SAN RAMON — Chevron is moving its headquarters from the East Bay to Texas — a relocation of the high-profile oil company that deals a fresh blow to California’s wobbly prestige.
The energy behemoth, which first moved its home base to the Bay Area in 1879, will establish its head offices in Houston, Texas, as part of the company’s exit from its current headquarters in San Ramon.
The Bay Area’s primary business organization, the Bay Area Council, harshly criticized California political leaders for creating what they say is a sour business climate in the nation’s largest state.
“Chasing jobs and employers out of California is no way to run the economy,” said Jim Wunderman, the Bay Area Council’s president.
Besides Chevron, high-profile companies such as Oracle, Palantir, HPE and Tesla previously had decamped from California to other locales such as Texas.
“It’s an embarrassment for California that we’ve lost so many global companies because of misguided policies that make it incredibly difficult to do business here,” Wunderman said.
Chevron currently has 2,000 workers in San Ramon and 7,000 in Houston. For a decade or more, Chevron has increased its presence in Texas and decreased its footprint in the Bay Area, including San Ramon.
“This announcement is the logical culmination of a long process that has repeatedly been foreshadowed by Chevron,” said Alex Stack, a spokesperson for Gov. Gavin Newsom’s office.
California still has the world’s 5th-largest economy at $3.9 trillion, the governor’s office noted.
Newsom’s office, however, didn’t provide details on the state’s job market, which lags behind the nation.
Over the one-year period that ended in June, the number of California’s total jobs as measured by nonfarm payrolls inched higher by 1.3%. During that same 12 months, the United States job market grew by 1.7%, this news organization’s review of official federal and state labor reports shows.
“We’re proud of California’s place as the leading creator of clean energy jobs, a critical part of our diverse, innovative and vibrant economy,” Stack said.
Chevron CEO Mike Wirth and Vice Chairman Mark Nelson will move to Houston before the end of 2024 to better collaborate with senior leaders who already operate out of Texas, the company said.
With the departure of Chevron from San Ramon, the company’s primary remaining Bay Area presence will be its 123-year-old refinery in western Richmond.
It’s possible the exit of the administrative offices from San Ramon’s Bishop Ranch business park could trigger job cuts at some point.
Any staffing reductions arising from the company’s departure might not happen immediately, however.
“There will be minimal immediate relocation impacts to other employees currently based in San Ramon,” Chevron stated in a prepared release.
Chevron intends to maintain a San Ramon presence to manage the California operations that will remain after the headquarters vanishes.
Besides the Richmond refining complex, Chevron also operates a vast refinery in the Los Angeles-area city of El Segundo, as well as a network of more than 1,800 retail stations in California.
Chevron became one of the first occupants of San Ramon’s Bishop Ranch in the early 1980s when it bought a 92-acre site that eventually became known as Chevron Park.
San Ramon officials quickly looked to the future after Chevron revealed it was shifting its headquarters out of the East Bay city.
“San Ramon has a diversified local economy, and no single business or corporation’s move will have an outsized impact on local revenue,” the city posted on its website. “The San Ramon City Council will continue to prioritize a business-friendly environment.”
In 2022, Chevron sold Chevron Park, which it had developed into a vast headquarters complex, to an affiliate headed up by Sunset Development, the principal developer and owner of Bishop Ranch, a mixed-use neighborhood of offices, homes, shops, restaurants and hotel facilities in San Ramon.
Sunset Development paid $174.5 million to buy the Chevron Park complex from the energy giant. At the time of the purchase, the Sunset Development affiliate obtained a $157 million loan from Chevron USA to help finance the purchase of the 92-acre property, Contra Costa County property records show.
At the time of the purchase, Chevron and Sunset Development revealed that the energy company had leased space in BR 2600, a big office complex within Bishop Ranch.
“Sunset Development Co. has proudly supported Chevron’s real estate needs at Bishop Ranch for over 40 years,” said Alex Mehran Jr., president of Sunset Development. “Chevron’s recent relocation within Bishop Ranch represented a one-million-square-foot reduction in space and a shift from ownership to tenancy, providing them with long-term flexibility.”
Bishop Ranch officials said they would work with Chevron should further office space re-evaluations emerge.
“While we are disappointed to see the headquarters leave California, we will continue to provide our highest level of support for their real estate requirements past, present and future,” Mehran Jr. said.
The governor’s office described the departure of the Chevron headquarters as “old news” because it shifted some jobs to Texas at the time the company sold the Chevron Park site and leased office space a few blocks away in San Ramon.
However, Chevron had been shifting workers from San Ramon to Texas for numerous years prior to the sale of Chevron Park, which will become a new residential neighborhood over time.
Separately, the Richmond refinery faces the prospect of a new regulatory burden. Richmond voters will be asked this fall to determine whether the city can impose a tax of $1 for each barrel of oil refined at the Richmond complex.
Chevron said it might raise gasoline prices at its fueling stations should the measure go into effect.
As the dust settles over the departure from California of the state’s storied companies, Wunderman urged California’s political establishment to chart a course to a better business climate in the state.
“California’s elected leaders need to take stock of the decisions they’re making that affect millions of families and workers, impact the state budget and have grave consequences for the future economic health of this state,” Wunderman said.
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