Chevron Corp. had earnings of $5.1 billion for fourth-quarter 2021, compared with a loss of $665 million in fourth-quarter 2020. Earnings were below third-quarter 2021’s $6.1 billion (OGJ Online, Oct. 29, 2021).
Included in the current quarter were asset sale gains of $520 million, losses on the early retirement of debt of $260 million, and pension settlement costs of $82 million. Foreign currency effects decreased earnings by $40 million.
Adjusted earnings of $4.9 billion in the quarter compares to adjusted earnings of $298 million in fourth-quarter 2020.
Chevron reported full-year 2021 earnings of $15.6 billion, compared with a loss of $5.5 billion in 2020. Included in 2021 were net charges for special items of $289 million, compared to net charges of $5.1 billion for special items in 2020. Foreign currency effects increased earnings in 2021 by $306 million.
Adjusted earnings of $15.6 billion in 2021 compares to adjusted earnings of $172 million in 2020.
Sales and other operating revenues in fourth quarter 2021 were $46 billion, compared to $25 billion in the year-ago period.
Chevron’s net oil-equivalent production grew in 2021 to a record 3.10 million b/d. The company also added 1.3 billion barrels of net oil-equivalent proved reserves in 2021. These additions, which are subject to final reviews, equate to about 112% of net oil equivalent production for the year. The largest net additions were from assets in the Permian basin, the Gulf of Mexico, and Australia. The largest net reductions were from assets in Kazakhstan primarily due to higher prices and their negative effect on reserves.
Upstream
Worldwide net oil-equivalent production was 3.12 million b/d in fourth-quarter 2021, a 5% decrease from a year ago. Worldwide net oil-equivalent production for full-year 2021 was 3.10 million b/d, a slight increase from a year ago.
US upstream
US upstream operations earned $2.97 billion in fourth-quarter 2021, compared with $101 million a year earlier. The improvement was primarily due to higher realizations, gains on asset sales, higher sales volumes, and lower exploration expense, partially offset by higher employee benefit costs.
Net oil-equivalent production of 1.22 million b/d in the quarter was up 21,000 b/d from a year earlier. The increase was due to net production increases in the Permian basin and the absence of Gulf of Mexico weather effects, partially offset by a 48,000 b/d decrease related to the Appalachian asset sale.
The net liquids component of oil-equivalent production in fourth-quarter 2021 increased 6% to 929,000 b/d, and net natural gas production decreased 9% to 1.73 bcfd, compared to last year’s fourth quarter.
International upstream
International upstream operations earned $2.19 billion in fourth-quarter 2021, compared with $400 million a year ago.
Net oil-equivalent production of 1.90 million b/d in fourth-quarter 2021 was down 181,000 b/d from fourth-quarter 2020. The decrease was primarily due to the absence of 186,000 b/d following expiration of the Rokan concession in Indonesia and unfavorable entitlement effects, partially offset by lower production curtailments. The net liquids component of oil-equivalent production decreased 18% to 899,000 b/d in fourth-quarter 2021, while net natural gas production of 6.01 bcfd increased 2%, compared to last year's fourth quarter.
Downstream
US downstream operations reported earnings of $660 million in fourth-quarter 2021, compared with a loss of $174 million a year earlier. The increase was mainly due to higher margins on refined product sales, higher earnings from the 50%-owned Chevron Phillips Chemical Co., and higher sales volumes, partially offset by higher transportation and employee benefit costs.
Refinery crude oil input in fourth-quarter 2021 increased 9% to 882,000 b/d from the year-ago period, as the company increased refinery runs in response to higher demand and the improved refining margin environment.
Refined product sales of 1.16 million b/d were up 14% from the year-ago period, mainly due to higher gasoline and jet fuel demand as travel restrictions associated with the pandemic continue to ease.
International downstream
International downstream operations reported earnings of $100 million in fourth-quarter 2021, compared with a loss of $164 million a year earlier. The increase was mainly due to higher margins on refined product sales and a $142 million favorable swing in foreign currency impacts between periods, partially offset by higher transportation and employee benefit costs.
Refinery crude oil input of 602,000 b/d in fourth-quarter 2021 increased 11% from the year-ago period due to higher demand and improved refining margin environment.
Refined product sales of 1.33 million b/d in fourth-quarter 2021 increased 8% from the year-ago period, mainly due to higher demand for gasoline and jet fuel as restrictions from the pandemic continue to ease along with higher sales in Australia.
Cash flow from operations, capex
Cash flow from operations in 2021 was $29.2 billion, compared with $10.6 billion in 2020. Excluding working capital effects, cash flow from operations in 2021 was $30.6 billion, compared with $12.2 billion in 2020.
Capital and exploratory expenditures in 2021 were $11.7 billion, compared with $13.5 billion in 2020. The amounts included $3.2 billion in 2021 and $4 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 82% of the company-wide total in 2021.
