Chevron Posts Q3 Profit

By Jennifer Hiller
Friday, October 30, 2020

Chevron on Friday reported an adjusted third-quarter profit as oil prices recovered from spring lows and spending cuts benefited operating results.

Chevron and its peers have slashed spending budgets this year on plummeting demand and crude oil prices that remain about 40% below where they began the year. Royal Dutch Shell Plc and BP Plc also posted higher-than-expected quarterly results after deep expense cuts this year.

The second-largest U.S. oil producer reported earnings of $201 million, or 11 cents per share, excluding one-time items. That compared with a profit of $2.9 billion, or $1.55 per share, a year earlier. Net loss including the effect of foreign exchange and charges was $207 million.

Chevron Chief Financial Officer Pierre Breber said it was too soon to say the worst of the pandemic-related decline in oil demand was over.
The outlook for energy consumption "depends on when the world - this country and other countries - get control of the pandemic and those activities resume. We don't know when that's going to be," Breber said.

Chevron is near the end of a year-long restructuring of its operations to reflect a prolonged period of low prices, Breber said. The effort will reduce its workforce by up to 15% of its 45,000 person staff.

Despite lower volumes, it posted modest operating profit in oil and gas production and refining by cutting expenses 12% and spending on new projects by 48%, excluding acquisitions, both from year-ago levels.

That helped offset cheaper fuel. While its oil sold last quarter for 63% more than in the second quarter, it still was well below the $47 a barrel price received a year ago.

"Third quarter results were down from a year ago, primarily due to lower commodity prices and margins resulting from the impact of COVID-19,” said Michael K. Wirth, Chevron’s chairman of the board and chief executive officer. “The world’s economy continues to operate below prepandemic levels, impacting demand for our products which are closely linked to economic activity.”

“We remain focused on what we can control – safe operations, capital discipline and cost management,” Wirth continued. “Compared to last year's third quarter, organic capital expenditures and operating expenses were down 48 percent and 12 percent, respectively.”

Chevron's oil and gas production in the third quarter was down 7%, compared with a year earlier, reflecting asset sales, curtailment due to low prices and contract agreements. Refining volumes recovered from a sharp second-quarter drop, while remaining below year-ago levels.

The company continues to give priority to its shareholder dividend even as cash flow from operations fell 57% from a year ago and turned negative in the third quarter.

In the top U.S. oil field, the Permian Basin shale field, Chevron expects output to dip to around 550,000 barrels of oil and gas per day, from 565,000 barrels per day this quarter, Breber said. It is likely to keep production there flat until the global economy recovers.

"The world doesn't need more supply," Breber said.

(Reuters)

Categories: Finance People Offshore Energy Industry News Earnings

Related Stories

Saipem Marks First Steel Cut for Tangguh UCC Project at Karimun Yard

Saipem Wins FEED Contract For Abadi LNG Project FPSO Module In Indonesia

Cheniere, JERA Ink Long-Term LNG Sale and Purchase Agreement

ADNOC Signs Long-Term LNG Deal with Hindustan Petroleum Corporation

BP, ONGC, Reliance Industries Ink Deal for Offshore Exploration in India

CNOOC Brings New Offshore Gas Field On Stream

Yinson, PTSC Get $600M Contract for Vietnam-Bound FSO

Valeura Energy, PTTEP Partner Up on Gulf of Thailand Blocks

SBM Offshore’s Jaguar FPSO Enters Drydock in Singapore (Video)

India Stretches Bids Deadline for 13 Offshore Deep-Sea Mineral Blocks

Current News

SPE Offshore Europe 2025 set to drive transformational change for the energy sector

Shipbuilder Delivers Fast Crew Boat Pair to Aesen

Norwegian Oil Investment Will Peak in '25

Saipem Marks First Steel Cut for Tangguh UCC Project at Karimun Yard

Saipem Wins FEED Contract For Abadi LNG Project FPSO Module In Indonesia

Cheniere, JERA Ink Long-Term LNG Sale and Purchase Agreement

Shelf Drilling Lands New Jack-Up Contract in Vietnam, Extends Egypt Deal

Seatrium Engages Axess Group to Clear FPSOs for Brazil Deployment

Inpex Picks FEED Contractors for Abadi LNG Onshore Plant

Inpex Kicks Off FEED Work for Abadi LNG Scheme Offshore Indonesia

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com