Chevron posts third-quarter earnings of $1.3 billion

Chevron Corp. reported third-quarter earnings of $1.3 billion, down from $2 billion in the third-quarter 2015. Companywide global production during the quarter was 2.51 million boe/d, down from 2.54 million boe/d a year ago.

The multinational firm says production increases from major capital projects, shale and tight oil and gas properties, and base business were more than offset by normal field declines, the effect of asset sales, maintenance-related downtime primarily reflecting a major planned turnaround at Tengizchevroil in Kazakhstan, the effects of civil unrest in Nigeria, and production entitlement effects in several locations.

Third-quarter US upstream operations incurred a loss of $212 million compared with a loss of $603 million a year ago. Chevron says the improvement was due to lower operating and depreciation expenses, and lower tax items, partially offset by lower crude oil realizations.

US net production of 698,000 boe/d in the quarter was down 32,000 boe/d from a year earlier. Production increases from shale and tight properties in the Permian basin in Texas and New Mexico, base business in the Gulf of Mexico and San Joaquin Valley, and the Jack-St. Malo major capital project were more than offset by the effect of asset sales, normal field declines, and maintenance-related downtime. Third-quarter US liquids production increased 3% to 519,000 boe/d, while net natural gas production decreased 20% to 1.08 bcfd primarily as a result of asset sales.

International upstream operations in the third quarter earned $666 million, up from earnings of $662 million a year ago. The increase was primarily due to lower tax and operating expenses, and higher natural gas sales, partially offset by lower crude and gas realizations, the firm says.

International net production of 1.82 million boe/d in the third quarter was essentially unchanged from a year ago. Production increases from major capital projects, shale and tight properties, and base business in multiple areas were largely offset by normal field declines, a major planned turnaround at Tengizchevroil, the effects of civil unrest in Nigeria, and production entitlement effects in several locations, Chevron says. Third-quarter international liquids production internationally decreased 3% to 1.14 million boe/d in the quarter, while net gas production increased 6% to 4.04 bcfd.

Third-quarter US downstream operations earned $523 million compared with earnings of $1.25 billion a year earlier. Chevron attributes the decrease primarily to lower margins on refined product sales and lower earnings from the 50%-owned Chevron Phillips Chemical Co. LLC. US refinery crude input in the third quarter increased 3% to 970,000 b/d from the year-ago period.

International downstream operations earned $542 million in the quarter compared with $962 million a year earlier. The firm says the decrease was primarily due to the absence of third-quarter 2015 gains on derivative instruments. Lower margins on refined product sales also contributed to the decline, partially offset by lower operating expenses. Foreign currency effects decreased earnings by $4 million compared with an increase of $141 million in last year’s third quarter. International refinery crude input of 790,000 b/d in the quarter increased 2% from the year-ago period.

Capital and exploratory expenditures in the first 9 months of the year were $17.2 billion, down from $25.3 billion a year earlier. Expenditures for upstream represented 91% of the companywide total in third-quarter 2016.

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