A Review of the Nigerian Energy Industry

Chevron sees earnings slip 5%

Chevron01 November 2013, News Wires – US supermajor Chevorn has reported a 5% dip in net profit year-on-year in the third quarter to $5 billion from $5.3 billion this time last year.
The San Ramon, California-headquartered giant put the slide in earnings down to lower refining margins, with downstream earnings tumbling from $689 million in the third quarter of 2012 to $380 million this year.

Chief executive John Watson said the explorer was reaching interim milestones on its major capital projects, citing Australian liquefied natural gas project pair Gorgon and Wheatstone as well as the US Gulf’s Jack/St Malo and Big Foot, with the latter deep-water duo still on track for start-up late next year.

Overall revenues rose slightly to $57 billion between 1 June and 30 September compared to $56 billion during the same period of 2012.

Global production rose to 2.59 million barrels of oil equivalent from 2.52 million boe year-on-year in the third quarter, but upstream earnings slipped from $1.12 billion to $1.02 billion.

Chevron said that higher depreciation, exploration and operating costs had exceeded the gain from higher realised oil and gas prices.

The results match a profit warning issued by Chevron earlier this month advising that its net profit would fall despite higher output due to maintenance at various refineries.

Domestic output rose 3% thanks to production rises in the Delaware basin and Marcellus shale as well as less weather downtime, partially offset by field declines.

Internationally, production also rose 3% with project ramp-ups in Nigeria and Angola along with less downtime at Kazakhstan’s Tengizchevroil, partially offset by field declines.

On a nine-month basis, net profit slid 12% to $16.49 billion for 1 January to 30 September versus $18.93 billion in the year-ago period.

Capital and exploratory expenditure leapt year-on-year for the nine-month period to $28.9 billion from the year-ago period’s $22.7 billion.

Chevron put the increase down to capital outlay on its major Australian and US Gulf projects as well as acquisitions and new opportunities in Australia, the Permian basin, Kurdistan and Canada’s Kitimat LNG.

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