Chevron Corporation (NYSE: CVX) today reported earnings of $5.4 billion ($2.77 per share – diluted) for the second quarter 2013, compared with $7.2 billion ($3.66 per share – diluted) in the 2012 second quarter.

Sales and other operating revenues in the second quarter 2013 were $55 billion, compared to $60 billion in the year-ago period.

“Our second quarter earnings were down from the very strong level of a year ago,” said Chairman and CEO John Watson. “The decrease was largely due to softer market conditions for crude oil and refined products. Earnings were also reduced as a result of repair and maintenance activities in our U.S. refineries.”

“We continue to advance our major capital projects. An important milestone was achieved in the second quarter with the loading of the first cargo of liquefied natural gas at the Angola LNG project, one of the largest energy projects on the African continent.” Watson continued, “This marks an important step in the development of our LNG business. Additional LNG growth is expected in the coming years from our Gorgon and Wheatstone projects in Australia.”

Other recent upstream milestones include:

◾ Argentina – Signed an agreement advancing the development of shale oil and natural gas resources from the Vaca Muerta formation.

◾ Brazil – Awarded participation in a deepwater block in the Ceará Basin.

◾ Canada – Announced agreement to acquire additional, complementary acreage in the Duvernay Shale located in western Canada.

◾ Kurdistan Region of Iraq – Announced the acquisition of an 80 percent interest and operatorship of the Qara Dagh Block.

◾ United States – Announced a joint development agreement for additional Permian Basin acreage and access to related infrastructure.

“We also reached milestones on important growth investments in our downstream business,” said Watson. GS Caltex, the company’s 50 percent-owned joint venture, started commercial operations of its newest heavy oil upgrading unit at the Yeosu Refinery three months ahead of schedule. With this unit on-stream, GS Caltex is one of the largest upgraders of heavy oil in South Korea. In addition, Chevron Phillips Chemical Company LLC, the company’s 50 percent-owned affiliate, announced plans to expand annual ethylene production by 200 million pounds at its Sweeny complex in Old Ocean, Texas.

The company purchased $1.25 billion of its common stock in the second quarter 2013 under its share repurchase program.


Worldwide net oil-equivalent production was 2.58 million barrels per day in the second quarter 2013, down from 2.62 million barrels per day in the 2012 second quarter. Production increases from project ramp-ups in the United States and a project start-up in Angola were more than offset by normal field declines.

U.S. upstream earnings of $1.08 billion in the second quarter 2013 were down $235 million from a year earlier, due to higher operating and depreciation expenses, and lower crude oil production. Lower crude oil realizations were mostly offset by higher natural gas realizations.

The company’s average sales price per barrel of crude oil and natural gas liquids was $92 in the second quarter 2013, down from $97 a year ago. The average sales price of natural gas was $3.78 per thousand cubic feet, compared with $2.17 in last year’s second quarter.

Net oil-equivalent production of 659,000 barrels per day in the second quarter 2013 was unchanged from a year earlier. Production increases in the Marcellus Shale in western Pennsylvania, the Delaware Basin in New Mexico and at Perdido in the Gulf of Mexico were offset by normal field declines elsewhere. The net liquids component of oil-equivalent production decreased 1 percent in the 2013 second quarter to 455,000 barrels per day, while net natural gas production increased 3 percent to 1.23 billion cubic feet per day.

International upstream earnings of $3.87 billion decreased $436 million from the second quarter 2012. The decline between quarters was primarily due to lower volumes and realizations for crude oil, as well as higher operating expenses, partially offset by lower exploration expenses. Foreign currency effects increased earnings by $275 million in the 2013 quarter, compared with an increase of $219 million a year earlier.