Chevron Corp. recorded third-quarter earnings of $2 billion, up from $1.3 billion in third-quarter 2016, even as its net US upstream production posted a year-over-year decline.
The major said the quarter included a gain on an asset sale of $675 million and an asset write-off of $220 million. Foreign currency effects decreased earnings in the quarter by $112 million compared with an increase of $72 million a year earlier.
Its cash flow from operations during the year’s first 9 months was $14.3 billion, up from $9 billion for the first 9 months of 2016.
Third-quarter earnings from Chevron’s international downstream operations were $1.17 billion, up from $542 million a year earlier largely due to higher gains on asset sales, primarily from the sale of the company’s Canadian refining and marketing assets. Higher operating expenses and lower margins on refined product sales partially offset the gain.
Refinery crude oil input of 801,000 b/d in third quarter increased 11,000 b/d year-over-year due to crude unit optimization and lower maintenance at company affiliate Singapore Refining Co.
For its US downstream operations, earnings of $640 million in the third quarter were up from earnings of $523 million a year earlier primarily due to higher margins on refined product sales. Refinery crude oil input fell 4% from the year-ago period to 931,000 b/d.
Third-quarter earnings from Chevron’s international upstream operations were $515 million, down from $666 million a year ago due to higher depreciation expense including the effect of catch-up depreciation for its Bangladesh operations that it no longer intends to sell as well as an asset write-off.
Also contributing to the upstream decline were higher tax expenses and the absence of an Ecuador arbitration award. More than offsetting these items were higher crude oil and natural gas realizations, higher gas and crude sales volumes, and higher equity income from the absence of a Tengizchevroil royalty expense in Kazakhstan. Foreign currency effects had an unfavorable impact on earnings of $249 million.
International production for the quarter was 2.04 million boe/d, up 221,000 boe/d from third-quarter 2016. Production increases from major capital projects, primarily Gorgon LNG in Australia and Angola LNG and lower planned turnaround effects at Tengizchevroil, were partially offset by production entitlement effects in several locations and normal field declines.
Net liquids production increased 5% in the quarter to 1.19 million boe/d, while net gas production increased 25% to 5.05 bcfd.
In its US upstream segment, the firm took a loss of $26 million compared with a loss of $212 million in third-quarter 2016. The improvement reflected higher crude realizations.
Net production from its US operations of 681,000 boe/d in the quarter was down 17,000 boe/d from a year earlier. Production increases from shale and tight properties in the Permian basin in Texas and New Mexico and base business in the Gulf of Mexico were more than offset by the impact of asset sales of 67,000 boe/d and normal field declines.
Net US liquids production increased 1% to 525,000 boe/d, while net gas production decreased 13% to 932 MMcfd primarily as a result of asset sales.
