Chevron, the prominent oil and natural gas behemoth, saw a decline in performance in its Q2 results. The company’s profits took a hit due to operational and market challenges, reflecting the hurdles faced during the quarter. However, amidst this, there was an increase in global production. But what about its emissions and zero goals? Let’s delve deeper.
Chevron Corporation’s second-quarter 2024 earnings totaled $4.4 billion, a decrease from $6.0 billion in the same period in 2023. In simpler terms, the company’s profit slumped by 19% this year. CEO Michael Wirth attributed this decline to operational and other discrete items that impacted results. Factors such as reduced margins on refined product sales, the absence of favorable tax items, and adverse foreign currency effects significantly reduced earnings by $243 million. Adjusted earnings stood at $4.7 billion ($2.55 per share), compared to $5.8 billion ($3.08 per share) the previous year.
Despite the profit decline, Chevron witnessed an 11% increase in global production, driven by the successful integration of PDC Energy and strong performance in the Permian and DJ Basins. The company also expanded its exploration footprint through agreements in Namibia, Brazil, Equatorial Guinea, and Angola. Financially, Chevron allocated $6.0 billion to shareholders during the quarter, including $3.0 billion in dividends and $3.0 billion in share repurchases. The company’s cash flow from operations remained steady, supported by higher dividends from equity affiliates and reduced working capital.
Looking ahead, Chevron’s upcoming dividend of $1.63 per share signifies its commitment to returning value to shareholders amidst operational growth and strategic expansions in key global markets. Reuters reported that Chevron is banking on the Hess acquisition to establish a foothold in Guyana, which boasts the largest oil discovery in nearly two decades. Furthermore, the company aims for the deal to offset risks from underperforming oil projects in Australia and Kazakhstan, where operational issues have impacted production and maintenance work.
Is Chevron’s Emission Reduction Plan Sufficient?
Chevron has outlined plans to invest $8.0 billion in lower carbon energy initiatives from 2021 through 2028. This includes renewable fuels, carbon capture, offsets, hydrogen, and advanced technologies to enhance production and supply capabilities. Additionally, the company will put $2.0 billion towards carbon reduction projects over the same period. In 2023, Chevron’s emissions totaled 745 million metric tons of carbon dioxide equivalent (MtCO₂e), showing a steady rise in emissions over the years.
Chevron aims to achieve net-zero upstream Scope 1 and 2 greenhouse gas emissions by 2050 on an equity basis. This ambitious goal relies on significant technological advancements, including commercially viable low- or non-carbon energy sources, supportive policies, successful carbon capture and storage negotiations, and cost-effective carbon credits. The company has set targets to lower the carbon intensity of operations by 2028, aiming to be a leader in carbon intensity mitigation in the oil, products, and natural gas sectors.
Chevron actively reduces carbon intensity by refining its portfolio, enhancing operations, and utilizing its Marginal Abatement Cost Curve (MACC) process. The company has identified over 150 GHG abatement projects through the MACC process and plans to invest more than $600 million this year to advance these initiatives. By 2028, Chevron expects to invest approximately $2 billion in these projects, targeting around 4 million tons of annual emissions reductions upon completion. Key focus areas include energy management, methane management, CCUS, and offsets.
In the realm of methane emissions, Chevron has set a performance goal of 2.0 kg CO₂e/boe upstream methane intensity by 2028. The company has been proactive in designing new upstream facilities to avoid routine methane emissions and has tested advanced detection technologies since 2016. Despite challenges in accurate methane quantification, Chevron continues to collaborate with third parties to enhance methane detection and measurement, with key partnerships in place to drive progress.
Chevron’s Global Presence in Renewables
By 2030, Chevron aims to achieve targets such as 100 million barrels per day (mbd) of renewable fuels, 25 million metric tons per annum (mmtpa) in offsets and carbon capture, utilization, and storage (CCUS), and 150 million metric tons per annum (mtpa) in hydrogen production capacity. The company is making strides in renewable fuels and natural gas to reduce the carbon intensity of transportation and enhance sustainability.
Chevron is advancing its renewable fuels to cut the carbon intensity of transportation, with plans to reach a production capacity of 100 mbd by 2030, including renewable diesel and sustainable aviation fuel. The company is expanding its renewable diesel capacity with projects in Louisiana and investing in feedstock development in Argentina. Additionally, Chevron’s renewable natural gas projects focus on capturing dairy methane and converting it into useful fuel, with partnerships in place to drive these initiatives forward.
Chevron’s CCUS projects are a significant part of its sustainability efforts, with notable projects like Bayou Bend in…
[The article continues with more in-depth analysis and insights into Chevron’s efforts towards emission reduction, renewable energy, and sustainability initiatives.]
