MOSCOW (MRC) -- US supermajor Chevron expects its first quarter earnings to fall from fourth-quarter levels due to impairments and foreign exchange losses, according to its interim quarterly update, said Upstreamonline.
The first two months of 2014 showed hits from "adverse foreign exchange effects" and selected asset impairments, Chevron said. "Absent these impacts, first quarter 2014 earnings are expected to be comparable with the prior quarter’s results," the California-based company said.
Chevron reported net income in the three months to December last year of USD4.93 billion, or USD2.57 per share. That represented more than a 30% drop from a year earlier.
Upstream downtime caused, in part, by weather in early 2014 has affected production so far this year "across multiple regions" including Kazakhstan, Canada, and the US.
But higher demand in Thailand and increased production at the company's LNG facility in Angola have offset some of that decline.
Chevron produced 637,000 barrels of oil equivalent per day in the US in 2014 through February, down from 650,000 in the fourth quarter. Internationally, production came to 1.94 million boepd, up slightly from the 1.93 million boepd produced in the previous quarter.
The company took an impairment of between USD400 million and USD500 million in the first two months of the year, a loss it chalked up to "primarily mining" and "various upstream assets". The foreign exchange hit resulted in an approximate USD100 million loss. Downstream earnings were also expected to be lower in the first quarter.
As MRC wrote before, Chevron Phillips Chemical Company LP (Chevron Phillips Chemical) held a groundbreaking ceremony for its U.S. Gulf Coast (USGC) Petrochemicals Project at the Cedar Bayou plant in Baytown, Texas. The USGC project includes a 1.5 mln metric tpa (3.3 bln lbs/year) ethane cracker to be built at the Cedar Bayou facility in Baytown, and two 500,000 mln metric tpa (1.1 bln lbs/year) capacity polyethylene facilities to be built in Old Ocean, Texas.
Chevron Phillips Chemical Company LP is an indirect wholly-owned subsidiary of Chevron Phillips Chemical Company LLC, one of the world’s top producers of olefins and polyolefins and a leading supplier of aromatics, alpha olefins, styrenics, specialty chemicals, plastic piping and polymer resins. Chevron Phillips Chemical Company LLC is equally owned by Chevron U.S.A. Inc., an indirect wholly-owned subsidiary of Chevron Corporation, and by wholly-owned subsidiaries of Phillips 66, and is headquartered in The Woodlands, Texas.
MRC