News summaries from company press releases, and from unaffiliated news agencies are provided below. The summaries are sorted by month and are further categorized as upstream news, downstream news, and business/finance news.
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- Chevron Corporation (NYSE: CVX) announced there has been an adverse ruling by the panel of three temporary judges presiding over appellate proceedings in the Provincial Court of Justice of Sucumbíos in Lago Agrio, Ecuador in an environmental lawsuit involving Texaco Petroleum Company, upholding a lower court's ruling from February 2011. Chevron continues to seek recourse through legal proceedings outside of Ecuador. In the arbitration proceedings Chevron instituted against Ecuador in The Hague under the U.S.-Ecuador Bilateral Investment Treaty, the Tribunal issued an order on February 9, 2011 requiring Ecuador to take all measures at its disposal to prevent enforcement of the Lago Agrio judgment until further order of the Tribunal. The Tribunal also recorded that if it were established that any judgment made by an Ecuadorian court in the Lago Agrio case was a breach of an obligation Ecuador owed to Chevron as a matter of international law, any loss arising from the enforcement of such judgment (within and without Ecuador) may be losses for which Ecuador would be responsible to Chevron under international law. Chevron also is pursuing an action in the U.S. District Court for the Southern District of New York against the Lago Agrio plaintiffs' representatives for violations of the federal racketeering statute, common-law fraud, and other relief based upon the overwhelming evidence of their fraud and corruption.
- An Ecuadorean appeals court upheld a ruling that the Chevron Corporation, the United States oil giant, should pay $18 billion in damages to plaintiffs who accused it of polluting the Amazon jungle and damaging their health. A local judge ordered Chevron to pay $8.6 billion in environmental damages in February, but the amount rose to about $18 billion because Chevron failed to make a public apology as required by the original ruling. Chevron swiftly denounced the ruling, calling it “illegitimate” and fraudulent.
- Chevron Corporation (NYSE: CVX) reports that its subsidiary, Chevron Nigeria Limited, is working to contain a fire that ignited early this morning aboard the K.S. Endeavor, a drilling rig offshore Nigeria operated by FODE Drilling Nigeria Limited. The rig was drilling a natural gas exploration well, located in the Funiwa Field approximately six miles (10 kilometers) offshore and in approximately 40 feet (12 meters) of water. One hundred and fifty-four personnel were on the rig and an associated barge. Two contractors are still unaccounted for while all others are safe and undergoing medical examinations at an adjacent production platform. Aggressive search and rescue activities continue for the two missing personnel.
- Chevron Corporation (NYSE: CVX) said that an extensive search and rescue effort continues for two contractors who remain missing after yesterday's fire aboard the K.S. Endeavor, a drilling rig offshore Nigeria operated by FODE Drilling Nigeria Limited. While Chevron's highest priority remains the rescue of the missing contractors, the company continues to devote the necessary resources to resolve the rig incident in a responsible and timely manner. As previously reported, the K.S. Endeavor was drilling a natural gas exploration well for Chevron Nigeria Limited (CNL). The well is located in the Funiwa Field approximately six miles (10 kilometers) offshore and in approximately 40 feet (12 meters) of water. Chevron reports that 152 workers on the rig and an associated barge were safely evacuated. They are now onshore and have been given medical examinations. Two remain hospitalized due to minor burns, while others are being held for further observation. While a full investigation is still under way, Chevron said initial indications point to the possible failure of surface equipment during drilling operations that led to a loss of well control. The well continues to burn and the rig has partially collapsed. At this time, the company cannot estimate how long the fire will continue. Chevron has contracted with and is mobilizing the Transocean rig Baltic to commence drilling a relief well. Chevron said the time required to complete the relief well is uncertain, but could extend for some period. Chevron is deploying additional drilling experts and well control specialists to Nigeria to assist with well control efforts and the relief drilling process. A small sheen is visible in close proximity to the well, which the company continues to evaluate. The sheen is estimated at approximately 13 barrels. Production from Chevron's North Apoi platform remains shut in since it is situated in close proximity to the incident. Total production from the platform was approximately 2,000 barrels per day.
