John S. Watson, who retired as Chevron Corp.’s chief executive officer in February 2018 after 37 years with the San Ramon, Calif.-based multinational oil company, received the American Petroleum Institute’s highest honor, the Gold Medal for Distinguished Achievement, on Nov. 11.
“His commitment to advancing a culture of safety, diversity, and inclusion for Chevron’s 50,000 employees who operated in 180 countries across the globe is a model for our industry,” API Pres. Mike Sommers said.
Watson took Chevron’s helm on Dec. 31, 2009, after 29 years with the company. He began as a financial analyst in 1980 and worked in several capacities before becoming a corporate vice-president responsible for strategic planning and acquisitions in 1998. Two years later, he led Chevron’s integration with Texaco Inc., which it acquired, and subsequently became Chevron’s chief financial officer.
He became president of Chevron International Exploration & Production in 2005 before being named the parent company’s vice-chairman in April 2009.
“I joined Chevron at age 23 out of business school where I studied finance and economics and became more attuned with the technical side of the business,” Watson told OGJ. “Our technical prowess has always been one of our advantages, and Chevron was able to participate not only in the shale revolution but also in advancements in deepwater technology.”
By the time he became chairman and CEO in 2010, the oil and gas industry itself had gone through some big changes, he recalled. One of the biggest was the growth of hydraulic fracturing and horizontal drilling to tap previously inaccessible deposits, which effectively turned the US from a net oil and gas importer to the world’s leading exporter.
A time of dramatic change
“Fracing and horizontal drilling have both been around for a long time. What really changed was putting the two of them together,” Watson said. “That intensified particularly over the past decade and gained traction between 2010 and 2015 and accelerated over the last 5 years.
“They were long-standing technologies which were combined and fine-tuned over many years. Because it’s such a repetitive process, you can have many trials and learn more as time goes by. We’ve certainly seen that learning curve accelerate in the last decade, and I expect we’ll see improvements going forward,” he said.
Financial discipline was crucial during this period, and Chevron fully embraced it, Watson said. “The company always has recognized that it’s in a long-cycle business. During my career, there were 50% price drops through five cycles. Oil prices the day I became CEO were in the high-80s, stayed there a while, and then dropped down into the 30s. We always focused on having a very resilient balance sheet and investing through the cycle,” he told OGJ.
Public attitudes toward the oil and gas industry have evolved over the years, especially since the 2010 Deepwater Horizon well blowout and spill in the Gulf of Mexico, he noted.
“There also was a growing recognition of our business’s importance. Every aspect of our lives seems tied to it, so it’s important that we operate in a safe and environmentally friendly manner,” Watson said. “At Chevron, we’ve continuously improved our environmental and spill-response performance, as have other members of API. It’s important to get this message out so we can strike a balance that we have the energy we need while meeting the public’s environmental expectations.”
In addition to serving as a former API chairman, Watson has served on the US Business Council’s executive committee and has been a member of the US Business Roundtable and National Petroleum Council. Watson also chaired the University of California at Davis’s Chancellor’s board of advisors, which aims to foster youth in science, technology, engineering, and mathematics.