US supermajor Chevron reported a 35% decline for Q3 2016 when compared to 2015, and an even more drastic drop when looking at its total earnings for the first nine months of the year.
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Big Foot. Image from Chevron. |
The company’s earnings for Q3 2016 came in at US$1.3 billion, compared to $2 billion in Q3 2015. When looking at the first nine months of 2016, Chevron posted a loss of $912 million, compared to the $5 billion of total earnings for the same period in 2015, representing a 117% drop.
Foreign currency effects increased earnings in Q3 2016 by $72 million, compared with an increase of $394 million in Q3 2015. Sales and other operating revenues in Q3 2016 were $29 billion, compared to $33 billion in the 2015 period.
“Third quarter results, though down from a year ago, reflect an improvement from the first two quarters of this year,” said Chevron Chairman and CEO John Watson. “We have had steady LNG production and cargo shipments from Gorgon Train 1, and we recently started LNG production from Gorgon Train 2. In light of these milestones, we expect December production between 2.65-2.70 MMboe/d.”
The company’s global net oil-equivalent production for Q3 2016 came in at 2.51 MMb/d, compared to 2.54 MMb/d a year ago.
Chevron’s capital and exploratory expenditures in the first nine months of 2016 were reported at $17.2 billion, compared with $25.3 billion in the corresponding 2015 period.
The amounts included $2.7 billion in 2016 and $2.5 billion in 2015 for the company’s share of expenditures by affiliates, which did not require cash outlays by the company. Expenditures for upstream represented 91% of the companywide total in Q3 2016, Chevron said.
“We have made progress toward our goals of lowering the cash breakeven in our upstream business and getting cash balanced,” Watson said. “Capital spending and operating and administrative expenses have been reduced by over $10 billion from the first nine months of 2015 as a result of a series of deliberate actions we have taken.”
Last week, Woodside Petroleum confirmed Chevron’s plans to start up first liquefied natural gas (LNG) from its giant Wheatstone project in Australia, beginning in mid-2017 with Train 1, and from Train 2 in the following six to eight months.
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