Chevron (CVX) 30 Oct 202020 Q3 Earnings call transcript

Company Profile

Participants

Wayne Borduin	General Manager, Investor Relations
Pierre Breber	Chief Financial Officer
Mark Nelson	Executive Vice President, Upstream
Neil Mehta	Goldman Sachs
Jeanine Wai	Barclays
Phil Gresh	JPMorgan
Devin McDermott	Morgan Stanley
Paul Cheng	Scotiabank
Doug Leggate	Bank of America
Paul Sankey	Sankey Research
Biraj Borkhataria	Royal Bank of Canada
Roger Read	Wells Fargo
Sam Margolin	Wolfe Research
Manav Gupta	Credit Suisse
Jason Gabelman	Cowen
Pavel Molchanov	Raymond James
Neil Dingman	Trust Securities

Call transcript

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Operator

Good morning, my name is Audra and I will be your conference facilitator today. Welcome to Chevron's Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' remarks, there will be a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded. the Relations over of turn Manager the now Investor of Chevron will conference to call General I Corporation, Mr. Borduin. Wayne ahead, go sir. Please

Wayne Borduin

Thank on EVP Borduin, We'll slides Chevron's and you, call Breber, with Relations to CFO. Earnings are the Chevron's and Audra. Call Mark that Chemicals; today Conference Pierre Nelson, and Third on the Webcast. Downstream Manager are refer General Quarter Wayne website. to me available of of Investor I'm Welcome and

this that cautionary reminded contains be X. please started, get statements. the we and projections review forward-looking statement presentation other Before estimates, Slide Please on

Now, to turn I'll it over Pierre.

Pierre Breber

Wayne. Thanks,

a presentation. Third-quarter market items including million, from tied items quarter. tax the Rokan conditions. Free earnings and billion last totaled almost settlement to can of charge retirement improved of sharing $X the cash a contract on challenging agreement the funding related reconciliation this continued with measures non-GAAP reflecting last the August Special were Indonesia. was A in flat breakeven, in be was $XXX production quarter, about next to found other asset but flow dividend to exploration appendix and

quarter, a from to X. Turning commodity this increased operations the settlement flow agreement. their Rokan the $XXX was included second lows improved Cash prices quarter million cash in added as from to Slide payment

peer protecting ongoing strength leading with value, balance strong Our this acquisition our group. debt up cash the net fair below debt maintain stepping our its crisis. cost the improved and capital flow XX% and expect the Even a the and among to during dividend over breakeven performance operating we our committed quarter We're was We under to $XX Noble after closing financial Brent, ratio to downstream due competitors. well sheet management. of to ended

XXXX is our guidance. latest spending below Turning capital slide, trending our next to the

guidance from well $XX to five-year our the from guidance Day. expect Noble ahead and and budget we capital Investor year's below billion Chevron Looking be below next Chevron's XXXX combined March

XXXX the were budget in will to prioritize from lower in including continue than it drive approval. December, shows flexibility more investments our details capital quarterly our share than average, added formal XXXX capital quarter of ahead after portfolio that expenditures and Operating additional We'll recently guidance. the Our XX% in Noble. long-term our value assets

Turning lower due to margins. Slide to relative period expenses. and decreased earnings last quarter lower and reduced and operating upstream X, earnings liftings decreased by to sales realizations third volumes to due same lower Adjusted the primarily partially downstream due to adjusted offset depreciation primarily curtailments year,

charges. due segment other was higher, The various to primarily corporate

to Adjusted items. increased second Turning billion $X Slide about downstream realizations. third earnings CPChem. due upstream in up of timing sales by liquids lower quarter, second were to earnings earnings quarter's half X, at billion to Adjusted effects adjustments to due almost over favorable swings and primarily compared $X higher volumes the more higher due primarily cost both $X billion, to than market quarter increased inventory absence to the margins by special and and

to a accruals compensation. due favorable decreased for other The swing primarily segment charges in stock-based

excluding quarter to production ago. oil third production, asset year X% Turning a was than equivalent lower sales

with entitlement The reductions curtailments sales months, and in and mostly and turnarounds. asset in reflect higher offset our Africa market-driven a OPEC production past and of and range closed effects pre-pandemic. curtailments Increased the all signed plus guidance by Permian constraints we During number in primarily higher Thailand. were XX line Kazakhstan were

Mark. turn I'll it over Now, to

Mark Nelson

Pierre. Thanks,

and demand picture pandemic, petrochemicals, been modestly channels. new resilient has demand the develop jet the operating X, and and jet customer in due averages. improvement margins resulted during they've results areas more reliable like able well Slide optimization. the can second cyclical only we've products cost on performance in control. Safe weak lows management in focused challenged we've to has polyethylene and chain environment strong margin on the with what these Coast operations, shown is improved but along financial we quarter, some it's in in As in the Conversely product quarter, improved the from our started, crisis still West value recovered, Since diesel been been below In third the to fuels.

slide. next the to Turning

focus delivering Our results. on is cost management

have the expenses operating Streamlining processes, this challenge. levels quarter quarter. environment. lower how costs, in third our a The levels XX% proud adapting and first contractor pre-pandemic work lower-margin nearly reducing employees than risen of I'm activity to are to

ready XXXX of than the have XX% our on be is differing is reduce positions This backlog back teams planned refinery levels. a further Optimization to also tremendous of economy expenses. only amount this the to pre-pandemic of a and without year's contributing to network cost the of planned when program, activity. lower work scope Our turnaround our activities, delivered more accomplishment operating minor a