- Chevron has filed an appeal with Ecuador’s National Court of Justice to review an order that it must pay $18 billion in damages for polluting the Amazon jungle. Chevron inherited the case when it bought Texaco a decade ago. The appeal argues that the lower courts violated Ecuador’s Constitution by refusing to take corrective action in response to what Chevron calls “extensive fraud and corruption” committed by the plaintiffs’ lawyers and representatives. The plaintiffs have responded by citing Chevron’s own test data in documenting the pollution and arguing that Chevron could be sued for damages by third parties. In related litigation in New York, the plaintiffs also accused the company of mishandling soil and water samples during the trial by maintaining two different laboratories, based on testimony from a Chevron expert.
- Chevron Corporation (NYSE: CVX) said that its subsidiary, Chevron Nigeria Limited (CNL), has called off the search and rescue activities for two contractors who were missing after Monday's fire aboard the K.S. Endeavor, a drilling rig offshore Nigeria operated by FODE Drilling Nigeria Limited. CNL reports that it is continuing its plans and preparations to drill a relief well, and its investigation into the cause of the incident. CNL confirms that 152 workers on the shallow water rig and associated barge were safely evacuated from the incident, which occurred about 10 kilometers (6 miles) from shore. Two workers who received medical care for burns have been released from the hospital. Additional updates on the incident are available at Chevron Updates.
- Chevron Corp. (NYSE: CVX) announced a natural gas discovery by its Australian subsidiary in the Exmouth Plateau area of the Carnarvon Basin, offshore Western Australia. The Satyr-3 well encountered approximately 243 feet (74 meters) of net gas pay. The well is located 113 miles (182 kilometers) north of Exmouth in the WA-374-P permit area, and was drilled in 3,688 feet (1,124 meters) of water to a depth of 13,369 feet (4,075 meters).
- Chevron Corporation (NYSE: CVX) announced that it has filed an appeal seeking review by Ecuador's National Court of Justice of the adverse appellate judgment issued against the company in early 2012 by a panel of three temporary judges in the environmental lawsuit in Ecuador. Chevron's appeal, called a petition for cassation, details multiple legal grounds for reversal of the January appellate court decision. The appeal establishes that the lower courts violated the Ecuadorian constitution by refusing to take any corrective action in response to the extensive fraud and corruption committed by plaintiffs' lawyers and their representatives. The filing goes on to outline several other fundamental points, including: that the lower court's judgment is unlawfully premised on fraudulent and scientifically baseless evidence; that the judgment is illegally based upon the retroactive application of law; that it ignores the releases of liability granted to Texaco Petroleum Co. (Tex Pet) by the government of Ecuador following a cleanup of Tex Pet's share of remediation sites in the 1990s; and that the judgment awarded punitive and other damages never requested in plaintiffs' complaint and not allowed under Ecuadorian law.
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• Business/Finance news:
- Chevron Corporation (NYSE: CVX) reported in its interim update that earnings for the fourth quarter 2011 are expected to be significantly below third quarter 2011 results. Absent foreign exchange impacts, upstream earnings are projected to be comparable with third quarter results. Downstream earnings in the fourth quarter are expected to be near breakeven. Lower margins and refinery input volumes, and the absence of an asset sale gain are expected to reduce downstream earnings significantly compared to third quarter results. Full third quarter earnings included foreign exchange gains of nearly $450 million, compared to a loss anticipated in the fourth quarter.
