Chevron Rebounds COVID-19 Decline, Reports $15.6 Billion Earnings in 2021

Chevron rebounded from COVID-19 caused decline of 2020 to post an impressive $15.6 billion in earnings in the period ended December 30, 2021.

This is unconnected to the continuous rise in the price of crude oil and growing global demand for the commodity across the world as economies gradually open up for business activities.

Chevron Corporation reported earnings of $5.1 billion ($2.63 per share – diluted) for the fourth quarter of 2021, compared with a loss of $665 million reported in the fourth quarter of 2020.

In its recently released earnings report, Chevron reported earnings of $15.6 billion for the 2021 financial year, compared with a loss of $5.5 billion in 2020. Included in 2021 were net charges for special items of $289 million, compared to net charges of $5.1 billion for special items in 2020.

The company also reported that sales and other operating revenues in the fourth quarter of 2021 were $46 billion, compared to $25 billion filed a year ago.

According to Chevron’s chairman and Chief Executive Officer, Mike Wirth, Chevron increased its quarterly dividend per share by 4 percent to $1.34 and repurchased $1.4 billion of company stock in 2021, all while increasing return on capital employed to 9.4 percent and reducing debt by $12.9 billion.

“In 2021, we delivered record free cash flow and accelerated our progress towards a lower carbon future”, he said.

Also, Chevron’s average sales price per barrel of crude oil and natural gas liquids was $63 in the fourth quarter of 2021, up from $33 a year earlier. The average sales price of natural gas was $4.78 per thousand cubic feet in the fourth quarter of 2021, up from $1.49 in last year’s fourth quarter.

Investors King gathered that the overall oil production in the United States in 2021 was affected by Hurricane Ida while OPEC and its partners (OPEC+) produced almost 1 million barrels per day (mb/d) below their quota due to maintenance and supply outages, especially for Angola, Kazakhstan, and Nigeria.

According to the World Bank, although estimates of the speed of recovery vary, oil demand is expected to exceed its pre-pandemic level in 2022. Increased substitution of oil for natural gas in heating and electricity is expected to boost demand by more than 0.5 mb/d.  Global oil production is forecast to see a robust recovery of around 6 mb/d in 2022, as OPEC+ unwind their production cuts over the year, and output in the United States increases by about 1 mb/d.