Turning to next slide. the

value reliable operations, economic began, delivering employees sales our safe, giving our volatility the for our this Australia, products. returns. margins world and the margin our marketing and regions, of price high-value best things products slowdown the safe labor that in on The our opportunities the part that are needs than balanced channels products our those across utilization XX% Coast efficient in chains extends to US acquisitions us all refinery sales to of highest in generates the improve into more focused demand, and the Refinery we're contracted chains. in Since operate. our keeping We recent value always, Gulf we of in further consistently more As despite Pasadena profitability license assets channels the with

cracker. continues feed progress chemicals, on mixed good to Caltex to make new their GS Turning

months We schedule. to ahead of expect be budget project the under and

job, safely it market the Our project as At feed and Coast progressing have COVID-XX. Gulf has cracker the despite we've a hold conditions. US placed remarkable team of our done at local challenges we project on completed CPChem, II assess

the new first be waste it in world-scale innovative supported At facilities States. finding is to importance our access investment low price with circular We scale, continue the of economics to feedstock. cost that of any long-term to to our project began returns through strong same fundamentals believe CPChem and of underscores needs time, by commitment milestone, industry will in plastic generate the to production United the cycle. chemicals deliver at Also, important an ways from to sustainable customers. an The producing PE products polyethylene the

to renewable Recently, renewable venture our turning a gas is Now carbon in at we're energy lower customers. natural to gas our and more future alternative announced CalBio joint with fuels. The products first of Brightmark. California delivering we partnership new and

This in biodiesels day biofeed Southern infrastructure are XXX over next expected diesel, The Texas. sale we plant renewable hydrogen our range our RNG South in expansion our at to we is million. we is and to barrel And In announced in Segundo Refinery. and is at technology testing the El Novvi, future developing, first Also, RXX year. committed California. of the co-process $XXX the Through half site of capital ventures in opened. Korea potential. start-up production recently Our a with a Caltex sustainable piloting innovative leveraging are existing sell GS oil branded partnership base of first renewable leading lastly, of products has

convergence customers and The Seoul electricity. of where well first kind fuels as traditional in its as hydrogen

energy efforts renewables we're now these of transition further support Part Pierre discuss. with our will align of to increasing which in our business. how All the of approach

Pierre Breber

Mark. Thanks,

progress good focus make to continue our in energy areas. transition We

find Abatement expect across of helps MACC most identified we Cost projects operations. efficient $XXX The million year to intensity to to the Curve. with reduce Next our tool projects our select Marginal cost carbon

Brightmark, venture joint noted, we gas a with natural announced Mark extending new As portfolio. our renewable

environment a DOE is in Finally, in our with These a fund Svante, good in to Chevron's up the grant capture good and demonstration for to XXXX. US projects project have our The reflect to California to operations. start carbon help awarded our both are expected commitment solutions low partnership that for we're carbon construction been upstream shareholders. of pleased plant the

well the slide, like operational we revolver the and quarter, this early wins and off Noble selections next Med. at month, earlier acquisition pleased integration positive to Chevron. its some to due is employees to In track. cash primarily opportunities it's capital welcome assets management Noble and add the completed free cost Noble third quick Eastern closed selling on plane to paying ongoing the on talented We're of and and assessment and Turning in employee sales its We've way. is generated the flow strong Energy

how Our launched This the Xst. year complete transformation with was an leveraging mostly empowered modernizes the teams. tools work, largest internal last digital effort, we place late in Texaco is that new merger November, change since our and enterprise-wide organization

sell business. natural recently Appalachia we our an signed agreement Lastly, to gas

We the transaction the expect before close to of end year. the

downtime to be are seasonal fourth RioCan quarter, we the we have last Noble barrels in well than may cost Curtailments primarily commissioning and lower Med. and the quarter planned additional forward, the include repairs looking X this settlement. lower, in Train Eastern due At demands production recovery Now both quarter. to Production to LNG complete are Gorgon for now related production. preparation in expect started

over year Train near Train end XX,XXX. increased project With the we cash online. turn this to a modules expect Kazakhstan, All At completed expect plans successfully the schedule. We finally is out project payments after Earlier continues. now sealift milestone. Wayne. severance the flow. to to team on X of I'll service over to remobilization are we to taken We with workforce X back TCO, our are And week, be in it XX,XXX final significant project our lower that, and

Wayne Borduin

questions. prepared to Thanks, now ready have remarks. that do your concludes mind queue. Keep Pierre. take we That We're a our full in

do to open get limit yourself We'll your lines. So try Audra, to one please best answered. question one all our the and follow-up. of to please questions

Operator

Instructions] Neil We'll to at Mehta Goldman [Operator you. Thank first Sachs. go

Neil Mehta

Mark quarters downstream expectations. and surprise there upstream call have third would is that business? of relative about and the big your many downstream had to and out the it for here third one the morning. Was question. and of anything independent on quarter, results that back refiners Good step tough that then Maybe, question including you picture our as looks just very turn like the on you I in the one downstream which sector West question, outlook talk particularly here can a refining your refining Coast, in part

Mark Nelson

Thanks for the Neil. question,

the downstream margins. refining in at general, would say performance, management contribution is was the Yes, not efforts our in back if pace operationally the and from also loans. focused say Coast our much chemicals a think improvement manufacturing sustainable First, cost of has clearly polyethylene in and lubricants then at actually West margin look overall, of margin I continued across I fuels There that retested our sector, I operationally which quarter by shock first portfolio, if and additives driven I third is refining would recovery. some that sector for look it demand to required, are have I Three the improved analog and pre-pandemic the and business. real step back step things

demand X% of the products only an materials, as diesel that recovery we're XXXX. indicated XX% levels, is of half high-value we XXXX First, to our for in industry but motor certainly within gasoline, still all jet

