Chevron reports third-quarter profit despite challenging market conditions

Chevron has unexpectedly reported a profit for the third quarter of 2020 achieved due to a reduction in capital costs due to the drop in demand for crude oil caused by the pandemic.

Instead of the loss expected by Bloomberg analysts of 27 cents per share, the California oil giant reported a profit of 11 cents. This news is all the more unexpected, given that production at the company’s oil and gas fields has fallen to the lowest levels in the past two years.

According to Chevron CEO Mike Wirth, things are going badly in the industry and there is no prospect of the market recovering to a pre-pandemic level.
Compared to the same period last year, the company’s profit from oil production fell by 91 percent to $ 235 million, while revenues from refining decreased by more than 60 percent.

Falling production and profits have forced Chevron not only to cut capital costs, but also personnel. The company currently has to pay severance payments to at least 6,000 employees, which will cost it more than half a billion dollars by the end of 2020.

At the same time, Chevron is going through the acute phase of the crisis somewhat easier than its main competitors in the oil and gas sector. Moreover, at the end of the third quarter, the company managed to beat the market value of its long-standing and significant competitor Exxon, which allowed it to become the largest oil company in America at the moment.