Chevron Corp., the second largest U.S. energy company, on Friday reported its largest profit jump in at least 10 years, exceeding Wall Street estimates.
However, as had been the case in previous conference calls between U.S. Gulf of Mexico (GOM) producers and financial analysts, Chevron management was hit with a series of questions related to the massive oil spill related to BP plc’s leaking deepwater well (see related story).
Chevron CFO Pat Yarrington helmed a conference call about the earnings report, and she was hit with several questions about the company’s reaction to the GOM tragedy.
“We have offered assistance to BP, to MMS [Minerals Management Service] and they have taken us up on that offer,” Yarrington told analysts. “Everybody in the industry stands ready to get those issues handled.”
Chevron has offered “equipment, people, processes…anything that they feel we can offer, we’re happy to do that,” she said. “We’ve had discussions between ourselves and government agencies, BP, etc. There is a consortium of efforts under way here.”
Asked if a potential ban on drilling in U.S. waters offshore may impact Chevron, Yarrington said she didn’t know.
“This is breaking news, and let me just say that first of all, our operations in the Gulf were not impacted by this incident,” she said. “We do see press releases in the media that say existing lease sales currently planned will go ahead. We have no information to the contrary, so I can’t say no or yes on that.
“We are certain that a full investigation and root cause analysis will be done and will be widely shared, and beyond that, I’m not in a position to go much further than that.”
Asked if Chevron perceives any risks related to the spill, Yarrington said it was “too premature” to discuss. “There is a tremendous interest…in stopping the flow of oil and to make sure we’ve got containment, clean up, and then to understand what has happened.
“We wouldn’t want to prejudge or leap too quickly to conclusions about what may have happened or how that could impact Chevron’s offshore installations,” Yarrington said. “We don’t know how it will play out. I really can’t say.”
The San Ramon, CA-based producer report net profits more than doubled to $4.55 billion ($2.27/share) in 1Q2010, from $1.84 billion (92 cents) in the year ago period. Revenue jumped by 33% to $48.2 billion.
Natural gas and oil output rose 4.5% in the first three months of this year on new production from the GOM to Australia. Production in the latest period topped 2.78 million boe/d, a company record, with new output ramping up across the globe, including in GOM’s deepwater.
Chevron’s exploration and production segment reported that its earnings more than tripled from a year earlier to $4.72 billion as prices for crude surged 97% and natural gas prices jumped 28% from 1Q2009.
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