US oil and gas company Chevron has reported $2.25bn in total earnings in the fourth quarter (Q4) of 2023, a 64.4% decrease from the $6.35bn reported in the same period in 2022.
The decline was attributed primarily to lower upstream realisations, losses from decommissioning obligations and higher impairment charges.
Chevron faced substantial losses due to decommissioning obligations for assets previously sold in the US Gulf of Mexico, which amounted to $1.9bn.
Additionally, the energy company recorded $1.8bn in US upstream impairment charges, with a notable impact from operations in California.
These factors, combined with lower margins on refined product sales, have contributed to the downturn in earnings.
Chevron’s yearly earnings also experienced a decline, falling by 39.7% to $21.36bn from $35.46bn in 2022.
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The company said its worldwide and US net oil-equivalent production reached annual records.
A 4% increase in worldwide annual production, which exceeded 3.1 million barrels of oil-equivalent per day, was driven by the acquisition of PDC Energy and growth in the Permian Basin.
Investments in the sector have also risen, with Chevron’s capital expenditure (capex) in 2023 increasing by 32% compared with the previous year.
This rise is primarily due to higher investments in the US, including significant spending on PDC assets post-acquisition and the acquisition of a majority stake in ACES Delta, totalling approximately $1.1bn.
The company’s cash flow from operations has seen a downturn, influenced by lower commodity prices and reduced margins on refined product sales.
The cash returned to shareholders reached more than $26bn for 2023, up 18% from the year before.
Chevron chairman and CEO Mike Wirth said: “In 2023, we returned more cash to shareholders and produced more oil and natural gas than any year in the company’s history.
“We also strengthened our portfolio with traditional and new energy acquisitions to help meet the growing demand for affordable, reliable and ever-cleaner energy.”