The Increases in oil and gas production from project ramp-ups in the United States, Nigeria, Brazil and Argentina have boosted earnings of Chevron Corporation from $5.4 billion in the second quarter of 2013 to $5.7 billion in second quarter of 2014.
Reflected in the results released at the weekend, the company’s sales and other operating revenues in the second quarter of 2014 also increased to $56 billion, in comparison to $55 billion a year ago.
The Chairman and Chief Executive Officer of Chevron Corporation, Mr. John Watson, stated that the company’s second quarter earnings and cash flow were solid.
Watson said the current quarter earnings showed stronger market conditions for crude oil, adding however that some of these benefits were offset by lower production volumes as a result of planned maintenance activity at Tengizchevroil in Kazakhstan.
According to him, gains on asset sales also contributed to the results, as the company completed significant sales under the company’s three-year divestment programme.
“We continue to make significant progress on our major capital projects which are expected to underpin a 20 percent increase in production by 2017 and enable significant growth in our cash flows. In the deepwater Gulf of Mexico, our production is expected to benefit in the near-term from start-up of the Jack/St. Malo Project later this year and the Big Foot Project in 2015.
“In Australia, our Gorgon and Wheatstone LNG projects continue to reach important interim milestones. Gorgon remains on track for expected start-up in mid-2015. We are also advancing the development of our liquids-rich, unconventional properties in the United States, Canada and Argentina,” he said.
Production increases from project ramp-ups in the United States, Nigeria, Brazil and Argentina were more than offset by price and other production entitlement effects in several locations, normal field declines, and maintenance-related downtime at Tengizchevroil in Kazakhstan.
One of the significant highlights identified in the report by the company was the achievement of initial production of product at the company’s Escravos Gas-to-Liquids facility in Delta State.
“We also completed work on several important downstream growth investments,” said Watson.
International upstream earnings of $4.21 billion increased $344 million from second quarter 2013. The increase between quarters was primarily due to a gain on the sale of interests in Chad and Cameroon and higher realizations and sales volumes for crude oil, partially offset by higher exploration and depreciation expenses.
Foreign currency effects decreased earnings by $147 million in the 2014 quarter, in comparison with an increase of $275 million a year earlier. The average sales price for crude oil and natural gas liquids in the second quarter 2014 was $101.15 per barrel, up from $93.71 a year earlier.
The average price of natural gas was $5.98 per thousand cubic feet, in comparison to $5.93 in last year’s second quarter.