- The Board of Directors of Chevron Corporation (NYSE: CVX) declared a quarterly dividend of eighty-one cents ($0.81) per share, payable March 12, 2012, to holders of common stock as shown on the transfer records of the Corporation at the close of business on February 17, 2012.o - Chevron Corporation (NYSE: CVX) reported earnings of $5.1 billion ($2.58 per share – diluted) for the fourth quarter 2011, compared with $5.3 billion ($2.64 per share – diluted) in the 2010 fourth quarter. Full-year 2011 earnings were $26.9 billion ($13.44 per share – diluted), up 41 percent from $19.0 billion ($9.48 per share – diluted) earned in 2010.o - Chevron’s fourth-quarter profit declined to $5.1 billion, or $2.58 a share, from $5.3 billion, or $2.64, a year earlier. Its earnings per share were 32 cents below the average of five analysts’ estimates compiled by Bloomberg. Sales rose 11 percent to nearly $60 billion during the quarter. Chevron’s American refineries lost an average $2.2 million a day during the final three months of 2011 as crude-processing margins shrank and maintenance work at a California plant curbed fuel output, the company said in a statement. Chevron added the equivalent of 1.67 billion barrels in reserves last year, enough to replace 171 percent of the oil and gas the company pumped last year.
- There are still many billions of dollars to be made in the old oil patch, even with the world far more focused on alternative and renewable sources of energy. But the business of refining that oil into various fuels is still a hard way to make a buck. That's one of the lessons investors might draw from Chevron Corp.'s fourth-quarter earnings report. The San Ramon, Calif.-based oil giant raked in a net profit of $5.12 billion, or $2.58 a share. But losses in its refinery business during the period meant its profit fell below both its 2010 fourth-quarter performance and Wall Street expectations. Chevron's results left it 3.2% short of the $5.3 billion, or $2.64 a share, it earned during the final three months of 2010, even though the price of oil in the fourth quarter of 2011 was substantially higher than it had been a year earlier. Wall Street analysts had been expecting something between $2.84 to $2.88 a share. The difference: Chevron's downstream refinery business lost $204 million in the fourth quarter, compared with a profit of $475 million a year earlier. The losses were occurring even as several U.S. refiners scrambled to find overseas customers, logging record U.S. export totals. But Chevron isn't struggling overall, as its executives emphasized. Fourth-quarter sales climbed to $58 billion, compared with $52 billion a year earlier. For the full 2011 year, Chevron had a net profit of $26.9 billion, or $13.44 per diluted share, up 41% from $19.0 billion, or $9.48 per diluted share in 2010. Fourth-quarter oil production declined, to 2.64 million barrels per day from 2.79 million barrels a day a year earlier, but Watson said the company was well positioned for the future, adding 1.67 billion barrels of net oil reserves during 2011. Chevron is the smallest of the world's five "super major" oil conglomerates, and the second-biggest based in the U.S. Its current size is the result of a 2001 merger with Texaco and its acquisition of Unocal in 2005. Chevron stock was down $3.11 to $103.49 during trading on the New York Stock Exchange.
- Doug Willmore wasn't on the job long as El Segundo's city manager before discovering just how deep the town's loyalty runs to the oil giant that put it on the map. After the city began discussing a big tax increase for the Chevron oil refinery a few months ago, he walked out of City Hall to find a note on the windshield of his car. "This is a Chevron town and we owe our existence to them and should be grateful. Get that through your head," it read. The note ended: "Beat it!!!!!!!"After decades of mostly prosperous times for the city and the oil company, El Segundo is having a falling-out with its longtime benefactor. A majority of the City Council thinks Chevron should pay an additional $10 million a year in taxes — about three times what it pays now. But the tax push has stirred strong emotions in the town, which was formed a century ago when Chevron built its second refinery there. El Segundo ("The Second One" in Spanish) gets its name from the refinery that overlooks the Pacific Ocean and stretches more than a mile inland. Many residents remain loyal to Chevron and feel the proposed tax hike is unfair. The dispute has roiled politics in the small upscale city south of Los Angeles International Airport known for a downtown district lined with mom-and-pop shops, good schools, cool ocean breezes and the rumble of jetliners. Although only 17,000 people live in the city, El Segundo's population swells to 80,000 on weekdays as workers roll into town for jobs at Northrop Grumman, DirecTV, Raytheon, Mattel, Boeing and Chevron. The tax battle began late last year when Mayor Eric Busch asked Willmore, the former chief executive of Salt Lake County in Utah, to look into an acreage tax Chevron pays the city. El Segundo enacted the tax on refineries and chemical plants in the 1980s. It receives about $5 million a year from Chevron in various taxes, including the acreage tax and the city's cut of the property tax. But city officials found that other cities with refineries generated significantly more taxes: Nearby Torrance got $9.8 million from the Exxon Mobil refinery, Carson got $10.2 million from the BP refinery and Richmond, in Northern California, got $15.4 million from its Chevron refinery. He also discovered that the town's other major employers were paying about five times more per acre in various taxes than the oil company. The 951-acre refinery encompasses 36% of the commercial land in the city but contributes just 10% of the city's commercial tax revenue, he said. Armed with the data, the City Council began discussing a tax hike in December. Chevron officials said they felt blindsided.
