UPDATE 2-Chevron sees Q3 profit flat vs Q2, boosted by sale
By Braden ReddallOct 11 (Reuters) - Chevron Corp expects third-quarter
earnings similar to the previous quarter, with lower oil prices
and output offset by a $500 million gain on the sale of its Welsh
refinery and British and Irish marketing assets.The second-largest U.S. oil company reported a $7.7 billion
net profit in the second quarter, and analysts had previously
been looking for $6.5 billion on average in the third quarter,
according to Thomson Reuters I/B/E/S.But any improvement in near-term profit estimates could be
offset by lingering concerns about efforts by leading
private-sector oil companies to increase their oil and gas
production.Chevron’s international oil-equivalent production fell to 1.93
million barrels per day (bpd) in the first two months of the
quarter from 2 million in all of the second quarter, the company
said in its quarterly interim update on Tuesday.Chevron said this drop largely reflected a now-remediated
third-party pipeline incident in Thailand and planned work in
Kazakhstan and Britain, predicting better production this
quarter as these effects disappear and new output is added.Average U.S. production in July and August fell to 676,000 bpd
from 694,000 in the second quarter, it said, blaming that on
maintenance work in the Gulf of Mexico.In total, Chevron reported 2.60 million bpd of
oil-equivalent production for the first two months of the quarter,
down from 2.69 million in the second quarter.In July, Chevron trimmed its average 2011 output estimate
by 30,000 bpd to 2.76 million, assuming oil at $79 per barrel,
or 2.73 million bpd with Brent crude prices assumed at
$111. Under production-sharing contracts, pricier oil means
Chevron must leave more output in the hands of state-owned
partners around the world.Brent crude averaged $112 per barrel in the quarter, down from
$117 in the second quarter but up from $77 a year before.Chevron switched to using Brent from the U.S. benchmark of
West Texas Intermediate earlier this year when calculating
production-sharing contract changes.Chevron, offering the quarter’s first big oil company view
of last quarter, cited data showing refining margins were mixed
overall. They edged higher in Singapore and Europe, while U.S.
refining margins came off their second-quarter peaks, which was
anticipated by a Chevron executive in May.As for the one-off $500 million gain for the downstream
division, Valero Energy Corp , the largest U.S. company
focused solely on refining, closed its $730 million purchase of
Chevron’s Pembroke refinery in August.Chevron shares slipped immediately after the interim
update, but were last trading just 5 cents lower at $97.55 in
after-hours trading on Tuesday.The San Ramon, California-based company reports its
third-quarter results on Oct. 28.
