Chevron reports 2016 loss of $500m on militancy in Niger Delta

American energy giant Chevron has reported a full-year 2016 loss of $497million, contrasting with 2015 earnings of $4.6bn.

The company reported a second quarter 2016 loss of $1.47bn in July and reported earnings for four months ending December of $415millon, that way reversing the year-ago loss of $588mn missed forecasted earnings.

Production in Nigeria shrank by one-sixth because of the impact of militant attacks on pipelines and infrastructure.

“Our 2016 earnings reflect the low oil and gas prices we saw during the year,” said John Watson, CEO on January 27 when the results were released.

He further said, “We responded aggressively to those conditions, cutting capital and operating expenses by $14bn.

“We are well positioned to improve earnings and be cash flow balanced in 2017 through continued tight spending and cost control and additional revenue from expected production growth.”

The company said in a release that production increases from major capital projects and base business were offset by normal field declines, the impact of asset sales, production entitlement effects in several locations and the effects of civil unrest in Nigeria.

The energy giant’s average sales price per barrel of crude oil and natural gas liquids was $40 in the quarter, up from $35 a year ago. The average sales price of natural gas was $1.98 per thousand cubic feet, compared with $1.54 in last year’s quarter.

However, the company’s downstream earnings plunged 65 percent from the year-ago period to $357 million, reflecting lower margins on refined product sales and higher tax items.

Attacks on Chevron’s facilities in the Niger Delta were frequent last year and one of the most devastating was one on the company’s Okan facility in May 2016, which shut-in about y 35,000 barrels per day of Chevron’s net crude oil production in Nigeria according to a Chevron Nigeria Limited statement.

ISAAC ANYAOGU