• Upstream news:
- Chevron Corp. (NYSE: CVX) reports that its affiliate Tengizchevroil LLP (TCO) expects to enter front-end engineering and design (FEED) in 2012 for an expansion project to increase total daily production between 250,000 and 300,000 barrels. The Future Growth Project (FGP) will utilize sour gas injection technology used in existing operations. An early estimate of the total project cost is in the $6 - $8 billion range. The upcoming FEED work will refine the estimate range. TCO is also undertaking an ongoing drilling program and has entered FEED on a well head pressure management project to support current operations. An early estimate of the total project cost for the trio of projects is in the $20 - $25 billion range. Chevron has a 50 percent interest in Tengizchevroil. Other partners are KazMunaiGas, 20 percent; ExxonMobil Kazakhstan Ventures Inc., 25 percent; and LUKArco, 5 percent.
- Chevron Nigeria Limited (CNL) has begun the process of drilling a relief well to seal the Funiwa 1A natural gas well. The relief well is being drilled to extinguish a fire that began Jan. 16 at the original well, approximately six miles (10 km) off the coast of Nigeria. No oil was spilled or has flowed from this natural gas well. CNL drilling plans will enable the cementing and abandonment of the Funiwa 1A well. The relief well is being drilled by the Transocean Baltic rig with approvals from Nigerian authorities.
- An international arbitration tribunal issued a Second Interim Award ordering Ecuador to prevent enforcement and recognition of the $18.2 billion Lago Agrio judgment, both within and without Ecuador. The tribunal, convened under the authority of the U.S.-Ecuador Bilateral Investment Treaty (the "BIT") and administered by the Permanent Court of Arbitration at The Hague, is considering the claims of Chevron Corporation (NYSE: CVX) and TexPet (a Chevron subsidiary) that Ecuador has breached its obligations under the BIT and international law through the Lago Agrio litigation, the resulting judgment, and the appellate decision upholding the judgment. The Second Interim Award directs the Republic of Ecuador, including "its judicial, legislative, or executive branches" to "take all measures necessary to suspend or cause to be suspended the enforcement and recognition within and without Ecuador" of the Lago Agrio judgment. In particular, the tribunal states that these measures must "preclude any certification" by Ecuador or its courts that would cause the judgment to become enforceable (referring to a procedural step in Ecuador in which a party must obtain a certification from the courts in order to enforce a judgment). Yesterday's Award is "immediately final and binding" on the parties and Chevron will promptly post a $50 million bond required by the tribunal. The Award expands on the tribunal's prior Interim Measures Order dated February 9, 2011 and First Interim Award dated January 25, 2012, which remain in effect. The tribunal's Second Interim Award can be accessed at www.chevron.com/ecuador.
