Reports related to this article:
Project(s): View 9 related projects in PECWeb
Plant(s): View 4 related plants in PECWeb
en
Researched by Industrial Info Resources (Sugar Land, Texas)--Chevron Corporation (NYSE:CVX) (San Ramon, California) has fared better than most oil and gas giants during the COVID-19 pandemic. The company managed to enjoy an operating profit from its production and refining operations in third-quarter 2020, despite a net loss of $207 million--which was a sight better than its $8.27 billion lost in the second quarter. Although the company acknowledges production is likely to stay relatively low for a while, it is seeing some improvement in its project executions. Industrial Info is tracking more than $51 billion in active Chevron projects worldwide, including nearly $13 billion worth in the U.S. and Canada that are under construction or set to begin construction before the end of first-quarter 2021.
Click on the image at right for a breakdown of active Chevron projects in the U.S. and Chevron, by project type.
A major factor in the operating profits was the company's decision to slash its third-quarter global capital-spending plan to $2.6 billion, which was nearly half its total in third-quarter 2019. "We've been focused on what we can control: safe and reliable operations, cost management and value-chain optimization," said Mark Nelson, Chevron's executive vice president for Upstream, in a recent quarterly earnings-related conference call. "In the third quarter, our financial results improved due to strong performance in these areas, along with some margin improvement in polyethylene and West Coast fuels."
Two of Chevron's largest chemical facilities along the Texas Gulf Coast are set for key overhauls to major units in first-quarter 2021. Degassing projects on a pair of polyethylene units at a plant in Sweeney are designed to reduce emissions through the addition of thermal oxidizers, while compounding Line H at a polypropylene plant in Orange is preparing for a rebuild of its extruder. Both projects have faced months of delays, although not necessarily related to COVID-19, and are now expected to wrap up by the end of March. For more information, see Industrial Info's reports on the degassing and Line H projects.
Chevron's massive Cedar Bayou complex in Baytown, Texas, is preparing for a series of major maintenance-related projects in 2021, some of which have been affected by COVID-19 precautions: a linear low-density polyethylene (LLDPE) production area, which comprises three production lines, is set to begin a turnaround in the first quarter that will run into the fourth quarter; a polyalphaolefins production unit, which is set for the spring, but is being re-evaluated due to pandemic; and a low-density polyethylene (LDPE) production area, which comprises three production lines and was set to begin back in September, but was pushed back to first-quarter 2021. For more information, see Industrial Info's reports on the LLDPE, polyalphaolefins and LDPE projects.
Still, COVID-19 delays haven't prevented Chevron from eventually finishing some of its biggest domestic projects. In conjunction with Saddle Butte Pipeline LLC (Durango, Colorado), Chevron wrapped up construction on the $65 million Highland Flats Crude Oil Terminal in Rolling Hills, Wyoming, earlier this year. The terminal comprises three storage tanks with a total capacity of 460,000 barrels, and three mainline pumps that will transport crude oil from Saddle Butte's Powder Flats Pipeline, now under construction, to the Sinclair Casper Refinery in Casper, Wyoming. It faced a minor delay in scheduling due to the pandemic, but largely stayed on track. For more information, see Industrial Info's project report.
At least one big-ticket Chevron project has developed at a faster pace than anticipated: the Jack/St. Malo exploration project in the Gulf of Mexico, where the company is drilling five wells, including two for production and three for water injection; installing subsea infrastructure, including wellheads, injection and production flowlines and control umbilicals; and modifying the existing platform to include a water-injection module. The drilling and water-injection phase had been set to kick off in September, but instead began in June; it is now set to wrap up in March, nine months ahead of the previously estimated completion date. Modifications to the platform's topsides also began ahead of schedule.
Chevron believes these additions will add 175 million barrels of oil-equivalent to production, bringing the total output to roughly 675 million barrels of oil-equivalent over about 30 years. For more information, see Industrial Info's project reports on the wells, subsea infrastructure and topsides modifications.
But the bigger challenges remain: The COVID-19 pandemic kept commodity prices low and pushed Chevron to sell off some of its assets, driving third-quarter oil and gas production down 2.83 million barrels of oil-equivalent per day, a 7% drop from the same period last year. In particular, output from the Permian Basin dipped from 565,000 to 550,000 barrels of oil-equivalent per day; Chevron expects to keep output from the Permian at such levels until the global economy recovers.
