“We are focused on improving results by changing outcomes within our control”, Chevron CEO John Watson said in a statement. But the difference between the price of crude oil used in its West Coast refineries and the price Chevron charged for their gasoline hit $32.98 per barrel during the third quarter, according to the company. They did not announce exactly where all the cuts will take place, but 600 jobs have already been eliminated in California this year. Vice president of investor relations Jeffrey Woodbury told analysts that Exxon has “continuously… right-sized our global function organization” and has the same number of employees today that it had in 1999, before its merger with Mobil. Profit from refining oil into fuels jumped 59 percent to $2.2 billion.
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Watson added prices should rise eventually; however, he is “sober about the current realities of lower prices” for the next few years.
Many industry experts agree, but the downturn has lasted longer than most expected.
The results topped Wall Street expectations, but Chevron does not adjust its reported results based on one-time events such as asset sales. The average estimate of 10 analysts surveyed by Zacks Investment Research was for 79 cents per share. The stock closed last trading session at $88.77, down by -2.71%, with a volume of 8,606,586 shares against an average volume for the last 3 months of 11,996,300.
“It’s really bad for megaprojects now”, said Joseph Triepke, managing director at Oilpro.com and a former analyst at Citadel’s Surveyor Capital unit. Exxon noted that margin growth contributed $1.4 billion to its downstream earnings. The consensus target price stands at $93.25. It plans to slash that figure further to $20 billion to $24 billion in 2017 and 2018.
Royal Dutch Shell PLC posted a $US6.1 billion loss in the third quarter after its decision to walk away from exploring the Arctic for oil and exploiting Canada’s oil sands resulted in $US7.9 billion in charges. Chevron United States of America Inc.is the operator and holds a 55% stake with with co-owners Cobalt worldwide Energy LP (20%), Samson Offshore Anchor LLC (12.5%) and Venari Resources LLC (12.5%). In addition, production fell 1 percent to 2.5 million barrels of oil equivalent per day.
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Capital and exploration spending for 2016 will range from $25 billion to $28 billion, which would be roughly 25 percent below the budget for 2015, Chevron said.
