Chevron’s Profits Climb 13 Percent Thanks to Refining Boost

Chevron-Gasoline-PumpFuel Fix

by Rhiannon Meyers

Chevron shrugged off a crude price plummet in the third quarter, posting a 13 percent increase in profits as its U.S. refineries took advantage of cheaper feedstock and better reliability.

The second-largest U.S. oil company pumped less and sold its oil for a much lower price as oil prices plunged more than 20 percent in recent months, but cheaper crude also helped Chevron fetch bigger profits on its refined products.

“We want to maintain a strong balance sheet precisely for times like this,” Pat Yarrington, vice president and chief financial officer, said in a call with investors.

The company wasn’t shaken by falling prices, saying it has no plans to pull back from some of its priority projects, including two massive liquefied natural gas developments in Australia that have been plagued by rising material and labor costs. Those projects have been sucking up big chunks of Chevron’s cash, but once they go online, they’ll  begin to generate revenue for the company, Yarrington said.

“By necessity, we take a long-term view of prices, because our investments last for decades,” Yarrington said in the call. “We continue to believe global demand for oil and natural gas will grow, while existing sources of supply will inevitably decline.”

While other companies have said they would consider pulling back from the Permian Basin, Yarrington highlighted development in that region as one of Chevron’s bright spots.

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