American multinational energy corporation Chevron on Friday reported a loss of $725 million for the first quarter 2016, compared with earnings of $2.6 billion in the same period last year, after suffering an impact of low oil price.
According to Chevron’s 1Q report on Friday, foreign currency effects decreased earnings in the 2016 quarter by $319 million, compared with an increase of $580 million a year earlier.
Sales and other operating revenues in the first quarter 2016 were $23 billion, compared to $32 billion in the year-ago period.
“First quarter results declined from a year ago,” said Chairman and CEO John Watson. “Our upstream business was impacted by a more than 35 percent decline in crude oil prices. Our downstream operations continued to perform well, although overall industry conditions and margins this quarter were weaker than a year ago.
“Our efforts are focused on improving free cash flow,” Watson stated. “We are controlling our spend and getting key projects under construction online, which will boost revenues.”
Watson added: “We continue to lower our cost structure with better pricing, work flow efficiencies and matching our organizational size to expected future activity levels.
“Our capital spending is coming down. We are moving our focus to high-return, shorter-cycle projects and pacing longer-cycle investments.”
Chevron’s worldwide net oil-equivalent production was 2.67 million barrels per day in the first quarter 2016, compared with 2.68 million barrels per day in the same period last year. Production increases from project ramp-ups in the United States, Nigeria and other areas, and production entitlement effects in several locations, were offset by the Partitioned Zone shut-in and normal field declines, said the company.
U.S. upstream operations incurred a loss of $850 million in first quarter 2016 compared to a loss of $460 million from a year earlier. The company said that the decrease was due to lower crude oil and natural gas realizations, partially offset by lower operating expenses.
Chevron’s capital and exploratory expenditures in first quarter 2016 were $6.5 billion, compared with $8.6 billion in the corresponding 2015 period.