Chevron Corp. Friday posted a 11% rise in quarterly net income thanks to high commodity prices, but like its peers, the California-based major failed to gain any ground on the production side.
Net income reached $5.98 billion ($2.90/share), compared with $5.38 billion ($2.52) in 2Q2007. Wall Street had expected Chevron to post earnings of around $3.03/share. Revenue soared 48% from a year ago to $82.99 billion.
Total oil and natural gas production fell 3.4% from a year earlier to 2.54 million boe/d, compared with an average of 2.63 million boe/d. ExxonMobil Corp., Royal Dutch Shell plc and ConocoPhillips also posted declines in quarterly production (see Daily GPI, Aug. 1; July 24).
“These companies are growth-challenged,” Brian Youngberg, senior energy analyst at Edward Jones, wrote of the oil majors’ problems in moving the production needle. Energy investors, he said, are moving money into “growth companies, and these oil majors have been left by the side of the road…They’re so large that they struggle to move the needle.”
Chevron’s North American natural gas production was down as well, although the company posted a slight gain in its Canadian operations. Sales of U.S. gas reached 7,631 MMcf/d in the period, down from 8,153 MMcf/d a year earlier. Canadian gas sales grew to 692 MMcf/d from 602 MMcf/d.
Chevron is spending an estimated $335 million a week to boost its oil and natural gas output worldwide. Production for the major has slipped for seven straight quarters and now stands at about the same level it did before Chevron acquired Unocal Corp. in 2005 (see Daily GPI, April 5, 2005).
To meet a full-year 2008 production target of 2.65 million boe/d, set earlier this year, Chevron has to boost its total output by 190,000 boe/d, or around 7.5%, through the last half of the year. On Thursday Chevron announced the ramp-up of its largest new project the Agbami development off the coast of Nigeria.
Also scheduled to ramp up this year are the $4.7 billion Tahiti and $1.4 billion Blind Faith deepwater platforms in the Gulf of Mexico.
Blind Faith, which is expected to have production capacity of 45,000 MMcf/d of natural gas and 45,000 b/d of crude oil, had been scheduled to ramp up by the end of June, but a problem with the mooring lines delayed commissioning (see Daily GPI, May 5). The Tahiti project, which also had been scheduled for ramp-up in the first half of this year, was delayed in 2007 because of metallurgical problems in the mooring shackles (see Daily GPI, June 29, 2007). Tahiti’s peak production is estimated to be 125,000 b/d of oil and 70 MMcf/d of gas.
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