Mixed Bag: Chevron Q3 Earnings Up on Production, Refining Biz Flat
Chevron expects its third-quarter earnings to be "significantly" higher than the second quarter thanks to higher crude oil prices, increased U.S. production and $400 million of gains related to the approval of the massive Gorgon liquefied natural gas project offshore Western Australia.
It's downstream business is a different story. The San Ramon, Calif.,-based company, which issued its interim earnings report Thursday, said its downstream business was flat -- a common theme as refineries grapple with weak demand and shrinking margins.
Its international downstream results are expected to be lower, partly because sales of its marketing businesses in Kenya and Cameroon did not produce any gains and due to unfavorable tax effects, Chevron said in its interim earnings report.On the brighter side, the company's Tahiti field in the Gulf of Mexico pushed its production numbers up this quarter.
Net U.S. oil-equivalent production during the first two months of the third quarter increased 41,000 barrels per day to 741,000 bpd, in large part because of the Tahiti field.
Chevron started crude production at Tahiti -- considered the deepest producing field in the Gulf of Mexico -- in May 2009. Daily production reached name plate capacity in July of 125,000 barrels of oil and 70 million cubic feet of natural gas, ahead of Chevron's target of peak production by year end, according to Chevron.
The company's international output fell, thanks to political instability in Nigeria. International net oil-equivalent production decreased 24,000 barrels per day from 1.946 million barrels in the second quarter. The liquids component of boe production fell 13,000 barrels per day because of local civil unrest in Nigeria.
Chevron, the second-largest U.S. oil company based on market value, reported crude oil prices from its U.S. fields were up 17.4 percent to an average $62.47 a barrel from the previous period. Realized crude prices internationally rose 16 percent to an average $61.69 per barrel compared to the full second quarter.
Chevron will report its third-quarter earnings Oct. 30.