So there. we need continued recovery

a and in Asia, Australia see for going we're you're that parts reduction is for refinery part competitors demand and And we've certainly to forward which Coast, decade inventory and supply world of need over about beginning of we Second, the Neil. tightens now US Southeast start as the people regions hearing we're that the different opportunity rationalized to question, over do the the world. talk and the balance this us some the seeing like that's some because time. an Thanks interesting of our finally, creates portfolio past rationalization, of rationalization in us bit the for and

Neil Mehta

it's we Gorgon. Mark. Thanks, and Pierre on of you, stand the what with in X terms and X do And managing we there? about do downtime Train Thanks. follow-up Train then, Where X for Train a know

Pierre Breber

Yes. Thanks, Neil.

verify the testing. well said with completed We the non-destructive I complete. also of We've As pressure them repairs testing cattle. are

process So online. getting we're now in the back of

recommissioning So and down. are dry begin then process extended systems to the cool turnaround next The we've we'll started from the turnaround. steps out the and the

of production in weeks, We to second several put half take LNG November. the expect will which first this

on that down. down would taking look after depending be then will And Train In X Train said, are X we long then or terms that X Train one. whether determine as that of online. we X, and to required we sequentially, is expect repairs to inspect Train would And how then after I Train is not soon back X

Neil Mehta

guys. Thanks, Okay.

Operator

Barclays. move We'll next Jeanine at Wai to

Jeanine Wai

thanks everyone, question My morning good first Hi, my questions. for on... taking is

Pierre Breber

morning, Good Jeanine.

Jeanine Wai

question first is the is My morning. the upstream CapEx second sustaining on Good Eastern with Med. on and one

capital upstream multi-year So that's XXXX the $XX run second half billion. sustaining rate estimate below CapEx of your

with year reductions this and cost a accomplished efficiency You've lot improvements.

no few So the to that you update a my number there we've got mix quarters capital whether first I billion question is know ago too. provided and sustaining $XX is an that now in on

Pierre Breber

No, there estimate, equivalent how for be economy on normal for number right. Chevron is not sustain the out an trying an again that's short and just To I pre-pandemic an mean our talked term. Noble products Jeanine. levels billion Thanks, in production. really to in only clear, is the pandemic production term around based that. $XX markets. short and we isn't. therefore we're gave million demand $XXX to in It's about, we're oversupplied sustain below impacted by levels have Mark our,

value sustain long-term enterprise. of the We to are trying the

all higher so not short-term includes the XXXX upstream look you it production. XX if So billion, to going to level, capital it our sustaining an more -- around of but or guidance of of is billion than $XX capital

is it so we're to improvements update going Noble. updating true at in no through, our to on there frequently. long-term this but that's that But those estimate real going and production. estimate of precise as is not be production Some analytical long-term sustaining numbers. so short-term Tengiz, we're are to project combination focused value, not an is like rolling it Efficiency That's with

Jeanine Wai

think dynamics on lot do you. one be to in helpful. medium-term Thank enough monetize and the demand discovered in to avoid great. guess of is or provide there area, guess or in or Europe strong you regional any is indications second any Eastern Okay, on the a how could Leviathan the either LNG headlines Understood. the thoughts resource question Thank greenfield My longer-term a the initial and to pricing I the I expect you pipeline be you. on other there, you specifically, that a there more could commentary that if then would Med, growth on

Pierre Breber

joining and those and on all our We've good. the United included, to track. comment welcoming very have customers. Chevron. our smooth headlines the who private some Employee Med on very a our had won't you've in happened, is feel top in the are we are of with commercial in us Med I operations with that the Noble pleased people quality so Hey, integration partners the already We're with discuss read, States matters them Eastern selections pleased in and really are assets, across we'll with Noble transition we're employees be Eastern our to

where backing a it's As good free and you is project At completed. flow but been demand It's positive, particular few the cash been resource. know, it's has in there outcall, a only an opportunities area weeks.

that So right will the work to we're to determine but generation. with operations customers efficient with again future upside is Noble, that is integration find the free with flow to is there focus develop cash to a existing the it and again now way customers, smooth have potential all-in-time. most market, resource. going There our and cost We're customers, to pleased that

Wayne Borduin

Jeanine. Thanks,

Operator

We'll move next to Phil Gresh at JPMorgan.

Phil Gresh

morning. good hi, Yes,

capital your the if here. based is here, just at this about been that about us the plan quarter, lower how a the somewhere the side costs number $XX order and I you're given of completing price If you've underway look like further ability breakeven moving the was already. breakeven curious question it looks the barrel. to third in talking Brent kind that's the think so forward, And and I equation of given the cost First and operating of restructuring you here

Pierre Breber

breakeven business, it and has downstream It's they and those can and margins important doesn't of make recover pretty at other which Yes, other our addressed can or would mean price it's margins factor parts obviously it and little Mark $XX. bit a I vary, where breakeven we have looking below are in margins sector the holding, the again, again a in lowers that because chemical is, low and that all as the not on and breakeven they the assumptions. difference that just oil our it's

In costs more terms were look our of XX%. down than cost,

as guidance just expect Chevron you have if because provided we operating will be a on we at pandemic Noble other guidance manage to also through again our completed We've characterized activity But looked billion, fourth and we've we're the provided to that that quarter, and $X in. a we've actions that we the crisis Chevron-only will basis the related only, end quarter down and expenses. transformation. This we've here that taken year

launched OpEx now, talked of And the will and employee new transformation. that we about just that time are of have total synergies being about selections We've a is as talked restructuring, billion XX we that operating our notified they So for transformation, enterprise-wide from we $X Noble organization is our in an are which have months ago tough right X. all started expense. and it's $XXX November not and Noble synergies, the the we completing we've employees, finally, of reductions then place, million almost

get comparisons to management and So all but discipline, of dividend, will We've lower Day are rolling consistent and of consistent at we bring breakeven any all is both our that to which on so together for guidance, question, hard sustained our likely Investor to the is breakeven it's working capital our your we with preserve. make cost updated our that progress, through kind we're continue down. you through,

in That's in to essentially continue and these the strength balance Our of sheet what quarter we're with and times. ratio sheet challenging right the it we'll net doing leading we're debt do ending the industry, balance as XX%.

