Chevron Corp. has announced plans to relocate its headquarters from California to Houston, a win for the Lone Star State, which has seen its number of corporate relocations fall sharply in recent years.

The oil and gas giant will move its corporate functions from San Ramon, California, to Houston over the next five years, it said in a Friday morning news release. Chevron Chairman and CEO Mike Wirth and Vice Chairman Mark Nelson will relocate to Houston before the end of 2024 to be near other company leaders, the release states.

Chevron already has significantly more employees in Houston than San Ramon, at about 7,000 and 2,000, respectively. The move will have minimal impact on employees based in San Ramon, and positions in support of Chevron’s California operations will remain there, according to Chevron.

Chevron’s relocation is unlikely to come as a huge surprise since California leaders have worked to force a transition away from oil and its related products, Forbes reported. Houston is known as the Energy Capital of the World, with about 40% of its economy directly or indirectly tied to oil and gas.

While it has lightened its load over the past decade, Chevron has a significant commercial real estate footprint in Houston.

The corporation owns two Downtown buildings known as the Chevron Towers. Chevron fully leased 1400 Smith Street, a 50-story, 1.2M SF building, in 2006 before purchasing it in 2011.

It also owns the 40-story, 1.3M SF 1500 Louisiana Street. The two buildings, connected by a sky bridge, were previously known as the Enron Towers.

Chevron U.S.A. last year bought 77 acres in Bridgeland, a Howard Hughes Holdings master-planned development in northwest Harris County, with potential plans to establish a research and development campus.

Chevron denied that it would move its headquarters from San Ramon to Houston in 2022 when it exited and sold its 92-acre headquarters campus in San Ramon and moved 200 employees to Houston.

But speculation remained. Ed Curtis, CEO of economic development network YTexas, told Realty News Report in 2022 that an HQ move wouldn’t surprise him.

“They call it the Texas Two-Step,” Curtis said. “The first step is they move a bunch of people in and say: ‘I’m not moving my headquarters.’ And eventually they move their headquarters and when they do, it’s seamless.”

The number of corporate relocations to Texas has dropped, from a peak of 79 in 2023 to 17 in 2023, according to data from the Texas Economic Development & Tourism Office of Gov. Greg Abbott.

But the proportion of businesses coming from California remains significant. There have been 149 California headquarters relocations to Texas since 2015, with California businesses making up nine of the 17 relocations in 2023 and three of the seven so far this year.