Unocal’s No-So-Big Move
Civic pride and the local economy can take a beating when bold out-of-towners turn homegrown companies into branch operations. The good news in ChevronTexaco Corp.’s agreement to acquire El Segundo-based Unocal Corp. is that the imagined civic slight will hurt more than the real economic pain.
Unocal had been morphing into Nocal (as in, “not in California”) well before Monday, when Bay Area-based ChevronTexaco agreed to write a $16.4-billion check for the company that began life in 1890 as the Santa Paula-based Union Oil Co. of California. The pain would have been more intense had the deal gone down prior to 1997, when Unocal sold its Union 76 gasoline stations and remaining California oil fields. Most of Unocal’s 6,000 employees now work in far-flung energy fields stretching from the Gulf of Mexico to the Asian Pacific region; only about 100 still work in Unocal’s corporate headquarters. Fittingly, the company’s motto is “improving people’s lives wherever we work.” For the lucky ones, that could soon mean San Ramon, site of ChevronTexaco’s corporate headquarters.
Unocal expanded with Southern California, providing the gas it needed to support its growing automotive habit. Its first gas station opened at 6th and Mateo streets in downtown Los Angeles in 1913. Its marketing department won the right to install orange and blue seats at Dodger Stadium after the company helped finance the ballpark. And Unocal’s original headquarters building in Santa Paula is now an oil industry museum.
Unocal also fouled the Pacific Ocean in 1969 with more than 3 million gallons of crude oil, which escaped after a blowout at a drilling platform off Santa Barbara. In December, the company settled human rights lawsuits brought by 15 villagers from Myanmar who blamed Unocal for forced labor, rapes and a murder allegedly committed by soldiers along the route of a natural-gas pipeline.
Big Oil always has been about getting bigger. Unocal no longer believed it was big enough to stand on its own in an increasingly expensive and global oil patch. Its $6.5 billion in annual revenue was dwarfed by ChevronTexaco’s $121.3 billion, its 1.75 billion barrels of oil and gas reserves but a drop in ChevronTexaco’s 11.3-billion-barrel reserve bucket. ChevronTexacoUnocal will be an even bigger company. The unanswered question is how the marketing department will fit that name on a gas station sign.