Phil Gresh

year-over-year rate it us call Obviously, whether high you're if a about would or not you could here, last any second pieces the provide talked number gave My Thank forma declining 'XX a Permian production. so standalone or didn't know on relates great. as read pro production, on in maybe number, obviously, I potentially CapEx in moving single-digit it. organic Okay, here, Noble hard you on the early maybe some be, 'XX just if question you it's an you. to around basis, XXXX layering

Pierre Breber

Yes, for That call the fourth we'll normally will the January. provide our guidance production quarter. we provide We fourth of end do. guidance quarter at be on as our did

So we a do quarter ahead.

into pieces drilling you've a to agreement I settlement the which think around add the uncertainty good for Rokan that to and which I managed keep ensures adds And had talked that's activity is that our the a XXXX, we which heading and PSC X% to of expiration, of hit little level. referred Jay I Again, I'll at is that about point out. agreement, there. so again in really a X% production abandonment activity some of August exploration, funding the if would contract be going decline but a efforts at to we those stay potential Permian,

our more really to say provide our you. it we'll I and So call. at fourth finalize time to approval guidance budget plans, We'll during do don't when formal our we regular get have capital earnings quarter the of that Phil

Phil Gresh

you. Okay, thank

Wayne Borduin

Thanks, Phil.

Operator

Devin move Stanley. Next, Morgan we'll to of McDermott

Devin McDermott

question. Hey, good morning. Thanks for taking the

Wayne Borduin

Hi, Devin.

Devin McDermott

Hey.

of of depth about cost you and exist where while the that of the is carbon any interesting cost So intention curve announcements post-XXXX wanted the there's latest one plan been thinking specifically marginal question on have investments of you here on some opportunities that some on and of some and your you down intensity. like potentially reduce months reducing can we around I returns the this longer-term? your first positive actually years over planning of and the just reductions how over negative already emissions the as cost, And of have you to I it think last is any the is momentum peers actually about also that few carbon you're sense nice next emissions done shows of emission made win-win in few Climate ask think The the opportunities think goals driving also then there this while to there. that abatement have boosting disclosure about as perhaps production Paris expanding longer-term, and here,

Pierre Breber

Sure.

agreement four the with we the was under have they intensity metrics, because so chosen those. you we're date to that's first XXXX said, and second On stocktake out as aligned go XXXX, question, carbon Paris the reduction

are then a We on do basis sector first the in on oil and do separately serve an only company company, many it do market. different an we company, because they operatorship metrics our equity only and gas to basis,

will So to that the referring it's that you're recurring. be $XXX is, million expect something we

and in So we if of a next invest and extend time, opportunities achieve now think, on the some cost-efficient be targets. we kind able -- carbon to us date, go for XXXX focused to But be for at but delivering what we're years answer of right to Paris will yes, reductions. stocktake logical to yes, point is that yes, expenditure we'll see number call it I the I because would on those

incentive We also pay part all Chevron have almost every those employee. as the of

in progress So earn Mark way that. I business really in They activities, do a we're lower carbon of future think, to and would a more making our where business. energy we all it referred good return. transition and his in on our number But sustainable a making support they

So natural different that also of And at about looking some new those generates stage we're the are Mark course obviously at gas returns. the of and then a of talking technologies maturity. then was renewable

that the in a our address carbon we're good that for it believe a that's and lowers shareholders. actions of does environment number way So good climate for taking we change, and

Devin McDermott

my sense. transaction. a And is that Right, question makes Noble lot then composition, portfolio the on of post the second

pruning job executed the recently over the portfolio you on a Appalachia assets sale, the in So of the non-core you're under kind good investing doing time.

non-core. And your what transaction of part this lastly, the vision. any is for further look outstanding on debt part not be part or forward Noble's or our as you that space like then here guaranteeing Noble Noble Midstream question things if we as portfolio and within of not could anything the whether might transaction, of whether As address features best opportunities the post thoughts updated

Pierre Breber

at the got Noble I the end? Okay, Devin, about sales, what debt asset question was the

Devin McDermott

guaranteed not Whether be or Chevron? by that will

Pierre Breber

you We're reviewing a next options, bondholders made me expect notify let we debt. and Noble that All should the again of address decision decision that we Noble couple -- in make just right, and months. when haven't will thanks. Well,

asset talked on are before and sales, a proceeds. we it XXXX tax billion program year of to about of XXXX, billion complete terms program that three the In $X we track to $XX was to

we close US that We our in sale right before of expect will natural complete when middle that the here and be gas to year-end range.

say, before, place terms competitors, commercial a months. many is network interest rationalization number we would the of just the Mark that and sales of most In Shelf what to done North just the else I right. last even but different of matter in the the referred the interest talked XX we're we've I is decade ownership in the our comment that significant completed we've and to and on, I public about selling that's in domain, our in West -- last we won't we've referred than asset on our over refining guess

with of we pre-pandemic You values. and a assets a sorry, good I all assets Obviously, comment portfolio. any saw just that production signed bunch on comes that of in specific the Noble bought that in where chart, at a, high-quality company our won't

value-driven. resource infrastructure becomes as you if and down of investment more like the Shelf, have assets comes it almost in behind to the think gas the an forward. held a year-end in we Also, are we're plant that West West of we Shelf here more up tolling this facility interest North close North and So post-pandemic world. very planning before our The better that going it's

portfolio. to long any disciplined would we of to big in Chevron our how rationalization to that's kind continue manage we'll the portfolio I management be to not us expect the part announcement, have program approach time. a you'll for ongoing have see So been us of

Devin McDermott

very you much. Thank

Operator

Scotiabank. go next Cheng We'll Paul of to

Paul Cheng

morning. Good you. Thank

Pierre Breber

Hi, Paul.

