Chevron Corp. reported third-quarter 2021 earnings of $6.1 billion, its highest since 2013, with record free cash flow of $6.7 billion. The company reported a third-quarter 2020 loss of $207 million.
Earnings growth was led by Chevron’s upstream segment, which netted $5.1 billion in third-quarter 2021 versus $235 million a year earlier. Of this, international upstream earnings totaled $3.2 billion as compared with $119 million in third-quarter 2020.
Chevron’s average sales price for crude oil and NGLs in third-quarter 2021 was $68/bbll, up from $39 a year earlier. The average sales price of natural gas was $6.28/Mcf, up from $3.89 in 2020’s third quarter.
Net oil-equivalent production of 1.91-million b/d in third-quarter 2021 was up 55,000 b/d from third-quarter 2020. Production of an additional 158,000 b/d following the Noble Energy acquisition (OGJ Online, July 20, 2020) and lower production curtailments, were partially offset by unfavorable entitlement effects, normal field declines, and operational impacts mainly due to planned maintenance on the sour-gas injection unit and second-generation plant at Tengizchevroil. The net liquids component of oil-equivalent production decreased 6% to 915,000 b/d in third-quarter 2021, while net natural gas production of 5.95 bcfd was 13% more than 2020’s third quarter.
Chevron’s capital and exploratory expenditures in the first 9 months of 2021 totaled $8.1 billion, compared with $10.3 billion in 2020. The amounts included $2.3 billion in 2021 and $3.1 billion in 2020 for the company’s share of expenditures by affiliates, which did not require cash outlays by the company. Expenditures for upstream represented 84% of the company-wide total in 2021. In addition, Chevron completed sale of several conventional Permian basin properties during the quarter.
The company also announced an agreement with Neste Oyj to acquire its base oil business and brand, NEXBASE, and completed acquisition of an equity interest in American Natural Gas LLC and its network of 60 compressed natural gas (CNG) stations to grow its renewable natural gas (RNG) value chain.
The Oct. 4, 2021, Neste agreement covers a combination of share and asset deals forming Neste’s entire global base oils business. As part of it, the parties also agreed on long-term offtake for Neste’s base oils supply from Porvoo, Finland. With the same date, Neste signed an agreement to exit its base oils joint venture with Bahrain Petroleum Co. and Nogaholding. The transaction is expected to close by end first-quarter 2022.
Chevron in September 2021 formed a joint venture with Mercuria Energy Trading to own and operate American Natural Gas’s CNG stations, part of its efforts to build a large-scale, vertically integrated RNG business in the US. Through partnerships with Brightmark and California Bioenergy, Chevron is developing projects to produce RNG from dairy digesters across the country and plans to open more than 30 Chevron-branded CNG stations by 2025.
