Chevron Corporation earnings in the first quarter 2019 dropped to $2.6 billion, compared with $3.6 billion in the first quarter of 2018. The decline has been attributed to lower oil prices and weak profit margins in its refining and chemicals business.
Chevron earnings dropped by 27 percent from a year earlier. It stated that foreign currency effects decreased earnings in the quarter by $137 million. Sales and other operating revenues in first quarter were $34 billion, compared to $36 billion in 2018.
Michael Wirth, chief executive officer, Chevron, said the results were bolstered by a seven percent jump in oil and natural gas production, with oil equivalent output exceeding three million barrels per day for the second quarter in a row.
Chevron attributed the increase on rising volumes from its Permian Basin fields in Texas and New Mexico, as well as its Wheatstone project in Australia. “Upstream production volumes were up seven percent from a year ago, primarily in the Permian Basin and at Wheatstone in Australia. The company’s net oil-equivalent production exceeded three million barrels per day for the second quarter in a row.
“First quarter earnings declined from a year ago, largely due to lower crude oil prices and weaker downstream and chemicals margins. We continue to high-grade our portfolio. In the first quarter we sold our interests in the Rosebank field in the United Kingdom and the Frade field in Brazil. In early April we concluded the sale of our upstream interests in Denmark,” he said.
However, the company recently announced that it entered into a definitive agreement with Anadarko Petroleum Corporation to acquire all of its outstanding shares. Wirth said, “The combination of Anadarko’s high-quality assets and people with Chevron’s portfolio strengthens our leading position in the Permian, builds greater deepwater Gulf of Mexico capabilities and will grow our LNG business. We believe this transaction will unlock significant value for shareholders.”