Critics often crash Chevron Corp.’s annual shareholders meeting to demand that America’s second-largest oil company change its ways.
This year, they’re also demanding that Chevron change its management.
Their primary reason? Ecuador. That country’s courts have slapped Chevron with a $19 billion judgment over oil-field pollution, and Chevron has refused to pay. The company has even filed a counter-suit in the United States, charging the Ecuadorans’ lawyers with extortion.
The Ecuador case has led to tense moments at many Chevron shareholder meetings over the years. This time, the activists are focusing their ire on Watson. Although he only took the helm at Chevron in late 2009, Watson played a key role in Chevron’s 2001 acquisition of Texaco. It was Texaco — not Chevron — that used to drill for oil in Ecuador, working with state-owned oil company Petroecuador. The pollution lawsuit was originally filed against Texaco, with the focus shifting to Chevron after 2001.
The activists argue that Watson did a poor job vetting the lawsuit during the Texaco acquisition. And his strategy of aggressively fighting the verdict, they say, will eventually fail, exposing the company and its shareholders to a major expense.
But Chevron has scored some key victories lately in the long-running suit, which the company calls a massive extortion scheme. While it’s far from over, it’s also far from certain that Chevron will ever have to pay. To get a better sense of why that is, click here, and read on.
