Following the reported drops in the third quarter earnings by BP, Shell, Total and ExxonMobil, another oil company has followed suit, Chevron.
The company’s earnings and revenues fell, along with the capital expenditures. In addition the San Ramon, California-based oil major said it would lay off thousands of employees.
Chevron on Friday posted its third quarter earnings of a little over $2 billion, down from $5.6 billion earned in the same quarter of 2014.
The company’s profit in the quarter came mostly from the downstream – 2.2 billion – up from 1.4 billion a year ago, while its upstream business fell to $59 million, a giant drop from $4.6 billion in the 3Q of 2014.
“Third quarter earnings were down substantially from a year ago,” said Chairman and CEO John Watson. “While downstream earnings remained strong, lower overall earnings reflected weaker market prices for both crude oil and natural gas, which depressed upstream profitability.”
“We are focused on improving results by changing outcomes within our control. Operating and administrative expenses are 7 percent lower than last year, and we expect further reductions in the quarters ahead.”
The company, in line with its peers, said it would keep tightening the belt in the years to come. This will also lead to thousands of workers losing their jobs.
Chevron CEO said the company’s capital and exploratory expenditures for 2016 would be $25-28 billion, roughly 25 percent lower than in 2015
Watson added: “We expect further reductions in spending for 2017 and 2018, to the $20 to $24 billion range, depending on business conditions at the time. With the lower investment, we anticipate reducing our employee workforce by 6–7,000.”
Production-wise, Chevron reported its worldwide net oil-equivalent production was 2.54 million barrels per day in third quarter 2015, down from 2.57 million barrels per day in the 2014 third quarter.
Offshore Energy Today Staff