Chevron Corp. reported fourth-quarter 2016 earnings of $415 million compared with a loss of $588 million in fourth-quarter 2015. Full-year 2016 results were a loss of $497 million compared with earnings of $4.6 billion in 2015.
“Our 2016 earnings reflect the low oil and gas prices we saw during the year,” said John Watson, Chevron chairman and chief executive officer. “We responded aggressively to those conditions, cutting capital and operating expenses by $14 billion. We are well positioned to improve earnings and be cash flow balanced in 2017 through continued tight spending and cost control and additional revenue from expected production growth.”
The company added 900 million boe of proved reserves in 2016. The additions, which are subject to final reviews, equate to 95% of net oil-equivalent production for the year. The largest additions were from the Future Growth project at Tengizchevroil in Kazakhstan, the Permian basin in the US, and the Wheatstone project in Australia.
Worldwide net oil-equivalent production in the fourth quarter was 2.67 million b/d, essentially unchanged from a year earlier. Production increases from major capital projects and base business were offset by normal field declines, the impact of asset sales, production entitlement effects in several locations, and the effects of civil unrest in Nigeria.
Net oil-equivalent production for the full year was 2.59 million b/d, a decrease of 1% from the prior year. Production increases from major capital projects, shale and tight properties, and base business were more than offset by normal field declines, the impact of asset sales, the partitioned zone shut-in, the effects of civil unrest in Nigeria, and planned turnaround activity.
US upstream operations in the fourth quarter earned $121 million compared with a loss of $1.95 billion a year earlier. The increase was primarily due to lower depreciation, exploration and operating expenses, and higher crude oil and natural gas realizations.
International upstream operations in the quarter earned $809 million, up from $593 million a year earlier. The increase was due to higher crude oil realizations, higher natural gas sales volumes, primarily from the Gorgon project, and lower operating expenses. Partially offsetting these effects were higher tax items, lower crude oil sales volumes, higher depreciation expenses, and lower gains on asset sales.
US downstream operations in the quarter were breakeven compared with earnings of $496 million a year earlier. The decrease in earnings was due to lower margins on refined product sales and higher tax items. Refinery crude oil input in the quarter decreased 21% to 721,000 b/d from the year-ago period mainly due to planned turnaround activity at the company’s refinery in Richmond, Calif.
International downstream operations in the fourth quarter earned $357 million, down from $515 million a year earlier. The decrease was primarily due to lower margins on refined product sales, partially offset by lower operating expenses. Refinery crude oil input of 801,000 b/d in the quarter was up 18,000 b/d from the year-ago period.