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Released November 02, 2015 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Struck by the plunge in upstream oil & gas production earnings, energy giants Chevron Corporation (NYSE:CVX) (San Ramon, California) and Exxon Mobil Corporation (NYSE:XOM) (Houston, Texas) are making massive cuts in their capital expense budgets. Industrial Info is tracking and 181 active Chevron projects worth $123.37 billion, and 224 active Exxon Mobil projects worth $65.20 billion (USD).
Meanwhile, midstream, refining and petrochemicals company Phillips 66 (NYSE:PSX) (Houston) also plans to reduce its capital expenditures next year, but its earnings picture looks far sunnier. Industrial Info is tracking 91 active Phillips 66 projects worth $4.02 billion.
No Joy at Chevron
Stung by 63.5% reduction in third-quarter 2015 earnings, Chevron announced Friday it is cutting its 2016 capital and exploratory expenditure budget by 25% from this year's level and anticipates lowering its work force by between 6,000 and 7,000 employees. Chief Executive Officer John Watson said he expects capital and exploratory expenditures for 2016 to run between $25 billion and $28 billion.
"We expect further reductions in spending for 2017 and 2018, to the $20 [billion] to $24 billion range, depending on business conditions at the time," Watson said in the company's earnings release.
Chevron has majority ownership of the $29.7 billion Wheatstone liquefied natural gas (LNG) plant joint venture, located in Onslow, Western Australia. The grassroot project will have an initial production capacity of 8.9 million metric tonnes per year, with expectations the amount eventually will grow to more than 25 million metric tonnes per year. Phase I of the project is expected to be completed in fourth-quarter 2016.
Third-quarter 2015 earnings for Chevron were $2 billion, down from $5.6 billion a year earlier. The company was slammed by its upstream results, where earnings fell to $59 million from $4.6 billion a year earlier. Downstream earnings, however, grew to $2.2 billion from $1.4 billion a year earlier. Total revenue fell to $34.3 billion in the third quarter from $54.7 billion a year earlier.
Singing the Upstream Blues
Things didn't sound much--if any--better at Exxon Mobil, where third-quarter earnings totaled $4.2 billion, down 47% from $8 billion in the same quarter of 2014. Upstream earnings dropped like a stone to $1.4 billion, from $5.1 billion a year earlier. However, downstream earnings nearly doubled due to stronger refining margins.
Vice President-Investor Relations Jeffrey Woodbury said the company had achieved a net reduction of $8 billion in capital and cash operating costs so far this year. "And I'll note that this amount is in addition to the $4.5 billion decrease in planned 2015 capex relative to 2014 spend," he said during the company's earnings conference call.
Third-quarter capital and exploration expenditures were $7.7 billion, down 22% from a year earlier.
Industrial Info is tracking Exxon Mobil's $8 billion LNG liquefaction plant project at Prince Rupert, British Columbia. The plant will consist of two trains to produce 12 million metric tonnes per year of LNG. Construction kickoff is set for early 2017, with completion in first-quarter 2019.
Midstream, Downstream Goodness for Phillips 66
Phillips 66 reported third-quarter earnings of $1.58 billion, up considerably from $1.01 billion in third-quarter 2014. The much stronger results were driven by the Refining and Marketing segments, said Chief Executive Officer Greg Garland. The company's capital budget for 2016 is $3.88 billion, compared with $4.6 billion in 2015.
Industrial Info is tracking Phillips 66's $1 billion grassroot liquefied petroleum gas production facility and export terminal project, located near Freeport, Texas. The terminal is expected to have an export capacity of 4.4 million barrels per month. Completion is set for mid-2016.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and ten 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.
Meanwhile, midstream, refining and petrochemicals company Phillips 66 (NYSE:PSX) (Houston) also plans to reduce its capital expenditures next year, but its earnings picture looks far sunnier. Industrial Info is tracking 91 active Phillips 66 projects worth $4.02 billion.
No Joy at Chevron
Stung by 63.5% reduction in third-quarter 2015 earnings, Chevron announced Friday it is cutting its 2016 capital and exploratory expenditure budget by 25% from this year's level and anticipates lowering its work force by between 6,000 and 7,000 employees. Chief Executive Officer John Watson said he expects capital and exploratory expenditures for 2016 to run between $25 billion and $28 billion.
"We expect further reductions in spending for 2017 and 2018, to the $20 [billion] to $24 billion range, depending on business conditions at the time," Watson said in the company's earnings release.
Chevron has majority ownership of the $29.7 billion Wheatstone liquefied natural gas (LNG) plant joint venture, located in Onslow, Western Australia. The grassroot project will have an initial production capacity of 8.9 million metric tonnes per year, with expectations the amount eventually will grow to more than 25 million metric tonnes per year. Phase I of the project is expected to be completed in fourth-quarter 2016.
Third-quarter 2015 earnings for Chevron were $2 billion, down from $5.6 billion a year earlier. The company was slammed by its upstream results, where earnings fell to $59 million from $4.6 billion a year earlier. Downstream earnings, however, grew to $2.2 billion from $1.4 billion a year earlier. Total revenue fell to $34.3 billion in the third quarter from $54.7 billion a year earlier.
Singing the Upstream Blues
Things didn't sound much--if any--better at Exxon Mobil, where third-quarter earnings totaled $4.2 billion, down 47% from $8 billion in the same quarter of 2014. Upstream earnings dropped like a stone to $1.4 billion, from $5.1 billion a year earlier. However, downstream earnings nearly doubled due to stronger refining margins.
Vice President-Investor Relations Jeffrey Woodbury said the company had achieved a net reduction of $8 billion in capital and cash operating costs so far this year. "And I'll note that this amount is in addition to the $4.5 billion decrease in planned 2015 capex relative to 2014 spend," he said during the company's earnings conference call.
Third-quarter capital and exploration expenditures were $7.7 billion, down 22% from a year earlier.
Industrial Info is tracking Exxon Mobil's $8 billion LNG liquefaction plant project at Prince Rupert, British Columbia. The plant will consist of two trains to produce 12 million metric tonnes per year of LNG. Construction kickoff is set for early 2017, with completion in first-quarter 2019.
Midstream, Downstream Goodness for Phillips 66
Phillips 66 reported third-quarter earnings of $1.58 billion, up considerably from $1.01 billion in third-quarter 2014. The much stronger results were driven by the Refining and Marketing segments, said Chief Executive Officer Greg Garland. The company's capital budget for 2016 is $3.88 billion, compared with $4.6 billion in 2015.
Industrial Info is tracking Phillips 66's $1 billion grassroot liquefied petroleum gas production facility and export terminal project, located near Freeport, Texas. The terminal is expected to have an export capacity of 4.4 million barrels per month. Completion is set for mid-2016.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and ten 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.
