BAKU, Azerbaijan, May 1
By Leman Zeynalova – Trend:
Earnings of the US-based Chevron Corporation stood at $3.6 billion for first quarter 2020, compared with earnings of $2.6 billion in the same period of 2019, with sales and other operating revenues decreasing by $4 billion, Trend reports citing the company.
“Included in the current quarter was a gain of $240 million associated with the sale of upstream assets in the Philippines and favorable tax items totaling $440 million attributable to international upstream. Foreign currency effects increased earnings in the first quarter 2020 by $514 million,” Chevron said in its report on the first three months of 2020.
Reportedly, sales and other operating revenues in first quarter 2020 were $30 billion, compared to $34 billion in the year-ago period.
“First quarter earnings were up from a year ago,” said Michael K. Wirth, Chevron’s chairman of the board and chief executive officer, “driven by downstream margins and increased Permian production. However, commodity prices fell significantly in March and the weakness continued into the second quarter, primarily due to reduced demand resulting from the COVID-19 pandemic.” Financial results in future periods are expected to be depressed as long as current market conditions persist.
“Chevron is responding to these unprecedented challenges by making changes to what we control, and with a commitment to protect the long-term health and value of the company,” Wirth added. “Our company entered this crisis well positioned with a strong balance sheet, flexible capital program and low breakeven price. These advantages will be important as we respond to challenging market conditions.”
Chevron is further reducing its 2020 capital expenditure guidance by up to $2 billion to $14 billion. In addition, the company estimates that 2020 operating costs will decrease by $1 billion. This follows the previously announced suspension of share repurchases and the completion of additional asset sales.
Chevron's portfolio high-grading continued with the close of asset sales in the Philippines in March and Azerbaijan in April, which together generated over $1.6 billion in proceeds this year.
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