Chevron Production Heads for 8-Year Low as Profit Falls

Chevron Corp. is on track to post its lowest first-quarter production in eight years after bad weather disrupted operations in Central Asia and North America.

The world’s third-largest energy company by market value also signaled that profit for the first three months of the year was the lowest since late 2010, according to a statement today. Chevron, which is overseeing the $54 billion Gorgon natural gas export project in Australia, cited currency fluctuations and the falling value of some assets for the decline.

Chevron said it pumped the equivalent of 2.579 million barrels of oil a day during January and February. If output persisted at that pace through March, production for the full quarter would have been the lowest for that time of year since 2006.

Chevron is scheduled to disclose results for the entire three-month period on May 2.

Before today’s statement, the company was expected to report full-quarter output of 2.61 million barrels, based on the average of three analysts’ estimates compiled by Bloomberg. That compares with 2.645 million in the first three months of 2013.

Chevron is accelerating oil exploration from Argentina to China to add reserves and revive output. Chairman and Chief Executive Officer John Watson is spending almost $40 billion this year to find, extract, transport and process oil and gas. Watson’s strategy also calls for auctioning off $10 billion in oilfields and other assets to hone the San Ramon, California-based company’s focus on the highest-profit projects.

Shares Fall

The statement was released after the close of regular trading in New York, where the shares fell 0.7 percent to $118.22 at 5:48 p.m.

Chevron declined 4.7 percent this year through the close today, after advancing 16 percent in 2013. In March, Watson cut the company’s long-term production target by 6.1 percent to the equivalent of 3.1 million barrels a day in 2017.

The company’s output fell for a third consecutive year in 2013, the longest streak of declines since the 2001-2004 period, according to data compiled by Bloomberg.

Exxon Mobil Corp. is the biggest energy company by market value, followed by Royal Dutch Shell Plc.

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