Chevron posts lower Q4 results on weaker-than-expected performance of its upstream and downstream segments

MOSCOW (MRC) -- Chevron Corporation, the world's petrochemical major, reported adjusted fourth-quarter earnings per share of USD2.56, missing the Zacks Consensus Estimate of USD3.11 on weaker-than-expected performance from its both segments, as per the company's press release.

Precisely, income from the Upstream and the Downstream units totaled USD5.2 billion and USD760 million, respectively, below their Zacks Consensus Estimate of USD5.3 billion and USD1 billion.

Keeping the bottom-line disappointment aside, Chevron recorded USD9.5 billion in cash flow from operations compared to just USD2.3 billion a year ago. The soaring cash flow could be attributed to strong price realizations in the upstream business. Importantly, Chevron’s free cash flow for the quarter was a record USD6.9 billion. Chevron's cash flow for the full-year 2021 was USD29.2 billion, up 175.5% from 2020. Further, Chevron paid USD10.2 billion in dividends and bought back USD1.4 billion worth of its shares.

As MRC reported earlier, Chevron Phillips Chemical (CP Chem), a joint venture of Phillips 66 and Chevron, will make a final investment decision on a new cracker in far southeast Texas in 2022, followed by an FID in 2023 on an USD8 billion joint venture petrochemical complex along the US Gulf Coast in 2023, said Phillips 66 CEO Greg Garland in early August, 2021.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.

Headquartered in San Ramon, California, Chevron Corporation is the the second-largest integrated energy company in the United States and among the largest corporations in the world. Chevron is involved in upstream activities including exploration and production, downstream activities including refining, marketing and transportation, and advanced energy technology. Chevron is also invested in power generation and gasification processes.
MRC

MOSCOW (MRC) -- Saudi petrochemical major SABIC more than doubled its fourth-quarter 2021 net profit on strong sales volume and higher product prices, said the company.

Profitability was higher despite impairment and restructuring provisions in certain capital assets and increased financial charges, SABIC said. "Our financial performance was strong throughout the year 2021, supported by favorable market conditions," SABIC vice chairman and CEO Yousef Abdullah Al-Benyan said.

The company’s fourth-quarter earnings before interest, tax, depreciation and amortization (EBITDA) surged 95% year on year to SR13.05bn. "Those results were driven by our operational performance and higher prices for most of our key products," Al-Benyan said. SABIC is 70%-owned by Saudi Aramco, the world’s biggest crude exporter.

As per MRC, SABIC started up its new polypropylene (PP) compounding line in Genk, Belgium. The new line is an addition to the company’s existing production capacity for Sabic PP compounds at the Genk site, and will use raw materials from SABIC PP plants at Gelsenkirchen, Germany, and Geleen, The Netherlands.

As per MRC, SABIC Innovative Plastics, a subsidiary of the largest Saudi petrochemical company - Sabic, on 27 September closed production at its polycarbonate (PC) plant in Mount Vernon (Mount Vernon, Indiana, USA) for planned preventive measures. Maintenance at this enterprise with a capacity of 245,000 tonnes of PC per year continued until 11 October.

SABIC is a diversified company manufacturing chemicals, industrial polymers, fertilizers and metals. It is the largest state-owned company in Saudi Arabia. SABIC is currently the world's second largest ethylene glycol producer, the third largest polyethylene producer, and the fourth largest polypropylene producer. Sabic cut its 2015 net profit by 7% to SR23.43 billion (Saudi reais), equivalent to USD6.24 billion, amid lower average selling prices and increased sales.
MRC

MOSCOW (MRC) -- Europe’s largest oil company Shell plc reported fourth-quarter earnings per ADS (on a current cost of supplies basis, excluding items - the market’s preferred measure - of USD1.66. The bottom line came in above the Zacks Consensus Estimate of USD1.40 and surged from the year-earlier quarter’s earnings of 10 cents per ADS, backed by stronger commodity prices, as per the company's press release.

Shell’s revenues of USD90.2 billion essentially doubled from fourth-quarter 2020 sales of USD45 billion.

Meanwhile, Shell repurchased USD1.7 billion of shares in the fourth quarter. The energy group also announced plans to buy back USD8.5 billion worth of shares in the first half of this year, including the recent pledge to return USD5.5 billion from the Permian sale proceeds.

Shell declared a fourth-quarter payout of 24 cents per share and expects to hike it by approximately 4% next quarter.

With the current conditions auguring well for the integrated energy stocks, Shell follows peers ExxonMobil and Chevron in benefiting from skyrocketing oil and natural gas prices.

Upstream: The segment recorded a profit of USD2.8 billion (excluding items) during the quarter, turning around from a loss of USD748 million (adjusted) reported in the year-ago period. This primarily reflects the impact of higher oil and gas prices, partly offset by lower volumes.

At USD73.49 per barrel, the group’s worldwide realized liquids prices were 80.3% above the year-earlier levels while natural gas prices more than tripled.