- Chevron Corporation (NYSE: CVX) through its Nigerian subsidiary Chevron Nigeria Limited confirmed first production from the deepwater offshore Usan project in Nigeria. Discovered in 2002, the Usan field is approximately 62 miles (100 km) off the coast of the Niger Delta, in water depths of about 2,400 feet (750 m). The project will use a floating production, storage and offloading vessel with a storage capacity of two million barrels of oil and a maximum total daily production capacity of 180,000 barrels of crude oil. Associated gas will be reinjected in the reservoir. Partners in the Usan project include Chevron Petroleum Nigeria Limited (30 percent), Total E&P Nigeria Limited (20 percent and operator), Esso E&P Nigeria (Offshore East) Limited (30 percent) and Nexen Petroleum Nigeria Limited (20 percent). Usan is Chevron's second deepwater project in Nigeria. The Agbami project achieved first oil in 2008 and is currently producing approximately 240,000 barrels of crude oil per day. Chevron holds a 67.3 percent interest and operates the Agbami project.
- Chevron Corp. (NYSE: CVX) announced that an international arbitration tribunal, convened under the authority of the U.S.-Ecuador Bilateral Investment Treaty (the "BIT") and administered by the Permanent Court of Arbitration at The Hague, ruled that it has jurisdiction to hear Chevron's claims against the Republic of Ecuador. Chevron filed its request for arbitration in 2009, claiming that the Republic violated its obligations under the BIT and international law. Chevron's arbitration claim stems from the government of Ecuador's exploitation of the ongoing environmental lawsuit against the company in Ecuador and its courts' failure to administer justice in a trial that has been marred by fraud. Additionally, Chevron maintains that the government of Ecuador has failed to uphold prior settlement and release agreements that the government of Ecuador entered into with Texaco Petroleum Company (now a Chevron subsidiary) when the consortium between Texaco Petroleum and Petroecuador was terminated.
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- Chevron Corp. (NYSE: CVX) renewed its request of authorities in Ecuador to investigate the overwhelming evidence of fraud tainting the Lago Agrio lawsuit after the Associated Press and Ecuador's El Universo newspaper revealed that Nicolás Zambrano, the judge who issued the $18.2 billion judgment against Chevron, has been dismissed from the bench due to his complicity in an emerging story of court corruption and drug trafficking in Ecuador. The media outlets reported that the Judicial Council, the body that governs the Ecuadorian judiciary, has determined that Judge Zambrano, and Judge Leonardo Ordóñez, who previously presided over the Lago Agrio lawsuit, should be dismissed from their positions on the Court of Justice of Sucumbíos in Lago Agrio following an investigation into allegations of lenient treatment of drug dealers in cases before them. The investigation and subsequent dismissals followed a complaint filed by Ecuador's Organized Crime Prevention Unit.
- Chevron Corporation (NYSE: CVX) is delivering strong financial results and progressing the projects that will drive the next significant growth phase, executives said at the company's annual security analyst meeting in New York. George Kirkland, vice chairman and executive vice president, Upstream and Gas, recapped the 2011 results of the upstream business, which included the No. 1 ranking relative to industry peers in earnings and cash flow per barrel and return on capital employed.
- Chevron Corporation (NYSE: CVX) announced that its subsidiary Chevron Brasil Upstream Frade Ltda. has requested authorization for a temporary suspension of field production operations at the Frade Field in the Campos Basin in Brazil. The decision to request the temporary shut-in of production is a precautionary measure based on very recent information. Chevron has identified a small new seep in the field and subsidence in the area. The company will conduct a comprehensive technical study and prepare a complementary study to better understand the geological features of the area, working with our partners and seeking necessary approvals from National Petroleum Agency (ANP). The decision was endorsed by Chevron's partners. The company has filed its request before the appropriate regulatory agencies and anticipates a response in a short timeframe. Frade field currently produces a total of approximately 60,000 barrels per day (approximately 30,000 barrels net). Following an order from ANP in December, Chevron suspended water reinjection in four wells in the field. Chevron has a 51.74 percent operating interest in the Frade Field. Other partners in the project are Petróleo Brasileiro S.A. – Petrobras, 30 percent; and Frade Japão Petróleo Ltda., a joint-venture company of INPEX, Sojitz and JOGMEC, 18.26 percent.
