Chevron Corp.: Time for an Image Makeover

Oct. 3, 2007
New advertising campaign targets Chevron's commitment to improve energy efficiency and environmental issues.

A message of environmental responsibility is coming from one of the most unlikely places these days. Chevron Corp., an IndustryWeek 50 Best Manufacturer for 2007, launched an advertising campaign on Sept. 30 to facilitate discussion about energy issues and inform the public about the company's efforts to address them.

The campaign first appeared as a two-and-a-half minute spot on "60 Minutes." The company created a total of four spots, which will debut internationally in Latin America, Europe, Africa and the Middle East on Oct. 5. Chevron has invested approximately $15 million in the campaign, according to Advertising Age magazine.

The television ad shows snapshots from around the world while a voiceover tells the audience about future energy needs and challenges as the world's population grows. It also talks about the different forms of energy the company produces outside of oil.

Indeed, the company is investing $19.6 billion in 2007 in various energy resources, according to its Web site. Chevron expects to spend $2.5 billion from 2007 to 2009 on alternative energies. But the company also points out fossil fuels will continue to be the world's dominant source of energy. In 2006 Chevron spent $13 billion on oil and gas exploration and production.

The campaign is an extension of an existing public relations drive called "Real Issues," which the company launched in 2005 with a series of ads and its Web site. The Web site features a forum to discuss energy issues, frequently asked questions and ad materials.

The site also provides a link to the company's recently launched Energyville interactive online game. At Energyville, players are asked to make hypothetical decisions about their city's energy supply and can view the results of their actions.

Meanwhile, profit and revenue continue to soar for the oil giant. Second-quarter profit totaled $5.4 billion, up 24% from the year-earlier period. For the first half of 2007, net income rose to $10.1 billion, or $4.70 per share, a 21% increase from $8.3 billion recorded during the same period in 2006. Revenue for the three months ended on June 30 totaled $54.3 billion, up from $52.1 billion in 2006.

Chevron Corp.
At A Glance

Chevron Corp.
San Ramon, Calif.
Primary Industry: Petroleum & Coal Products
Number of Employees: 62,500
2006 In Review
Revenue: $210.1 billion
Profit Margin: 8.32%
Sales Turnover: 1.55
Inventory Turnover: 29.2
Revenue Growth: 5.86%
Return On Assets: 13.62%
Return On Equity: 27.34%

But lately for the oil industry, success hasn't come without scrutiny. That was the case on Sept. 26 when the company said it would buy back $15 billion of its own stock. Critics have noted that gasoline prices remain high while Big Oil rewards shareholders instead of consumers.

"Chevron is free to do what it wants with its money, but this is going to fuel the fire for Congress to get involved," Tyson Slocum, director of the energy program for the consumer watchdog group Public Citizen, told the Associated Press. "The money they are funneling for shareholder goodies leaves less for other projects."

Rep. Bart Stupak, D-Mich., responded to Chevron's stock repurchase plan by reiterating his plan to back a new law that would require the federal government to address high gas prices, the Associated Press reported.

"Like the rest of Big Oil's recent record profits, this stock buyback is being financed by consumers who are gouged at the pump and who are at the mercy of Big Oil's manipulation of oil and gas prices," Stupak told the AP.

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