Paul Cheng

think XX the that? for Do capital the two, to other Mark like low and carbon what order or maybe is assume carbon initiative set [ph] be Yes, you one next So of Neil, need power a know net be up Pierre, would on that business one target will allocation the some is go renewable and at scoop peers least I about over one thank of you. point, Pierre. question. two, probably into, years. in achieve Two that's one in the for years, some zero we let's first questions, XX to new at reasonable your a you businesses future

The second is at the last couple question for of look over If Mark. I quarters.

may European you've mean your at a assets guys you at marketing? I And call your been asset. further down to your stronger the to want trading marketing marketing big boost historically, your center, performance they far P, that basis, differences past customers out Downstream have while in for you One guys selling you because peers both in rest comparing assets so results, the their think their are years. for operation. plus facilitation mainly the also do the you Europe, X% is between On XX that of and US took looking the [indiscernible] of around why of that the Chevron trading

for right you Thank fit that that or you. is don't approach is you. So think the you for

Pierre Breber

true and capital our saw the in seen with that's away curve start. our of in that's have of in you've we driven be marginal investments you've complete our true M&A, millions a going of Okay. as that and million in acquisitions, And transition. has our how No business, an talked seen the What open of conventional with gas. that's walked the again on when and Chevron collected dollar true natural billion from energy announce $XXX Noble acquisition we and we're to true is dollars, that cost, Paul, I I'll Anadarko and that's first you and, and in renewable termination disciplined to you announcement budget our capital, order business that think energy in transaction our Look, investments we now to be going fee. that organic the executed and about seen into conventional our that transition in checkbook true $XXX are million one hundreds it's that's there. true being

environment, really by believe So for climate address are reflect or what for opportunities good what again the we the limited we believe the that shareholders. are our and are good change investments

terms energy In in divest them carbon pretty business. change geared been not and to The important society do the making this diversify transition role that adopt businesses going around we've our taking think we're core we that from play actions I a that future. more in are clear strategy, need away or lower an we're are to of, these making businesses in sustainable good to

I you expect continue So to us do should that. think to

to again proposition that alternatives and We have future. we businesses in value we're do where where is we going are relative to advantage, competitive part a apartment going of in way for a to have other operate shareholders a lower advantage a that is that

So, go maybe on question. to the Mark downstream we'll

Mark Nelson

question, the for Thanks Paul.

On question, that we've consistently we chains. marketing strengthening our are in the indicated value interested

just own very that and XX and terminals in first where place essentially here and chain suggest our could fact, of in have value in the view third expected. working of say benefit example our added months would in chain higher production Australia the linking in the In venture that it's now margin as three demonstrated of refinery that the production coolant where product retail to and that's us of the joint market, where and would we acquired placement we I Asian quarter our -- strong on is you stations value could brand we've an strengthening June that we I we can kind it's strongest our a Asia, we have refinery recent transaction

your designed vital expertise think value portion to So partners business value our on to optimize trading value areas that and we we our considerable chains trading strengthening we portfolio, have where run work then product, our our and demonstrated goes we make the that of their we increase it's to flow of and they comment first for those they how the to I downstream those is To are chain. our that in second critical continue with and to ensure opportunities business, regard impact. businesses trade to chains those around concept look

think our I us. appreciate important question the So value we way because to is the about chains

Pierre Breber

trading to that risk it our volatility We it. think to Okay. trading thanks of I'll in and think questions. attracts come understand for resource because support I a earnings shareholders a our your that, just company, particular because the other add, multiple they in approach little Paul, generally and I can appreciate

Paul Cheng

you. Thank

Operator

to at next America. Bank Leggate go of We'll Doug

Doug Leggate

call. in morning, done could your maybe on is, see behind are rationalization Good you on cycle guess Thank seeing be expectations question that some markets being if any bottoming process of while this the offer process I I wonder you. to of a you Mark, your downstream portfolio? perspectives you What take same my out. of I how or could for everyone. shoots any playing the are just advantage going Chevron with what's totally any green in downstream in terms is and here of you

Mark Nelson

see demand products the see in that greater situation. Asian and beyond -- the you to areas. Well, of you've it's rates in a we've brand, Southeast it some high our about the We're we happening past the three it and go able been margins their have is feel certain back given markets I unique margins some to in our asked for Neil our XXXX to for value levels question, sustainable I Asian to relates I strong we to thoughtful on like things Australia industry all with it's past business, general. a those going think markets see mentioned we levels where in path downstream of question, we and see If and growth recovery can go things in are of that

than the we that value maybe I on the in that help that will that those getting that, are I chains time side So The would we through shoot, over industry of demonstrated to I expect, over demand has work opportunities -- would the reduction, inventory equation. to say naturally we'll those I the announcing, the strengthening think think us earlier, at time, continue look while done the but looking will industry, that rationalization, suggested our that. finally, rationalizations compete time. we've chosen we're of rationalization an and the green might companies I predominance which refinery those if as presume to little amount always at And margins think sooner see and the of through will we've we'll of mentioned come a but bit recovered are we is as take

like can data then self-help on control products. desired certainly focused the using the things costs, we equation of stay that operating will yields with analytics lowering We to and and the efficiently and side price our place running our

green we of on at focus those hoping we'll what So, we're some But fruition. can control. come to shoots actually

Doug Leggate

what Thank the and apples we on reduction, cost so I'll the reductions given clarification headcount follow-up at Thank CapEx as 'XX, think on, cash related is, just leave we there. you. is operating 'XX apples and My for for CapEx, you. look Pierre, versus I some if what it should may. number the as Pierre,

Pierre Breber

Yes.

