Chevron Corp. (NYSE: CVX) CEO John Watson will step down from his position by the end of next month and most likely replaced by Vice Chairman Mike Wirth, sources told the Wall Street Journal and Reuters.
Wirth is Chevron's vice chairman and an oil refining specialist, but also hold a diverse portfolio with the company such as management with the fossil fuel unit and running Chevron’s trading hub that buys and sells crude oil, natural gases, and petroleum products. He also plays key roles in corporate business affairs and development.
The sudden change comes as pressure grows on the industry to further cut costs and control spending. Chevron directors see Mr. Wirth’s years of experience wringing costs out of big plants that process fuel and chemicals as a critical need in a new era for oil markets defined by $50-a-barrel crude, according to the Wall Street Journal.
Watson and Wirth both refused to confirm the report on Tuesday. Chevron spokesman Kent Robertson refused to comment either as he said in a statement to CNBC, "As a practice, we do not comment on rumor or speculation.”
"He (Watson) may see it as a good time to step down and allow fresh management to take Chevron further," said Brendan Warn, an equity analyst with BMO Capital Markets, which advises clients to buy Chevron's stock.
Watson agreed to terms to step down as CEO before Chevron’s mandatory retirement age of 65 for new executives to step up and take leadership of the giant company.
“Big oil is turning toward very disciplined, returns-centric leaders who can manage razor-thin margins in disruptive, volatile markets,” said Les Csorba, who advises energy companies on CEO succession, “This is the answer for these companies as low prices continue.”
When Watson took position of CEO back in 2009, shares were trading at around $76.99, throughout his CEO term, shares have increased to an all time high of $133.57 back three years ago.