Despite a recent rise in oil prices, Chevron will not boost capital spending this year, Chief Financial Officer Pierre Breber said.
“While we’re optimistic about vaccines and getting on a pathway to recovery, we’re not there right now,” Breber said. “We still have an economy that’s operating well below capacity. We still have inventory levels that are high.”
US President Joe Biden’s executive order to temporarily suspend oil and gas leasing on federal lands will not “get in our way anytime soon” in the Permian Basin, the top US oilfield, where about 10% of Chevron’s acreage is federal, Breber said.
“We don’t agree that it’s good policy to be overly restrictive on federal lands,” Breber said. “If it continues we think that will push energy production outside the country.”
The second-largest US oil producer reported an adjusted loss of US$11 million, or 1 cent per share, compared with a profit of US$2.8 billion, or US$1.49 per share, a year earlier. The net loss was US$665 million including acquisition costs, the effect of foreign exchange and pension payouts.
Improved oil and gas prices and a 6% increase in output from its purchase of Noble Energy boosted Chevron’s oil and gas earnings to US$501 million, compared with a loss of US$6.7 billion a year earlier.
The gain came as Chevron’s international production business sold oil for about US$40 per barrel, up from US$39 in the prior quarter and down from US$57 a year earlier.
The company’s refining and chemical business reported a fourth-quarter loss of US$338 million compared with profit of US$672 million the year prior. Fuel sales fell 11% from the year-ago period as COVID-19 travel restrictions continued to reduce demand.
Its closely watched cash flow from operations was US$2.3 billion, short of covering the US$2.5 billion dividend and US$3.2 billion in capital spending for the period.
Chevron has said it plans to spend US$14 billion this year on projects and about US$15 billion annually through 2025, well below the prior forecast of up to US$22 billion.
It reported a full-year loss of US$5.54 billion compared with earnings of US$2.92 billion in 2019.
ExxonMobil, ConocoPhillips, Shell and BP report financial results next week.
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/29012021/chevron-reports-4q20-loss/