Shell’s upstream volumes averaged 2,161 thousand oil-equivalent barrels per day, down 8.9% from the year-ago period mainly due to the impact of divestments. Liquids production totaled 1,458 thousand barrels per day (down 5.1% year over year) and natural gas output came in at 4,080 million standard cubic feet per day (down 15.7%).

Oil Products: In this segment, the London-based super-major reported adjusted income of USD555 million, 2.8% higher than the year-ago period. The favorable comparison was due to the return to profitability for refining and trading, which offset lower sales volumes and refinery processing. Meanwhile, refinery utilization came in at 68%, down from 71% during the December-end quarter of 2020.

Integrated Gas: The unit reported an adjusted income of USD4.1 billion, jumping from USD1.1 billion in the October-December quarter of 2020. Results were primarily impacted by higher realized commodity prices and strong contribution from Shell’s LNG portfolio. On a somewhat bearish note, LNG liquefaction volumes decreased 3.3% from the fourth quarter of 2020 to 7.94 million tons. Meanwhile, total Integrated Gas production fell 1.6% year over year to 927 MBOE/d.

Chemicals: The segment recorded a loss of USD42 million (excluding items) during the quarter, compared to the year-ago earnings of USD381 million due to lower realized margins in base chemicals, unplanned turnaround activities and a fall in joint venture income.

Financial Performance: As of Dec 31, 2021, the Zacks Rank #2 (Buy) company had USD37 billion in cash and USD89.1 billion in debt (including short-term debt). Net debt-to-capitalization was approximately 23.1%, down from 32.2% a year ago.

During the quarter under review, Shell generated cash flow from operations of USD8.2 billion, returned USD1.8 billion to its shareholders through dividends and spent USD6.2 billion cash on capital projects.

The company’s cash flow from operations increased 30% from the year-earlier level. Meanwhile, the group raked in USD10.7 billion in free cash flow during the fourth quarter compared to just USD882 million a year ago.

As MRC reported earlier, Royal Dutch Shell plc. said in November, 2021, that its petrochemical complex of several billion dollars in Western Pennsylvania is about 70% complete and in the process to enter service in the early 2020s. The plant's costs are estimated to be USD6-USD10 billion, where ethane will be transformed into plastic feedstock. The facility is equipped to produce 1.5 million metric tons per year (mmty) of ethylene and 1.6 mmty of polyethylene (PE), two important constituents of plastics.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MR''s ScanPlast report, Russia's estimated PE consumption totalled 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

1.Marathon Petroleum posts strong Q4 profit and revenue beat on robust refining margins

MOSCOW (MRC) -- Marathon Petroleum Corp authorized a USD5 B share buyback plan, in addition to its existing programs, after strong refining margins drove a stunning fourth-quarter profit and revenue beat, sending its shares up 5%, according to Hydrocarbonprocessing. The Findlay, Ohio-based company said its refining and marketing margins more than doubled during the quarter amid a rebound in demand after a pandemic-induced slump. Refining margins will be well positioned for 2022 as light product inventories remain tight, Chief Executive Officer Michael Hennigan said on a call.


MRC

MOSCOW (MRC) -- Marathon Petroleum Corp authorized a USD5 B share buyback plan, in addition to its existing programs, after strong refining margins drove a stunning fourth-quarter profit and revenue beat, sending its shares up 5%, according to Hydrocarbonprocessing.

The Findlay, Ohio-based company said its refining and marketing margins more than doubled during the quarter amid a rebound in demand after a pandemic-induced slump.

Refining margins will be well positioned for 2022 as light product inventories remain tight, Chief Executive Officer Michael Hennigan said on a call.

Hennigan also expects to see recovery in jet fuel demand this year, even as it is "still roughly 15% below 2019 levels as business travel remains suppressed."

Marathon said it will spend USD1.7 B in 2022 and use 50% of USD1.3 B of the total investment to complete the conversion of its Martinez refinery into a renewable fuels facility.

Total project cost for Martinez is expected to be USD1.2 B.

The company posted an adjusted net income of USD794 MM, or USD1.30 per share, in the quarter ended Dec. 31, beating expectation of 56 cents per share, according to Refinitiv IBES.

"Stunning refining margin capture drives huge beat," said an analyst at Tudor, Pickering, Holt & Co.

Revenue of USD35.61 B came way ahead of analysts' average estimate of USD24.33 B.

Marathon's crude capacity utilization was 94%, resulting in a total throughput of 2.9 MMbpd in the reported quarter, compared with an 82% utilization and total throughput of 2.5 MMbpd a year earlier.

As MRC informed earlier, in May, 2021, US refiner Marathon Petroleum Corp said its board had approved the conversion of the Martinez refinery in California to a renewable diesel plant. Besides, the company made a final investment decision regarding this project. Martinez, once complete, will be one of the largest renewables facilities in the country.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,265,290 tonnes in the first eleven months of 2021, up by 14% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,363,850 tonnes in January-November, 2021, up by 25% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.

Marathon Petroleum Corporation (MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system. MPC's marketing system includes branded locations across the United States, including Marathon brand retail outlets.
MRC