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As reported by Reuters, Chevron Corp posted earnings that were much lower than expected as maintenance exacerbated a decline this year in oil and natural gas production. Third-quarter production fell to 2.52 million barrels of oil equivalent per day from 2.60 million bpd a year earlier. With a fourth-quarter bounce expected, Chevron expected 2012 production to average about 2.6 million bpd, or 97% of its original 2.68 million bpd target.
Increasing output from the wellhead is a struggle for many big oil companies, including Exxon Mobil (XOM) and Royal Dutch Shell (RDS.A). With oil and gas assets tightly controlled by the countries where they are located, the majors are left to drill in pricier areas on land and offshore. For Chevron, the third quarter was marred by a huge fire at its Richmond refinery in California that damaged the crude unit there and now expected to be repaired in the first quarter. However, the company said this had a limited impact on third-quarter earnings, which were hit hard by weak marketing margins. Overall, third-quarter net income fell to $5.25 billion, or $2.69 per share, from $7.83 billion, or $3.92 per share, a year earlier.
Earnings dropped 17% to $5.1 billion in the oil and gas production business and plunged 65% to $689 million in the refining, or downstream, operation. The reported profit included about $600 million from an asset sale gain, offset by a negative foreign exchange impact. Leaving out certain items, Chevron earned $2.55 per share, compared with the analysts' average estimate of $2.83.
Chevron (CVX : NYSE : US$108.37), Net Change: -3.09, % Change: -2.77%, Volume: 8,322,686