Chevron Losses Continue in Q4 Despite Price Growth

Chevron posted a $11mn adjusted loss in the fourth quarter, despite a recovery in oil prices towards the end of last year, as the US major's strong upstream figures were offset by weak fuel margins, acquisition costs and foreign exchange losses.

"2020 was a year like no other," Chevron chairman Mike Wirth said in a statement. "We were well positioned when the pandemic and economic crisis hit, and we exited the year with a strong balance sheet, having completed a major acquisition and increased our dividend payout for the 33rd consecutive year."

The result was considerably stronger than a year earlier, when Chevron booked a $6.7bn loss, on the back of higher oil and gas prices and a 6% bump in production. US upstream earnings came to $101mn, compared with $7.47bn a year earlier, with the reversal largely thanks to a lack of impairments. International upstream earnings totalled $400mn, versus $731mn a year before.

However, Chevron took on $338mn in downstream losses, versus $672mn in profits in the final quarter of 2019, amid weak fuel demand. A further $120mn related to its purchase of Noble Energy, closed in October, and it booked a further $534mn in foreign exchange losses. Noble offers Chevron "high-quality assets, opportunities and people", and together with cost cuts, the purchase is "positioning the company for the future," Wirth said.

The Noble takeover expanded Chevron's US unconventionals business and gave it a bigger position in the eastern Mediterranean, where Noble operates the giant Leviathan gas field off Israel. 

Chevron cut capital spending in 2020 by 35% in response to the pandemic, while also reining in operating expenses by $1.4bn  and generating $2.9bn in divestment proceeds, including from the sale of its Appalachian gas business in December. Its cash and cash equivalents came to $5.6bn at the end of 2020, down only $0.1bn year on year.