Chevron Makes $2.7bn 1Q Profit

US major Chevron reported 1Q earnings of $2.7bn, compared with a loss of $725mn in 1Q2016, and said it was looking forward to a reliable period of operations at the Gorgon LNG complex that it operates in Australia.

Higher oil and gas prices boosting 1Q earnings was a common element in ExxonMobil and Chevron 1Q results, both announced April 28, with Chevron CEO John Watson noting: “We benefited from increasing crude oil prices and ongoing efficiencies being implemented across the company.” 

Chevron's upstream 1Q2017 earnings of $1.51bn included a gain of some $600mn from the sale of its Indonesia geothermal business; they contrasted with a year-ago upstream loss of $1.46bn. Net global production was 2.68mn barrels of oil equivalent per day (boe/d) in 1Q2017, level year on year.

Chevron’s average realised 1Q2017 prices were $45/b for liquids (year-ago $26/b) and $2.39/’000 ft³ for natural gas ($1.32) in the US, and internationally $49/b ($29/b) and $4.36/’000 ft³ ($3.91).

Chevron-operated Gorgon LNG complex. All three 5.2mn mt/yr trains are now operational (Photo credit: Chevron) 

First LNG was produced in mid-March 2017 at train 3 of the Chevron-operated Gorgon complex in Australia. 

Chevron Asia Pacific E&P president Steve Green told analysts: "Cargo 68 from Gorgon is loading now." in response to a question, he said: "We have operated all three trains at or near capacity. Nothing prohibits us from operating at full [15.6mn mt/yr] nameplate capacity, except proper operational procedures and the need to blend gas from the Jansz and Gorgon fields. All three have operated reliably. The train 2 was a planned shutdown .. to correct a mechanical device with a flow meter .. previously corrected on T1.... and T2 was operating this morning. We're looking forward to a reliable period of operation."

Green said the target for Wheatstone train 1 (also in Australia) was still expected mid-2017, with T2 there starting up six to eight months after that.

In its analysts call, Chevron also said that its 5.2mn mt/yr Angola LNG plant had also "run reliably since it restarted at the start of this year, and we expect that performance to continue."

Production breakdown

Chevron's net 1Q US production was 3% higher year on year at 504,000 b/d, whereas natural gas decreased 21% to 1.01bn ft³/d.

For net 1Q international output, it was the other way round: liquids were 7% at 1.2mn b/d, with civil unrest in Nigeria a factor cited, whereas gas increased by 19% to 4.8bn ft³/d, in part from first LNG in mid-March 2017 at train 3 of Gorgon – cited also as a plus-factor too in Exxon’s results.

Chevron acknowledged that earlier this week it agreed the sale of its Bangladesh operations, which produced some 114,000 boe/d.

Mark Smedley