Chevron, one of the nation’s largest oil companies, reported a fourth consecutive quarter of profit on Friday as oil and natural gas prices continued to recover from the pandemic plunge.
This is the company’s best financial performance since 2014, reflecting significant industry change.
Chevron, along with other major oil companies, has shifted its focus from expanding exploration as prices rise to a more cautious and disciplined approach to avoiding new gluts and new price declines. So far, that strategy has worked even in the face of growing criticism that the oil industry is not addressing investor concerns about climate change quickly enough.
Chevron, based in San Ramon, California, said earned $5.1 billion in the last three months of the year for the year with sales of $46 billion. Profit versus loss of $665 million for the 2020 period on $25 billion in revenue. The improved results were supported by oil prices hitting a seven-year high in late 2021 and continuing to climb to more than $80 a barrel.
For the full year of 2021, Chevron made $15.6 billion versus a loss of $5.5 billion in 2020, one of the industry’s best years in modern history as businesses and cities close. doors and consumers at home.
Chevron executives say the decline, and the company’s need to cut costs, have ultimately resulted in a stronger business. The company may increase its dividend in 2021 and again this week.
“We are an even better company than we were a few years ago,” said Mike Wirth, chief executive officer of Chevron. “We are more capital-efficient and cost-effective, allowing us to return more cash to our shareholders.”
Chevron reported higher sales volumes and lower costs in its exploration and production operations. Most importantly, the average selling price for a barrel of oil in the fourth quarter was $63 compared with $33 the year before. The selling price of natural gas is more than three times higher than the previous year, mainly due to the weather factor.
Chevron’s refinery profits also improved. Quarterly profit from its U.S. refining operation hit $660 million in the quarter from a loss of $174 million a year earlier. As the global economy recovered, Chevron’s refining output in the US grew 9% in the quarter year-over-year.
Chevron has said it will increase spending by 20% this year to raise output, but its budget is still far below pre-pandemic levels.
Industry executives remain wary that oil prices could slide again if economic growth slows.
https://www.nytimes.com/2022/01/28/business/energy-environment/chevron-earnings-4q-2021.html Chevron’s Post Best Quarter Since 2014, as Oil Industry Recovers