Chevron
Company Overview
Chevron is one of the world's largest integrated oil and gas companies, with operations spanning exploration, production, refining, marketing, and chemicals across more than 100 countries. Berkshire initiated a major Chevron position beginning in late 2020, building it to approximately $19 billion — making it one of Berkshire's four or five largest equity holdings.
Investment Story
2020: Initial purchase. Berkshire began buying Chevron shares in Q4 2020, when oil prices were depressed by COVID-related demand destruction. Buffett said relatively little about the Chevron position initially, but the purchase reflected his view that integrated oil majors with strong balance sheets, low-cost production, and disciplined capital allocation would generate adequate long-term returns.
2022: Sizeable position disclosed. By Q1 2022, Berkshire had built a Chevron position of approximately $26 billion — its fourth-largest equity position. The timing was favorable: oil prices surged following Russia's invasion of Ukraine, and Chevron's stock appreciated substantially from Berkshire's average cost. Within a year, a position built at around $100-110 per share was generating paper gains at prices well over $160.
Investment thesis. Buffett pointed to Chevron CEO Mike Wirth's capital discipline — the company had significantly reduced its capital spending budget during COVID and committed to maintaining that discipline as prices recovered, prioritizing shareholder returns (dividends and buybacks) over production volume growth. This is the exact management behavior Buffett rewards with capital commitment.
2023: Some reduction. Berkshire partially reduced its Chevron position in 2023, bringing it to approximately $19 billion. The reduction likely reflected valuation — as oil prices and Chevron's stock moved higher, the margin of safety narrowed relative to long-term intrinsic value estimates.
Buffett's Own Words
*Communications, Inc. . . . . . . . . . . . . . . . . . 2.7 3,449 48,498,965 Chevron Corporation . . . . . . . . . . . . . . . . . . . . . . . . 2.5 4,024 4,096 400,000,000 The Coca-Cola Company . . . . . . . . . . . . . . . . . . . . . 9.3 1,299 21,936 52,975,000 General Motors Company . . . . . . . . . . . . . . . . . . . . 3.7 1,616 2,206 81,304,200 Itochu Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 1,862 2,336 28,697,435 Merck & Co., Inc. . . . . . . . . . . . . . . . . . . . . . . . . . *
Communications, Inc. . . . . . . . . . . . . . . . . . . 2.2 2,496 38,245,036 Chevron Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . 2.0 3,420 4,488 400,000,000 The Coca-Cola Company . . . . . . . . . . . . . . . . . . . . . . 9.2 1,299 23,684 52,975,000 General Motors Company . . . . . . . . . . . . . . . . . . . . . . 3.6 1,616 3,106 89,241,000 ITOCHU Corporation . . . . . . . . . . . . . . . . . . . . . . . . . 5.6 2,099 2,728 81,714,800 Mitsubishi Corporation . . . . . . . . . . . . . . . . . .
American Express, Bank of America, Chevron, Coca-Cola, HP Inc., Moody’s, Occidental Petroleum and Paramount Global. In addition to those eight investees, Berkshire owns 100% of BNSF and 92% of BH Energy, each with earnings that exceed the $3 billion mark noted above ($5.9 billion at BNSF and $4.3 billion at BHE). Were these companies publicly-owned, they would replace two present members of the 500. All told, our ten controlled and non-controlled behemoths leave Berkshire more broadly aligned with the country’s eco
Investment Lessons
Energy security and commodity pricing create genuine long-term investment cases. Oil and gas will remain critical energy sources for decades as the energy transition requires substantially more time and capital than markets expected in 2021. Integrated majors like Chevron — with diversified production assets, significant downstream operations, and strong balance sheets — are significantly more resilient to oil price cycles than pure-play producers.
Management capital discipline determines oil company investment value. Two oil companies with identical reserves can generate dramatically different long-term shareholder returns depending on whether management prioritizes production growth (often at suboptimal returns) or shareholder returns (dividends and buybacks). Chevron's post-COVID capital discipline — maintained even as oil prices recovered — is what distinguishes it from peers who reach for volume at any return.