Everybody has to work together, and everybody has to understand the common objective -- providing energy.
Q: The debate over whether off-limits areas off U.S. coastlines should be opened to exploration is thriving amid record-high oil and gasoline prices. What do you think about opening up areas off the West and East coasts and the eastern part of the Gulf of Mexico for drilling?
A: I think the opportunity has to be there for allowing more exploration in the United States. We would be very sensitive to the environmental aspect of it. But if you're expecting other countries to open their resources to us, they can look at us and see we don't open our own resources to development. We are perceived as a taker. We have to come across as a concerned consumer. And I believe any concern out there can be addressed.
kristen.hays@chron.com
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Copyright (c) 2008, Houston Chronicle
Distributed by McClatchy-Tribune Information Services.
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