Mike Wirth, currently vice chairman of the board and executive vice president of midstream and development at Chevron.

[Editor's note: this story was updated at 8 a.m. CST Sept. 29.]

Chevron Corp. (NYSE: CVX) Vice Chairman Mike Wirth will become CEO next February, replacing the retiring John Watson, the oil and natural gas producer said Sept. 28.

The transition brings an executive with experience in the cost-cutting world of refining to Chevron's corner office as the industry emerges from a two-and-a-half year rout in crude prices that has squeezed revenue.

Reuters reported the change of leadership last month, citing a source close to the matter.

Wirth, an engineer by training, has worked at Chevron since 1982 and previously ran the company's pipeline and chemicals and refining businesses.

"Mike was chosen for his track record of accomplishment," Watson said in an interview. "He is well known for his time in our downstream portfolio and his work on cost" control.

The move copies rival ExxonMobil Corp. (NYSE: XOM), which this year named refining expert Darren Woods as its CEO, a step seen as prioritizing cash generation to protect payouts to shareholders above pricy exploration projects.

The CEOs of rivals Total SA (NYSE: TOT) and Royal Dutch Shell Plc (NYSE: RDS.A) also have experience in refining.

Chevron's board officially voted on Sept. 27 to give Wirth the CEO post in addition to the role of chairman.

Watson said he told the company's board late in 2016 he was thinking of retiring as large expansion projects near completion in Australia and Kazakhstan and the company taps more of its low-cost shale acreage in the Permian Basin.

"$50 oil is not easy. But we're as well positioned as anyone else," Watson said.

Chevron declined to make Wirth, 56, available for an interview.

Watson, who will not hit the company's mandatory retirement age of 65 for another four years, became CEO in 2010.

The company's growth under him has not been painless. Chevron has struggled with cost overruns at two Australian LNG projects.

"It's fair to say we've done some things well and there's areas we can improve," he said. "But we've dramatically outperformed our peers."

He pointed out that Gorgon, one of the LNG projects, was already profitable and the other should be as it comes online later this year.

Wirth will also have to contend with growing uncertainty about Chevron's operations in strife-torn Venezuela, where it is the only remaining major U.S. oil producer.

"We have every intention of staying there," Watson said. "Venezuela is among the leaders in [oil] reserves worldwide."

Watson said he had no plans to work for the U.S. government or elsewhere in the oil industry after retirement. He declined to say what he would do next, though said he was considering options.

Last year, Watson earned $24.6 million in pay, share options and bonuses, up from $22 million in 2015. Wirth was paid $9.1 million last year, up from $8.1 million in 2015.

In a related move, Watson said that Mark A. Nelson will become vice president of midstream, strategy and policy, effective Feb. 1. In his new role, Nelson will be responsible for the company's supply and trading, shipping, pipeline and power operating units. He will also oversee corporate strategy, as well as policy, government and public affairs.

Prior to his current position, Nelson, 54, served as the president of international products, responsible for the refining and marketing businesses in Europe, Africa, Middle East and Asia. Before that, he was president of Chevron Canada.

Shares of Chevron were up 0.4% on Sept. 28 at $117.91. The company is set to report quarterly earnings on Oct. 27.