Chevron Corp. reported earnings of $3.1 billion for second-quarter 2021, compared with a loss of $8.3 billion in second-quarter 2020. Included in the current quarter were remediation charges associated with previously sold assets of $120 million and pension settlement costs of $115 million. Foreign currency effects increased earnings by $43 million. Adjusted earnings of $3.3 billion in second-quarter 2021 were up from an adjusted loss of $2.9 billion in second quarter 2020. Sales and other operating revenues in second-quarter 2021 were $36 billion, compared with $16 billion in the year-ago period.
“Second-quarter earnings were strong, reflecting improved market conditions, combined with transformation benefits and merger synergies,” said Mike Wirth, Chevron’s chairman and chief executive officer.
“Our free cash flow was the highest in two years due to solid operational and financial performance and lower capital spending,” Wirth added. “We will resume share repurchases in the third quarter at an expected rate of $2-3 billion per year.”
Chevron’s worldwide net oil-equivalent production was 3.13 million b/d in second-quarter 2021, an increase of 5% from a year ago.
US upstream operations earned $1.4 billion in second-quarter 2021, compared with a loss of $2.1 billion a year earlier. The improvement was primarily due to higher crude oil realizations and the absence of second-quarter 2020 charges for special items including impairments, write-offs, and severance accruals. Higher crude oil production also contributed to the improvement between periods. US net oil-equivalent production of 1.14 million b/d in second-quarter 2021 was up 145,000 b/d from a year earlier. The increase was due to an additional 227,000 b/d of production following the Noble Energy acquisition and lower production curtailments, partially offset by a 68,000 b/d decrease related to the sale of Appalachian assets and lower production due to normal field declines.
International upstream operations earned $1.7 billion in second-quarter 2021, compared with a loss of $4 billion a year ago. The increase in earnings was primarily due to the absence of second-quarter 2020 special item charges and benefits including write-offs and impairments, severance charges, tax items, and gain on the sale of Azerbaijan assets as well as higher current-quarter crude oil realizations. Foreign currency effects had a favorable impact on earnings of $340 million between periods. Net oil-equivalent production of 1.99 million b/d in second-quarter 2021 decreased slightly from second-quarter 2020.
US downstream operations reported earnings of $776 million in second-quarter 2021, compared with a loss of $988 million a year earlier. The increase was mainly due to higher margins on refined product sales, higher earnings from the 50%-owned Chevron Phillips Chemical Co., higher sales volumes, and lower operating expenses, including the absence of second-quarter 2020 severance accruals.
US refinery crude oil input in second-quarter 2021 increased 65% to 956,000 b/d from the year-ago period, as the company increased refinery runs in response to higher demand and the improved refining margin environment. Refined product sales of 1.16 million b/d were up 40% from the year-ago period, mainly due to higher gasoline and jet fuel demand as travel restrictions associated with the COVID-19 pandemic eased.
International downstream operations reported earnings of $63 million in second-quarter 2021, compared with a loss of $22 million a year earlier. The increase in earnings was largely due to the absence of second-quarter 2020 severance accruals. Foreign currency effects had a favorable impact on earnings of $24 million between periods. Refinery crude oil input of 580,000 b/d in second-quarter 2021 decreased 2% from the year-ago period. Refined product sales of 1.28 million b/d in second-quarter 2021 increased 16% from the year-ago period, mainly due to higher gasoline, jet fuel, and diesel demand.
Capital and exploratory expenditures in the first 6 months of 2021 were $5.3 billion, compared with $7.7 billion in 2020. The amounts included $1.5 billion in 2021 and $2.3 billion in 2020 for the company’s share of expenditures by affiliates, which did not require cash outlays by the company. Expenditures for upstream represented 84% of the company-wide total in 2021.