Chevron's capital expenditures for 2021 have been reduced to about $14 billion, from 2020's roughly $15 billion. For more information on the Chevron's third-quarter ups and downs, see November 4, 2020, article - Oil Patch Still Battered by Low Prices, Weak Demand.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Click on the image at right for a breakdown of active Chevron projects in the U.S. and Chevron, by project type.A major factor in the operating profits was the company's decision to slash its third-quarter global capital-spending plan to $2.6 billion, which was nearly half its total in third-quarter 2019. "We've been focused on what we can control: safe and reliable operations, cost management and value-chain optimization," said Mark Nelson, Chevron's executive vice president for Upstream, in a recent quarterly earnings-related conference call. "In the third quarter, our financial results improved due to strong performance in these areas, along with some margin improvement in polyethylene and West Coast fuels."
Two of Chevron's largest chemical facilities along the Texas Gulf Coast are set for key overhauls to major units in first-quarter 2021. Degassing projects on a pair of polyethylene units at a plant in Sweeney are designed to reduce emissions through the addition of thermal oxidizers, while compounding Line H at a polypropylene plant in Orange is preparing for a rebuild of its extruder. Both projects have faced months of delays, although not necessarily related to COVID-19, and are now expected to wrap up by the end of March. For more information, see Industrial Info's reports on the degassing and Line H projects.
Chevron's massive Cedar Bayou complex in Baytown, Texas, is preparing for a series of major maintenance-related projects in 2021, some of which have been affected by COVID-19 precautions: a linear low-density polyethylene (LLDPE) production area, which comprises three production lines, is set to begin a turnaround in the first quarter that will run into the fourth quarter; a polyalphaolefins production unit, which is set for the spring, but is being re-evaluated due to pandemic; and a low-density polyethylene (LDPE) production area, which comprises three production lines and was set to begin back in September, but was pushed back to first-quarter 2021. For more information, see Industrial Info's reports on the LLDPE, polyalphaolefins and LDPE projects.
Still, COVID-19 delays haven't prevented Chevron from eventually finishing some of its biggest domestic projects. In conjunction with Saddle Butte Pipeline LLC (Durango, Colorado), Chevron wrapped up construction on the $65 million Highland Flats Crude Oil Terminal in Rolling Hills, Wyoming, earlier this year. The terminal comprises three storage tanks with a total capacity of 460,000 barrels, and three mainline pumps that will transport crude oil from Saddle Butte's Powder Flats Pipeline, now under construction, to the Sinclair Casper Refinery in Casper, Wyoming. It faced a minor delay in scheduling due to the pandemic, but largely stayed on track. For more information, see Industrial Info's project report.
At least one big-ticket Chevron project has developed at a faster pace than anticipated: the Jack/St. Malo exploration project in the Gulf of Mexico, where the company is drilling five wells, including two for production and three for water injection; installing subsea infrastructure, including wellheads, injection and production flowlines and control umbilicals; and modifying the existing platform to include a water-injection module. The drilling and water-injection phase had been set to kick off in September, but instead began in June; it is now set to wrap up in March, nine months ahead of the previously estimated completion date. Modifications to the platform's topsides also began ahead of schedule.
Chevron believes these additions will add 175 million barrels of oil-equivalent to production, bringing the total output to roughly 675 million barrels of oil-equivalent over about 30 years. For more information, see Industrial Info's project reports on the wells, subsea infrastructure and topsides modifications.
But the bigger challenges remain: The COVID-19 pandemic kept commodity prices low and pushed Chevron to sell off some of its assets, driving third-quarter oil and gas production down 2.83 million barrels of oil-equivalent per day, a 7% drop from the same period last year. In particular, output from the Permian Basin dipped from 565,000 to 550,000 barrels of oil-equivalent per day; Chevron expects to keep output from the Permian at such levels until the global economy recovers.
Chevron's capital expenditures for 2021 have been reduced to about $14 billion, from 2020's roughly $15 billion. For more information on the Chevron's third-quarter ups and downs, see November 4, 2020, article - Oil Patch Still Battered by Low Prices, Weak Demand.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
