OREANDA-NEWS. October 15, 2012. Chevron Corporation (NYSE: CVX) reported in its interim update that earnings for the third quarter 2012 are expected to be substantially lower than second quarter 2012. Upstream results are projected to be lower between sequential quarters, reflecting foreign exchange losses and lower liftings and realizations, partially offset by an asset sale gain, reported the press-centre of Chevron.

Downstream earnings in the third quarter are expected to be significantly lower than second quarter 2012, reflecting the impact of negative timing effects, lower realized margins and the negative effects of several smaller unrelated items.

U.S. net oil-equivalent production decreased 19,000 barrels per day during the first two months of the third quarter, largely reflecting impacts from Hurricane Isaac. International net oil-equivalent production during the first two months of the third quarter decreased 87,000 barrels per day. Planned maintenance in Kazakhstan and the United Kingdom caused the majority of the decline. The company expects increased production in the fourth quarter 2012 compared to the third quarter 2012, reflecting the completion of planned turnarounds and restoration of shut in production in the Gulf of Mexico.

International upstream earnings in the third quarter are expected to include a gain of approximately USD600 million from the previously announced sale of an equity interest in the Wheatstone LNG project.

U.S. crude oil realizations decreased USD 8.47, to USD 95.44 per barrel during the first two months of the third quarter, consistent with the typical monthly lag on pricing in the Gulf of Mexico. International liquids realizations decreased USD 2.35, to USD 96.86 per barrel. U.S. natural gas realizations increased USD 0.50 to USD 2.67 per thousand cubic feet, while international natural gas realizations decreased USD 0.11 to USD 5.99 per thousand cubic feet during the first two months of the third quarter.

For the full third quarter, U.S. and international refining margins increased compared to second quarter 2012, while U.S. marketing margins decreased sharply over the same period, particularly for the U.S. West Coast.

During the first two months of the third quarter, U.S. refinery crude-input volumes decreased by 92,000 barrels per day compared to the second quarter, largely reflecting the shutdown of the Richmond, California refinery crude unit in early August following a fire. The Richmond crude unit is expected to remain offline through the fourth quarter of 2012. Additionally, U.S. refinery crude-input volumes reflect disruptions from Hurricane Isaac at the Pascagoula, Mississippi refinery. International refinery crude-input volumes increased 42,000 barrels per day compared to the second quarter, reflecting a change in reporting for Star Petroleum Refining Company to gross input volumes, effective June 2012.

Downstream earnings in the third quarter are also expected to reflect unfavorable inventory impacts and negative mark-to-market effects on open derivative contracts tied to underlying physical positions, as opposed to notably positive contributions from these items in the second quarter. International downstream earnings are also expected to decrease substantially between sequential quarters due to several unrelated items, including charges associated with portfolio restructuring in Australia, as well as lower gains on asset transactions.

ALL OTHER
The company’s general guidance for the quarterly net after-tax charges related to corporate and other activities is between USD 300 million and  USD 400 million. Due to the potential for non-ratable accruals related to income taxes, pension settlements, environmental and other matters, actual results may significantly differ from the guidance range. Total net charges for the third quarter are expected to be notably higher than the general guidance range.

NOTICE
Chevron’s discussion of third quarter 2012 earnings with security analysts will take place on Friday, November 2, 2012, at 8:00 a.m. PDT. A webcast of the meeting will be available in a listen-only mode to individual investors, media, and other interested parties on Chevron’s website at www.chevron.com under the “Investors” section. Additional financial and operating information will be contained in the Earnings Supplement that will be available under “Events & Presentations” in the “Investors” section on the website.