Chevron recorded a net loss of $1.47 billion for the second quarter of 2016, on the back of the continued oil price depression. This is down from a profit of $571 million for the second quarter of 2015. The company said the negative result included impairment charges of $2.8billion. Reuters notes this is Chevron’s biggest quarterly loss for the last 15 years.
Total revenues for the period totaled $29.28 billion, a decline from $40.36 billion a year earlier, of which sales and operating revenue accounted for $28 billion. That’s down from $37 billion for April-June 2015.
Oil production in the period also fell, to 2.53 million tones of oil equivalent daily. Commenting on the results, CEO John Watson said, ““The second quarter results reflected lower oil prices and our ongoing adjustment to a lower oil price world. In our upstream business, we recorded impairment and other charges on certain assets where revenue from expected oil and gas production is expected to be insufficient to recover costs. Our downstream business continued to perform well.”
Like its peers, Chevron has had a hard time tackling the fallout of the oil price rout that started in mid-2014. Cost-cutting, writeoffs on projects and layoffs, however, have turned out to be insufficient to sustain the company’s profitability amid the persistent glut. Asset sales are also a major element of its coping mechanism: the second-largest US-based oil supermajor plans to generate between $5 and $10 billion from asset sales.
Despite the distress, Chevron just recently approved a $37billion expansion of the Tengiz oilfield in Kazakhstan, which it operates in consortium with ExxonMobil and Russia’s Lukoil. Plans are to bolster production to 39 million tons of crude per year, or 850,000 barrels per day, by 2022.