Chevron Corp Books Worst Loss Since 1989 as Oil Prices Crash
EghtesadOnline: Chevron Corporation reported on Friday a net loss of $8.3 billion for the second quarter on the back of impairment charges due to lower commodity price outlook and write-off its Venezuela operations due to the US sanctions.
Chevron’s $8.3-billion net loss for Q2 compares with earnings of $4.3 billion for the second quarter of 2019, and was the worst loss for the US supermajor since at least 1989, according to Bloomberg estimates.
The net loss includes impairments and other net charges of $1.8 billion, mostly associated with downward revisions to Chevron’s commodity price outlook, which the company made in view of the demand collapse and uncertainties over the economic recovery. Chevron follows the European majors in booking impairment charges after revising down its outlook for oil and gas prices.
Apart from the impairments due to revised price assumptions, Chevron also fully impaired its $2.6 billion investment in Venezuela because of uncertainties over the current operating environment and overall outlook. Another $780 million charge came from several accruals as Chevron plans to cut 13%, or around 6,000 jobs, of its workforce.
Without the impairment charges, Chevron posted an adjusted loss of $3 billion, or a loss of $1.59 per share, for Q2 2020, compared to adjusted earnings of $3.4 billion for Q2 2019. It also warned that the bad financial results could drag on into this quarter.