Chevron’s Profit Drops in Second Quarter (USA)

Chevron's Profit Drops in Second Quarter (USA).

Chevron Corporation today reported earnings of $7.2 billion ($3.66 per share – diluted) for the second quarter 2012, compared with $7.7 billion ($3.85 per share – diluted) in the 2011 second quarter.

Sales and other operating revenues in the second quarter 2012 were $60 billion, compared to $67 billion in the year-ago period.

“Our second quarter earnings and cash flow were among our strongest ever, even with softer oil markets,” said Chairman and CEO John Watson. “Despite current weakness in the global economy, we continue to invest in our long-term growth projects to help deliver affordable energy to meet future demand. We took several important steps to advance our major upstream capital projects, in particular achieving milestones in our natural gas development projects in the Asia-Pacific region. We also expanded our global exploration resource acreage, including new leases in the Gulf of Mexico where we already hold a significant position.”

Important recent upstream milestones include:

– Australia – Signed nonbinding Heads of Agreement with Tohoku Electric for LNG offtake, and additional binding agreements with Tokyo Electric for LNG offtake and an equity interest, for the Wheatstone Project. To date, more than 80 percent of Chevron’s equity LNG from Wheatstone is covered under long-term agreements with customers in Asia.

– Australia – Announced a natural gas discovery, Pontus-1, in the Carnarvon Basin in 47.3 percent-owned Block WA-37-L.

– United Kingdom – Initiated front-end engineering and design (FEED) for the deepwater Rosebank Project west of the Shetland Islands.

– Kurdistan Region of Iraq – Acquired an 80 percent interest and operatorship in the Rovi and Sarta blocks.

– Suriname – Acquired a 50 percent interest in two offshore exploration blocks.

– Ukraine – Bid successfully for a 50 percent interest and operatorship in a shale gas block.

– United States – Bid successfully for additional shelf and deepwater exploration acreage in the Gulf of Mexico.

“In the downstream business, we continued divesting non-core assets, while also furthering work on new growth investments,” Watson added. The company completed the sale of several of its fuels-marketing and aviation businesses in the Caribbean, and the company’s 50 percent-owned GS Caltex affiliate in South Korea completed the sale of its power operations. On July 26, 2012, Caltex Australia Ltd., the company’s 50 percent-owned affiliate, announced that it plans to convert its Kurnell Refinery to an import terminal in 2014. In addition, the company’s 50 percent-owned Chevron Phillips Chemical Company LLC announced the execution of FEED contracts for an ethylene cracker at its Cedar Bayou facility in Baytown, Texas and two polyethylene facilities near its Sweeny facility in Old Ocean, Texas.

The company purchased $1.25 billion of its common stock in the second quarter 2012 under its share repurchase program.

Subsea World News Staff , July 27, 2012; Image: Chevron

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