Noble excluding provide to more we give seen $XX asked our a this through details now. about we'll sure again, we'll a year equivalent quarter. So Devin of billion and first use that approved, good when affiliates I OpEx together said, of formally $X Well, have we've I I can number year, on all on all guidance program right not put much that but think we'll synergies I'm a billion it's billion the cash some question, the X see is transformation, again, say OpEx, reductions that here next in and as capital

Wayne Borduin

Doug. Thanks,

Doug Leggate

Thanks.

Operator

our take We'll question Paul Research. Sankey from is from Sankey next

Paul Sankey

you Can me? hear everyone. Morning,

Pierre Breber

Paul. hear We Yes. you,

Paul Sankey

Hi.

various and some industry-leading your balance seen oils, about even values talked incredible deterioration globally. around You've sheet in other we've

more Can and don't your you without of I some globally, in thinking that competitive it position, with anything to feels position. I very difficult you're find debt bit improve of that about deals? talk add In kind a little a it's you're a there such that that about as seems want wonder acquisitions, now just terms compelling strong Thanks. assume I would isn't I being that actually happy assume position Permian if which you're it your doing opportunity, assume to that you

Pierre Breber

Paul. that so will on now integrating those in Thanks, a focused go year for really good wide I Noble's enterprise about working also effect been off again and successively as a our to priorities. Look, talked transformation our we've really almost restructuring start. we're are and on we're and November X

quality Noble value time. about future If a just mean, good M&A said, assets, we we've going right assets for meets to I at I pretty consistent it's quality we've have that been M&A. high not of priorities, a I'm bar so the at and criteria maintain straight talk for through Noble clear we've financial As on it which speculate and organic think XX.X%. what sheet, they strong our are, I cleared our about debt do acquisition and our program done to done ratio to we're that sustain and long-term three to support that course, and a invest with We've balance and years, value a we've able grow and the do bar of in of doing that dividend. been net

have necessarily said that In it's the again a I you shareholders, leading add we Permian, when nice our on for good bolt-on, very on is Noble position, Permian, terms our are of assets it you our focused that think to assets. think provides the not M&A value that a quality accretive well, are focused shareholders

Wayne Borduin

Thanks, Paul.

Pierre Breber

follow-up, Any

Paul Sankey

Thank you the zone? I you. it's about subject. anything you your and neutral Could add different talk on totally curtailments can do actually, OpEx

Pierre Breber

our production in Yes, third quarter. a was the share terms zone, barrels the about neutral day, in the of XX,XXX

that going So well. start-up is

barrels overall, curtailments of guidance was oil our about XXX,XXX the we of equivalent. provided terms In

plus of gas that's related. equivalent the OPEC is majority and oil So and that

and Angola. again countries XX% like in that's Nigeria of and Kazakhstan, is that and plus XX% So OPEC related

Wayne Borduin

Paul. Thanks,

Paul Sankey

well Just the quickly, headed you to? go neutral are where on zone, just quickly,

Mark Nelson

safe continuing and any focused to We're have provided gradual haven't on guidance. a ramp-up. We

near year-end. So Chevron we'll share update a barrels and again at XX,XXX we day are you at

Paul Sankey

you, Thank sir.

Mark Nelson

Thanks.

Operator

Borkhataria to RBC. go at Biraj We'll next

Biraj Borkhataria

Hi, taking questions. thanks for my

quarters. one XXXX, XXXX the from safe first just clarification down missing just it that's I will assume given on on in the co-lending had to be Is successive of the you last that TCO, issues had figure was pushed the a has first The question? gone couple workforce mobilizing gets

Mark Nelson

but down, of our have and project course entirely lending are address right. TCO due efficiency the gone. that. will true two which Yes, part we years. be that the lower planned, deferred prices, billion you've but That's not of let down spending lending, it a the project had me demobilization, is that of to of just and the parts mean, combination we've the that savings half this down during and year relative year or to share are on come come about related dividend sort policy year, has is about I future so to where spending, correct but to said is on but dependent also has guidance there again next you're also half seen about The to lending prices what in cost X

Biraj Borkhataria

when Makes sanctions you're the different sense. of question it. approach, using price fiscal place, then carbon project of have even do the a not Got in on But at just kind you the transition of a assume topic. themselves tell price your carbon And second looking and and a slightly do context us energy currently what you if sort countries framework you're so in as? where can kind of

Pierre Breber

Mark Standard, cases, Fuel a they by Renewable are variety pricing forecast we we we We it of to, investments our and disclose federal think carbon don't look jurisdiction generate vary, forecast. under can because the policy disclose price standard. the don't credits it's oil carbon carbon at low our that prices at it sensitive. they and scenarios gas our prices, fuel and both referred commercially We for price it commodity Yes, some or so supported, look certainly in for

jurisdiction. And so again. It by really varies

again, make We at are policy and return by for good enabled, returns, transition trying for that shareholders some to are environment the we're really in of both it and investments jurisdiction. but energy does good looking that vary is

Wayne Borduin

Thanks Biraj.

