Chevron profit to be hit by lower refinery processing
SAYS CRUDE RUNS FALL 20% DUE TO FIRE AT CALIFORNIA PLANT
Chevron Corp expects its first quarter profit to rise from the fourth quarter on a large gain from a sale, but said results will be hurt by decreased use of its refineries and lower oil prices.
The second-largest US oil and gas producer said yesterday it expects an after-tax gain of $700 million in the quarter from the sale of its 31 per cent stake of its Nerefco refinery in the Netherlands.
The company, which plans to release its results on April 27, posted earnings of $3.77 billion, or $1.74 a share, in the fourth quarter.
The average first quarter earnings forecast of analysts, which generally excludes one-time items such as the refinery sale from their projections, was $1.67 a share, according Reuters Estimates.
The San Ramon, California, company said the amount of crude processed at Chevron’s US refineries fell 20 per cent during the first two months of the quarter as a fire at its Richmond, California, refinery lengthened planned maintenance at the unit.
It said it did not fully benefit from higher first quarter benchmark refin- ing margins on the US West Coast due to the repairs at Richmond. It said international refining margins were also below indicators.
The company also said oil and gas production in the first two months of 2007 fell about 1.7 per cent from fourth quarter levels. It produced an average of 2.61 million barrels of oil equivalent per day, down from about 2.66 million barrels of oil equivalent per day in the fourth quarter.
Chevron has said it expects its 2007 production to average about 2.6 million barrels of oil equivalent per day, down about 70,000 barrels of oil equivalent per day from last year’s levels.
Earlier this year, the company said most of that decline would come from Venezuela, where the company will lose about 64,000 barrels per day as the government increases its control over some Chevron assets.
But most of the drop in January and February came in the US, where dropped about 3 per cent due to downtime at third-party pipelines that affected its assets in the Gulf of Mexico and San Joaquin Valley regions.