Chevron Corp. reported earnings of $3.1 billion for fourth-quarter 2017 compared with $415 million in fourth-quarter 2016. Included in the quarter were noncash provisional tax benefits of $2.02 billion related to US tax reform and a noncash charge of $190 million related to a former mining asset. Foreign currency effects decreased earnings in the fourth quarter by $96 million. Sales and other operating revenues in fourth-quarter 2017 were $36 billion compared with $30 billion in the year-ago period.
Full-year 2017 earnings were $9.2 billion compared with a loss of $497 million in 2016. Included in 2017 were noncash provisional tax benefits of $2.02 billion related to US tax reform, gains on asset sales of $1.44 billion, and impairments and other noncash charges of $840 million. Foreign currency effects decreased earnings in 2017 by $446 million.
The company achieved its goal of being cash flow positive through a reduction in capital expenditures, a lower cost structure, the start and ramp-up of projects, and planned asset sales, said Chairman and Chief Executive Officer Michael Wirth. "Higher commodity prices helped as well," he said.
In 2017, the company replaced 150% of the reserves it produced, with the largest additions coming from the Permian basin in the US and the Gorgon project in Australia.
"Our net oil-equivalent production grew by 5% in 2017, including the effects of asset sales," Wirth said. "Importantly, we expect that our 2018 production will continue to grow by 4-7%, driven primarily by Australian LNG and the acceleration of development activities in the Permian, where investment economics continue to improve."
Wirth added, "In the downstream, we made significant progress on our growth investments." Chevron Phillips Chemical Co. LLC achieved start-up of two polyethylene units and reached mechanical completion of an ethane cracker at its US Gulf Coast Petrochemicals Project in Texas.
Worldwide net oil-equivalent production was 2.74 million b/d in fourth-quarter 2017 compared with 2.67 million b/d from a year ago. Net oil-equivalent production for the full year 2017 was 2.73 million b/d compared with 2.59 million b/d from the prior year.
US upstream operations earned $3.69 billion in fourth-quarter 2017 compared with earnings of $121 million from a year earlier. The improvement reflected a benefit of $3.33 billion from US tax reform along with higher crude oil realizations, partially offset by the absence of gains on fourth-quarter 2016 asset sales.
International upstream operations earned $1.6 billion in fourth-quarter 2017 compared with $809 million a year ago. The increase in earnings was mainly due to higher crude oil realizations and higher natural gas sales volumes, partially offset by higher depreciation expense associated with higher production. Foreign currency effects had an unfavorable impact on earnings of $20 million between periods.
US downstream operations earned $1.2 billion in fourth-quarter 2017 compared with breakeven a year earlier. The increase was primarily due to a $1.16 billion benefit from US tax reform. Also contributing to the increase were higher margins on refined product sales primarily reflecting the absence of fourth quarter 2016 planned turnaround activity at the Richmond refinery, and lower operating expenses. Partly offsetting these effects were impacts from Hurricane Harvey at Chevron Phillips Chemical Co.'s Cedar Bayou, Tex., petrochemical plant.
International downstream operations earned $84 million in fourth-quarter 2017, compared with $357 million a year earlier. The decrease in earnings was largely due to lower margins on refined product sales. Foreign currency effects had an unfavorable impact on earnings of $115 million between periods.