Biraj Borkhataria

Thank Pierre. you Thanks

Operator

Roger to next go We'll Wells Read Fargo. at

Roger Read

morning. Good you. Thank

Pierre Breber

Roger. Good morning,

Roger Read

you. Two questions for have I Yes.

budgetary can what people for like modules this site The said a process typically to and Kazakhstan of kind many the you timeframe slower for muster now as season on how the the to winter into know first. thought pages. start-up able and more next in all but imply we any are are provide actually you I the might head of update

Pierre Breber

heading we're is project the said of well the to Yes. and the remobilization on I Look Roger. and Thanks, near workforce end going XX. we're year above XX,XXX

far work safeguards we're expectations. our of we've the So with infection, seeing low are working rate our progress and line in well, kept very

is schedule complete cost a pandemic remobilization, holding the for going during key safeguards full the and our and progress forward the to achieve our sustain workforce using to milestone. us So

the the for all work the ground is and to in place keys to we're and into see can how now heading again we're -- our modules, update It are middle really the say, milestone. Day, schedule. and I all days. in we you terms as of on there. us the, we'll doesn't maintaining this need in We're more and Investor cost say in -- all that Having the plan material provide those early of so we're and address we we So would know are progresses that's of an really a winter, just remobilization, mean forward important going by

Roger Read

comes, what Okay, great. various could, operations everybody's then follow-up, leave unrelated this, as you a And when out but drilling. it quick your getting Noble pad look across of

of Just Mexico rates curious or are of it's Permian decline what better if than that The the way or anything just whether worse you have in thinking you either see Gulf anticipated or would International.

Pierre Breber

was seeing XX, release, Permian XX guided March a exit the down press we little the March not bit rate better at the is that. we're it market than answer short a if The I no, our I think guidance on is XX%, to will be being little to mean response recall Permian, surprises. any you our early bit higher it than

Permian exit XXX,XXX think We was our We exit around again XXX back rate a the in production better than March. only. little So that's had be guided rate that's think in oil and will a Chevron barrels our we equivalent. to our

we'll the top on production have XX. Now that's Permian that, about Noble of

to expect near XXX. we be So

very So we sustaining, we're managing, declines managing are we're again well.

the safe seeing of We because operating Mark talked a reliable production how we're and putting pleased on our add markets, are upstream operations. about like oversupplied to but we're operations, has upstream capital with just of same short-term we're not lot

Wayne Borduin

Roger. Thanks,

Roger Read

Great, thanks.

Operator

next to move at Wolfe We'll Research. Sam Margolin

Sam Margolin

Thank Hey, good morning, everybody. you.

Wayne Borduin

Good morning, Sam.

Sam Margolin

business. is question renewable your My about gas

intensity because California refining you to least the I how I Air constrained the CNG LCFS. emissions the carbon guess business or but at by under are gases off it scores, you're charts. significant when big I a product, benefits negative totally is, actually, amount Resource the the look don't was mistake know this offset something, Board from market, you your saw at of first I a able it, of a given XXX renewable thought it If which the or obligations all like

Mark Nelson

question expect Thank as West. policy of strong natural and recognition would is the our Sam, renewable be a gas of us part RNG you markets Hey, Thank the mean in enabled of kind and space we why the be should the this to Mark. for I you. value we like considering chain. player the

this low As and you've fuel with product, indicated, it and made, announcements the even and CalBio adopter wisely is I the our the ability we've that from and it's the RFS so risk we're about to execution to see strength, then and grow perspective us ability and we've you'll our most got here. need actually excited our your LCFS put side ports to and that especially time CalBio to to and partner continue efficient cost carbon the the so and an feedstock you folks, over it place leverages second think element

Wayne Borduin

Thanks for questions. the

Sam Margolin

Sure.

reflect necessarily so out it differentiated a see is just you you actual your change I from and mentioned capital the a or mean, I light guess I And that is follow-up. basis we're low not that think corporate shaking level not said to demand know of carbon things but you've that Okay. a the manage planning of outlook because how transitioning you one of directionally on on world. it's but price can the prices, you the that, But related in might really that conditions,

what election, change on terms geographic scale beyond are to is business of things the share you be this had, market here. and but footprints California, what out if gas there just basically thinking can renewable depending can really in other could are for there it scope Some you

Mark Nelson

look in is can consider is but we'll certainly growth short that where value at answer to there the is Yes, we regard potential. upside strengths we and this our where existing to execute have our chains, well clearly context, plausible. growth in and tend We

Sam Margolin

Okay, thank you so much.

Wayne Borduin

Thanks, Sam.

Pierre Breber

Thanks, Sam.

Operator

at Next we'll go to Suisse. Manav Credit Gupta

Manav Gupta

my for you taking Thank question.

the pointed sale the over ban that in business that plan indicating the legal refining that You in combustion XXXX, many and is high-class there earnings saw the your governor way are he two the in wants authority think legal in as does Neil way downstream the have not internal engine or experts changing to you assets he out. you the of we as new stronger California out, that is vehicles, California, have any pointing are

Mark Nelson

positioned economy have think the I of under be And normal brand actively we you both product a question. tremendous for an for California California, the participate been we've we keep the refineries, here I and generally connection believe thank that participate a to a a engage and a in and California path have for to with actually the the will -- strong with California, a that from and think for to the about for when a conditions, customer strong ability and I'm thanks of to carbon reliable we think successful can to towards I future, so. backdrop lower in place desire foreseeable build years California's very mobility. the you affordable in future. Well, think And a are and native lower-carbon I to fuels well with to government future XXX perspective, over do

Manav Gupta

do like have you are since can about two for follow-up you better you thoughts Noble synergies think you think a those on upside had Okay. any assets. do better surprises, that A is, quick assets month on any is, acquired there you you can integration,

Mark Nelson

assess very Look be one to starting you synergies, few I month. quarter, see going example, update it, first company. In time let also contracts first the on We're able, sometime we're first thanks the we've to the give more procurement successful operate opportunities. weeks, track, to as to and at a and some that of we'll look won't very to us the opportunities. it's us, again been it transaction been there as operational we go to for complete fully see in we just that, have and Yes, all expect announce will a first Manav. again, well pleased and is are a fit, Synergies through good

have higher. synergy expect don't a We're the course. to and in do number be that number you. I to going We due for you advise work will

Manav Gupta

Thank you.

