Chevron Reports Huge Profits as Oil and Gas Prices Remain High

Chevron lost $5.5 billion in 2020, at the onset of the pandemic, but rebounded as oil and gas demand has grew. The oil industry’s recent hefty profits on high energy prices have drawn criticism this year from Democrats in Congress and President Biden, whose administration has urged U.S. fuel makers for months to raise spending and increase their output of oil, gasoline and diesel to help lower prices at the pump.

Many oil companies are in the process of drafting capital spending budgets for next year. Chevron signaled few changes on Friday to its spending next year from subdued investment levels in 2022. Chevron spent $8.2 billion in capital in the first nine months of this year, well below prepandemic levels.

The oil industry has tried to attract large investors back to their companies by generating record amounts of cash and increasing investor payouts. Chevron has boosted its quarterly dividend by 6% per share compared with the same period last year, paying out $2.7 billion in dividends, and it repurchased $3.75 billion in shares, equivalent to about 1% of the company. Its global oil and fuel production has stayed roughly flat this year from 2021, even as prices have risen.

Soaring demand for natural gas in Asia and Europe benefited the company, as it shipped a record number of cargoes of liquefied natural gas from its operations in Australia. It also brought its oil and natural-gas production in the Permian Basin of West Texas and New Mexico, the top U.S. oil field, to a quarterly record of more than 700,000 barrels of oil-equivalent a day, 12% higher than the year-earlier period.

Chevron recorded more than $600 million in net charges in the quarter related to favorable tax benefits that were absent this year and pension-settlement costs. Without those charges, the company would have hit record earnings.

Write to Collin Eaton at [email protected]

Chevron lost $5.5 billion in 2020, at the onset of the pandemic, but rebounded as oil and gas demand has grew. The oil industry’s recent hefty profits on high energy prices have drawn criticism this year from Democrats in Congress and President Biden, whose administration has urged U.S. fuel makers for months to raise spending and increase their output of oil, gasoline and diesel to help lower prices at the pump.

Many oil companies are in the process of drafting capital spending budgets for next year. Chevron signaled few changes on Friday to its spending next year from subdued investment levels in 2022. Chevron spent $8.2 billion in capital in the first nine months of this year, well below prepandemic levels.

The oil industry has tried to attract large investors back to their companies by generating record amounts of cash and increasing investor payouts. Chevron has boosted its quarterly dividend by 6% per share compared with the same period last year, paying out $2.7 billion in dividends, and it repurchased $3.75 billion in shares, equivalent to about 1% of the company. Its global oil and fuel production has stayed roughly flat this year from 2021, even as prices have risen.

Soaring demand for natural gas in Asia and Europe benefited the company, as it shipped a record number of cargoes of liquefied natural gas from its operations in Australia. It also brought its oil and natural-gas production in the Permian Basin of West Texas and New Mexico, the top U.S. oil field, to a quarterly record of more than 700,000 barrels of oil-equivalent a day, 12% higher than the year-earlier period.

Chevron recorded more than $600 million in net charges in the quarter related to favorable tax benefits that were absent this year and pension-settlement costs. Without those charges, the company would have hit record earnings.

Write to Collin Eaton at [email protected]