The third largest major, which posted a quadruple profit in the quarter, expects to sell about 400 fields in North America, as well as interests in Papua New Guinea and the North Sea, according to CEO Dave O’Reilly. However, he noted that worldwide, CVX has a “significant and growing resource base of about 50 billion boe.”
For the second quarter, U.S. net boe production declined by 97,000 boe/d from 2Q02, which included the absence of about 10,000 to 15,000 boe the company determined was uneconomic to restore following storm damages in the Gulf of Mexico late last year. The net liquids component of production also was down 10% to 563,000 barrels per day. Net natural gas production in the United States averaged 2.3 Bcf/d, down 8% from 2.5 Bcf/d for 2Q02. Worldwide, net natural gas production rose 8% to almost 2.1 Bcf/d, with the largest production increases in Australia, Kazakhstan and the Philippines.
CVX also reported lower U.S. natural gas sales in the quarter, averaging 3.98 Bcf/d for the period, compared with 5.99 Bcf/d in 2Q02. For the first six months of this year, natural gas sales averaged 4 Bcf/d, down from 6.34 Bcf/d for the same period of 2002.
The San Ramon, CA-based producer reported net income of $1.6 billion ($1.50 per share diluted) for the second quarter, compared with $407 million (39 cents) a year ago. The second quarter results included net special charges of $117 million (11 cents), mostly on the write off of some assets in anticipation of their sale. For the same period of 2002, writedowns totaled $826 million (77 cents).
“We have a consistent, long-term strategic focus on the upstream, a stable capital program, a commitment to improve capital efficiency and a broad and deep portfolio,” said O’Reilly. “We will continue to deliver competitive results in this business.”
O’Reilly reported that CVX also is making progress on building a global, integrated gas business. He said that the company’s already substantial gas business — with a focus on the United States and Asia as major markets — positions the company to build a global capability in liquefied natural gas and capture market opportunities worldwide. Until last year, Dynegy Inc. had been the company’s only North American gas marketer, an agreement that was terminated as Dynegy pulled out of the energy merchant business. Earlier this year, CVX created ChevronTexaco Global Gas, a subsidiary consisting of its existing gas-focused businesses (see NGI, May 26).
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