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August 2, 2021

Chevron swings to Q2 profits of $3.1bn; in talks to partner with ONGC

Planning to reinstate share repurchases, the firm saw more than doubled sales and other operating revenues to $36.12bn.

By Archana Rani

Chevron has reported a net income of $3.1bn for the second quarter of 2021, compared with a loss of $8.27bn in the prior-year quarter.

The firm’s improved results benefitted from growing petroleum products demand and a surge in oil and gas prices.

The company recorded the growth despite $120m in remediation charges associated with previously divested assets and $115m pension settlement costs.

The oil and gas company’s adjusted earnings stood at $3.3bn in Q2 2021 compared with the $2.9bn adjusted loss in Q2 2020.

Chevron also reported sales and other operating revenues of $36bn for the quarter ended 30 June 2021, which is more than double compared to $16bn a year ago.

Chevron chairman and CEO Mike Wirth said that firm’s strong second-quarter earnings reflect improved market conditions, combined with transformation benefits and merger synergies.

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Wirth said: “Our free cash flow was the highest in two years due to solid operational and financial performance and lower capital spending.

“We will resume share repurchases in the third quarter at an expected rate of $2bn-$3bn per year.”

The firm’s net oil-equivalent production stood at 3.13 million barrels per day during the quarter,  an increase of 5% compared with the year-ago quarter.

The company posted a $1.4bn profit from its US upstream operations, compared with a loss of $2.1bn in the same period a year ago.

The improvement was attributed to higher crude oil realisations, the absence of Q2 2020 charges for special items, and higher crude oil production.

Chevron has already declared $1.34 per share of the quarterly dividend.

Concurrently, Chevron and TotalEnergies are reportedly in separate talks to partner with India’s ONGC to undertake upstream projects.

The Economic Times reported that Chevron US senior executives held talks with ONGC over exploration opportunities in India.

Additionally, ONGC and France’s Total have formed a technical committee to consider various opportunities, the news agency reported citing people familiar with the matter.

ONGC previously signed a preliminary deal with ExxonMobil for a partnership in the Indian exploration sector.

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