Chevron Corp posted a drop in quarterly profit on Friday and its new boss said the second-largest US oil company had plenty of work to do on its own project line-up without making any big acquisitions.
Chief executive John Watson also said there would be no refinery closures in the near term, despite a bad performance in the fourth quarter that weighed heavily on its bottom line.
Exxon Mobil Corp’s planned purchase of US natural gas producer XTO Energy cast the industry’s attention on how Exxon’s smaller rivals might respond.
Chevron’s anticipated production growth this year will not come anywhere close to the 9 percent fourth-quarter increase, but Watson, who just took over the top job at the start of this month, said the company’s long-term pipeline was very full.
“We can see growth out through the rest of this decade, and so we haven’t been particularly needy, if you will, to do a large transaction,” he told analysts on a conference call. “We haven’t felt that the opportunities that are out there compete with other things that we have in our portfolio.”
For one, the company will be spending heavily off the coast of Western Australia this year, with US$3.5 billion of its US$21.6 billion capital spending budget going toward construction of its massive natural gas operations there.
Fourth-quarter profit fell to US$3.07 billion, or US$1.53 per share, from US$4.9 billion, or US$2.44 per share, a year before, with Chevron being hit by negative currency moves and a lack of derivative gains and a US$600 million asset swap a year before.
Watson, on his first call with analysts since becoming CEO, said it was “quite premature” to talk of closing refineries, but he would seek cost cuts and aim for a 10 percent-plus downstream return through the cycle.
Chevron will merge its chemicals arm with the rest of the downstream business and retain a spending bias that will shift its focus over time to exploration and production, he said.
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