Chevron Corporation said it recorded earnings of $5.3 billion ($2.69 per share – diluted) for the third quarter 2012, compared with $7.8 billion ($3.92 per share – diluted) in the 2011 third quarter, indicating a drop of $2.5 billion when compared to the same period last year.
Commenting on the financial result, the Chairman and Chief Executive Officer of the company, John Watson, said: “This quarter’s earnings were solid, but off from their near record level of a year ago.
“Crude oil prices were down and we had a heavy period of planned oil field maintenance, which temporarily reduced oil and gas production in several locations. Foreign currency movements also hurt our results this quarter, while they benefited the year-ago period.
“We continue to progress our upstream projects. Gorgon in Australia and Bigfoot and Jack/St. Malo in the deepwater Gulf of Mexico are all over 50 per cent complete. The Wheatstone Project in Australia is also off to a good start. Each of these projects is expected to deliver significant future value for our shareholders.”
The company said that its net oil-equivalent production across the world was 2.52 million barrels per day, which Nigeria contributed to.
“Worldwide net oil-equivalent production was 2.52 million barrels per day in the third quarter 2012, down from 2.60 million barrels per day in the 2011 third quarter. Production increases from project ramp-ups in Thailand, Nigeria and the United States were more than offset by the effects of planned maintenance-related downtime, normal field declines, continued shut-in of the Frade Field in Brazil, dispositions and storm-related shut-ins in the Gulf of Mexico. The company expects increased production in the fourth quarter 2012 compared to the current quarter, reflecting the completion of planned turnarounds and restoration of shut-in production in the Gulf of Mexico,” the company added.
International upstream earnings of $4.02 billion decreased $676 million from the third quarter 2011. The decline between quarters was primarily due to lower volumes and realisations for crude oil, as well as higher exploration expense. Mostly offsetting these effects was a nearly $600 million gain on sale of an equity interest in the Wheatstone Project, and lower tax items. Foreign currency effects decreased earnings by $252 million, compared with an increase of $304 million a year earlier.
In the downstream, Watson said: “In the downstream, we continue to reposition the business toward high growth chemical and specialty products and to sell non-core assets. The company’s 50 per cent-owned Chevron Phillips Chemical Company LLC (CPChem) announced that its 35 per cent-owned Saudi Polymers Company began commercial production at its petrochemical project in Al Jubail, Saudi Arabia. Also in the third quarter, the company completed the sale of its idled Perth Amboy, New Jersey, refinery, which had been operating as a terminal, and two of its fuels marketing businesses in the Caribbean.”
International downstream operations earned $233 million in the third quarter 2012, compared with $1.3 billion a year earlier. Current quarter earnings decreased due to lower gains on asset sales, including the absence of a 2011 gain of approximately $500 million from the sale of the Pembroke Refinery and related marketing assets in the United Kingdom and Ireland. An unfavourable change in effects on derivative instruments also contributed to the lower earnings in the 2012 quarter. Foreign currency effects decreased earnings by $43 million in the 2012 quarter, compared with an increase of $148 million a year earlier, the company said.