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- Chevron Corporation (NYSE: CVX) announced that Charles W. "Wick" Moorman has been nominated for election to Chevron's board of directors. Moorman will be part of the slate of board nominees to be considered for election to Chevron's board at the company's Annual Meeting of Stockholders on May 30. Moorman, 60, is chairman, chief executive officer and president of Norfolk Southern Corporation, one of the nation's premier transportation companies. A 23-year veteran of Norfolk Southern, Moorman has served in numerous executive capacities, including senior vice president of Corporate Planning and Services, senior vice president of Corporate Services, and president of Thoroughbred Technology and Telecommunications, Inc., a subsidiary of Norfolk Southern.
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- Chevron Corporation (NYSE: CVX) announced that its Australian subsidiaries have signed a non-binding Heads of Agreement (HOA) with Chubu Electric Power Company Incorporated (Chubu) for the delivery of liquefied natural gas (LNG) from the Chevron-operated Wheatstone natural gas project in Australia. Under the agreement, Chevron, together with Apache Energy and KUFPEC, is expected to deliver 1 million tons per annum (MTPA) of LNG to Chubu for up to 20 years. Joe Geagea, president, Chevron Gas and Midstream, said this agreement further strengthened the company's relationship with Chubu, which is also a foundation customer and participant in the Gorgon Project.
• Business/Finance news:
- Chevron Corporation (NYSE: CVX) reported in its interim update that earnings for the first quarter 2012 are expected to be higher than fourth quarter 2011. Upstream results are projected to improve between sequential quarters, benefiting from higher crude oil prices and lower operating expenses, partly offset by lower liftings. Downstream earnings in the first quarter are also expected to be higher, reflecting improved refining and chemicals margins, lower operating expenses, and gains on asset sales. Foreign exchange losses in the first quarter are expected to be higher than fourth quarter losses, most notably in the upstream segment.
- The Board of Directors of Chevron Corporation (NYSE: CVX) declared a quarterly dividend of ninety cents ($0.90) per share, payable June 11, 2012, to holders of common stock as shown on the transfer records of the Corporation at the close of business on May 18, 2012. The amount represents an 11.1 percent increase in the company's quarterly dividend.
- Chevron Corporation (NYSE: CVX) reported earnings of $6.5 billion ($3.27 per share – diluted) for the first quarter 2012, compared with $6.2 billion ($3.09 per share – diluted) in the 2011 first quarter.·
- Chevron missed first-quarter profit and sales estimates as falling production blunted the impact of surging oil prices. Net income rose 4.2 percent to $6.47 billion, or $3.27 a share, from $6.21 billion, or $3.09 a share, a year earlier, the company said. Sales rose 0.8 percent to $58.9 billion, 7.8 percent lower than the average of three analysts’ estimates compiled by Bloomberg. Stock in Chevron, which is based in San Ramon, Calif., fell 2 cents, or 0.02 percent, to $106.20 a share.
- Chevron Corp. saw a first-quarter profit rise of 4.2% to $6.47 billion, or $3.27 per share. That compared with $6.21 billion, or $3.09 per share, a year earlier. Sales for the world's third-largest publicly traded oil company were up just slightly to $60.71 billion, compared with $60.34 billion in the first quarter last year. San Ramon, Calif.-based Chevron substantially increased capital and exploratory spending to $6.42 billion, up from $5.05 billion a year earlier. Chevron oil and gas production declined to 2.63 million barrels per day in the first quarter, compared with 2.76 million barrels a day during the same period a year ago. The company's earnings were hurt by a sharp year-to-year decline in natural gas prices, but the decline and collapsing natural gas prices were more than offset by sharply higher oil prices. The company’s average sales price per barrel of crude oil and natural gas liquids was $102 in the first quarter of 2012, up from $89 a year ago.