Operator

from question at Cowen. Gabelman next our take We Jason

Jason Gabelman

seems have intensity? Yes, you'd framework to reducing hey, this for related moving if I Thanks. your which unlocks the the with wanted I to what on zero into US now model one of within on it Curve, to use achieve questions face figure are what of going this opportunities kind that by is seems to to be and towards and spend of a you net been this, it And European able, that cost of sense does do them you circle ultimately does it, peers Marginal of forward. kind enables get have like you've carbon Cost like of need that partner you of how I'm couple to that net assuming Two do back emissions its useful you to any with Algonquin, hit kind partnership pressure kind to just this Algonquin, the the goal pushing XXXX. by of a does think quarters, some XXXX, that wondering a curve to Abatement own zero

Pierre Breber

Mark Yes, says, and carbon Jason, part the energy lower look we the support to Paris going of Agreement as we're future. be

on is results pledges. not focus Our

that and our to intensity, I'm And just today carbon addressing at not actions going so are what you're get seeing further.

but carbon intensity time get in them is for likely think results delivering we metrics that XXXX and those change stock our take good I have update climate are again to on the that environment. to earlier our we're focused to approach the next We address periods, referred really

Algonquin, our of see support both, right, it sort of there, early but business. does terms of increases we yes, renewables days, and In that it's opportunities

development and are us otherwise that little seen and of work, other Permian a are far providing Bakersfield but operations. with power solar in in so do of that time. is some the operations buying do our projects going Chevron the venture we grid areas joint I engineering is the Algonquin in You've It that Yes, the well. off working opportunities in wind and take on of to work bit that does

Jason Gabelman

you slide looking you I is just this no forward just appreciate where the timing And downstream clarification, does at right. which graph, excluding definitely All on where including is graph. effects timing and was the X bar kind imply useful, plan the on disclosure quarter, included that XQ on a earnings a 'XX effects, going of Thanks.

Pierre Breber

Yes, Jason.

in the timing the So that the US we Downstream. for last International very, in the give you see appendix, absolute effects slide actually

you we've time, quarter. long you showing been figure variance. a can for out So said, in But the the absolutes as each

for going that expect us going XXXX. shown we've should that now back you And, to to Yes, do continue forward. So to

Jason Gabelman

Great. That's helpful, thanks a lot.

Pierre Breber

Jason. Thanks,

Wayne Borduin

Thanks, Jason.

Operator

go Raymond to We'll Pavel James. Molchanov next at

Pavel Molchanov

my taking question. for Thanks

do to operations You supermajors, about law, I massive compared from have not Downstream passed or and Climate a in Europe and on footprint ready other be? am be now issue, European but all the another impact on getting regulatory what weeks just to your curious, might your upstream thought the five the

Pierre Breber

was businesses upstream upstream worked again I position first have decades there. no Well, our We tax some say and majority and and we have marketing. still, refining Aberdeen a in in We lubricants Europe the we've enacted. there or many large-scale when operations, downstream additives although operated the as little in carbon you non-op Pavel and for sold of do

I future lower So carbon, policy. we the support expect the we of we is more think Paris accord, energy believe again

energy is trying policy what addressing economies balance Mark think to worthwhile those reliable the between was need. affordable world to, and goals was the I it that gets getting providing

Pavel Molchanov

a combined ahead Chevron the election. How Two us since but Permian you remind of of Noble, much position? quick is week the we're acreage on acreage follow-ups, Can the federal?

Pierre Breber

acreage. total in terms of Yes, Permian it's federal is XX% about

Wayne Borduin

Pavel. Thanks,

Pavel Molchanov

very Thanks much.

Operator

Securities. We'll at go Dingman Neil next to Trust

Neil Dingmann

more afternoon target can particularly Good you've all on about the once you about on your rolling of industries these but -- that you was lot talked of guys. facilities, I'm hoping partnership, that facility? question I again some what just now, out the just details on details starts talk renewables, that Novvi maybe might was wondering, my morning on out a

Pierre Breber

what us business to leveraging provide base renewable the business downstream which a to Well, technology of and base our concept is both itself, should continue allows ISODEWAXING own the take question. technology to feedstocks joint opportunity expansion patented that so of for other business multiple for offering to warranted. even out as you. product a that, in There some of venture solutions between and our and for round other is see to do higher-performing partnership oils. economics time, create, others, will an ourselves be bio Thank over are the things internally cosmetics types Thanks but oil I consider our base oil for we our into like be would for investigated applications, that the

Neil Dingmann

two just have follow-up great just or a and of of to to renewables And kind was then continue three on move you is Sure. sort you that, early your business, or years general. part as like maybe it or but any just is would target Do metrics certainly where one your move now, be part continuing to in job far to in that? from what might of of are Novvi potential on too you of as it not a think you the quick total only doing all CalBioGas renewables be determine

Mark Nelson

I'll first maybe on build Pierre then this. this, answer can give the on

it's early about us how But our continue part part to business. of could I to for say too our do -- intend as to think it big become. grow we as of it

successfully. I think that do we can

you While well. while as we we add would returns Pierre, -- improve return anything.

Pierre Breber

Yes, well said. this was

over conventional good We're for good for think transition. an shareholders, grow time. will true open I the and the in environment, money and opportunities going are No to to that's and in spend earlier. one that addressed the again, it Chevron checkbook acquisitions I has business energy pursue our on, So

Wayne Borduin

Thanks, Neil.

Neil Dingmann

time for Thanks your guys.

Wayne Borduin

thank today. questions want time I on to We've your everyone the Audra, do you. got appreciate in in queue. everyone's Chevron to your interest back safe through today's We all and call. and healthy. stay And the for Please participation

Operator

Thank you. Ladies third and conference earnings gentlemen, XXXX this quarter concludes call. Chevron's

You may now disconnect.

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