Chevron to relocate to Houston

Chevron is relocating to Houston from its headquarters in San Ramon, California, the company announced Friday.

Why it matters: The move by the second-largest U.S. oil company marks another major California corporation relocating to Texas and further cements Houston's position as the so-called energy capital of the world.

The big picture: Chevron chairman and CEO Mike Wirth says the move is to be "closer to the core" and epicenter of the industry and is "concluding a process that has been underway."

• "We have key partners that are there: suppliers, vendors, the universities that we do a lot of research with and recruiting from are there. And so it's a natural place for companies in our industry to have their home office and headquarters," Wirth told Bloomberg .

State of play: Chevron has increasingly been focusing on Houston. In 2022, Chevron compensated its California employees who were willing to relocate to Houston, and last year the company bought more than 77 acres in Cypress for a possible research and development campus.

• Chevron currently has roughly 7,000 employees in the Houston area and approximately 2,000 employees in San Ramon, per the Friday news release.

Between the lines: Regulatory policies in California that discourage investment by businesses are a key reason for the relocation from the company's home base of over 140 years, Wirth said.

• "We believe California has a number of policies that raise costs, that hurt consumers, that discourage investment and ultimately we think that's not good for the economy in California and for consumers," Wirth told the Wall Street Journal.

What they're saying: Local leaders are welcoming Chevron's move.

• "Texas is your true home. Drill baby drill," Gov. Greg Abbott said on X Friday morning.
• Mayor John Whitmire said he got a call in the morning from Chevron confirming the plan to move to downtown Houston, saying "it's an exciting day to be the mayor of Houston … They're bullish on Houston, and they have confidence in my administration, that we will address challenges that I inherited like public safety, infrastructure and also the city finances."

"This announcement is the logical culmination of a long process that has repeatedly been foreshadowed by Chevron," a spokesperson for California Gov. Gavin Newsom's office said. "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."

Flashback: Chevron's relocation plans come weeks after Elon Musk said X and SpaceX would move their headquarters to Texas from California.

• Those moves are in response to a new law that bars school districts in California from requiring that schools notify parents if their child requests a pronoun change.

The big picture: Chevron would become the region's second-largest publicly traded company, following Exxon Mobil, which relocated to the area from Irving, Texas.

What's next: The company's senior leadership, including Wirth and vice chairman Mark Nelson, will move to Bayou City by the end of the year.

• The full transition will happen over the next five years, per Chevron.