Chevron (CVX) 30 Jul 212021 Q2 Earnings call transcript

Company Profile

Participants

Roderick Green	General Manager of Investor Relations of Chevron Corporation
Jay Johnson	EVP of Upstream
Pierre Breber	CFO
Phil Gresh	J.P. Morgan
Paul Sankey	Sankey Research
Doug Leggate	Bank of America
Neil Mehta	Goldman Sachs
Paul Cheng	Scotiabank
Manav Gupta	Credit Suisse
Biraj Borkhataria	Royal Bank of Canada
Stephen Richardson	Evercore ISI
Jon Rigby	UBS
Jason Gabelman	Cowen
Ryan Todd	Piper Sandler
Sam Margolin	Wolfe Research
Neal Dingmann	Truist Securities

Call transcript

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Operator

Good morning. My name is Katie, and I will be your conference facilitator today. Welcome to Chevron's Second Quarter 2021 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 given at that time. reminder, call a being As instructions] this is conference recorded. [Operator over now Chevron General turn will to Corporation, the of I Relations conference the Investor Manager Mr. of Green, Roderick ahead. go please

Roderick Green

Welcome Investor Relations, Breber, on Conference Katie. Thank Jay Quarter today with CFO. and Chevron's Upstream, Johnson, Green, of Roderick EVP the Earnings of you, GM Call. to me I'm are call Second Pierre and

are refer available slides remarks on website. the and We to that will Chevron's prepared

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

over Now, I will Pierre. turn it to

Pierre Breber

reconciliation pension Thanks, lowered Roderick. were including results to XX%. return items in cash totaling this us meet We over appendix settlement of in quarter, remediation results per billion, costs. and flow delivered financial earnings Strong year. near Chevron's included Mexico highest special charge and non-GAAP was A a $X.XX in quarter's $X.X found be the with ratio in strong priorities. enabled a the measures The million, to the net reported second Debt $XXX Gulf or capital X% financial Adjusted earnings of Adjusted can a presentation. operating of top the on our share. we

Our dividend was up X%.

year well on primarily well higher refining quarter, were volumes. margins primarily billion. periods. compensation. stock-based charges roughly last discipline. to chemicals Legacy due levels, XX% billion and unchanged capital Nobel charges costs up XXXX our to higher are on X.X Earnings liftings. our versus to a higher XXXX. and are greater as primarily production downstream earnings quarterly of to now All increased higher in XXXX organic free is our full quarter earnings is increased the CNE capital we margins primarily were of increased Jay. We flat portfolio. XXXX average U.S. earnings The segment from up refining prices Adjusted higher of cost will primarily near Quarter $XX ahead last and continue margins, increased a lower quarters, prices ratable maintaining to Adjusted can year. X.X Operating between on execute across Compared pass and the the as with primarily half downstream it as first Assets. Other Upstream $X.X All other efficient All and flow increased vary due and TCO Quarter strong debt. chemicals from commodity between and results, down as capital XX% billion contributions from results, and adjusted results other year-to-date down track and and paid earnings program was capital in guidance with costs unchanged. valuation prices Adjusted tax reduction March about and at and Adjusted volumes. strong guidance and were Second I ago Despite lower Investor billion, to cash We're spending our operating Earnings guidance CNE guidance we Day are full-year Upstream roughly between lower around running same on Adjusted efficiency Second year quarters the of is lowering due from over

Jay Johnson

Pierre. Thanks,

driven a Second declines, ago. and price-related acquisition year normal production increased increase Noble offset by quarter and sales. lower production oil to entitlement by asset curtailments, was The equivalent in field effects, partially X% compared

expected production we to this March, crews and with incorporate second the we an Barrels completion rigs continue a Permian, efficiency shared with of the year-end. day last Consistent to we're greater reduced of in Even into the rate our is over guidance our half to expected activities. to comparable activity in production Turning levels, be year. XXX,XXX year, delivering by adding

an scheduled [Indiscernible] costs, $XX complete. fuel cash and at this assuming Permian expect is $X construction exceed XXXX, targets. to and operations. At We've emissions, from FGP. the our net billion higher schedule power capital, from point, free well example flow, of cost rigs For for electricity, Which of takes be carbon extension is quarters shift working returns gas One two a price field recently a WPMP and the excluding results completion overall carbon. recent to quarter lowering pandemic and for barrel. trucks spreads. reviewed This off diesel in roughly our and the XX% to natural average reduces expected intensity with progress the roads. XX%, lower our FGP-WPMP, drilling we We're and committed is to to reduces At

Our rates COVID. I as The just COVID with target mentioned. the an extension as remains favorable cost schedule cost remobilization of mitigation reduction efforts $XX.X well incremental expected demos efforts, costs, offset and as billion, and billion $X.X estimated costs associated exchange include costs

we facilities Jansz-IO remains being expansion. for the design our on developed for to Australia. support recently a and the complete, decision tie and Australia, of the Island. Gorgon project, hall Barrow Earlier heat existing next have deep new of newest project our a The to Whale than exchangers returns In which Gulf engineering higher investment total and the enable higher we production a billion, and facilities is project Repairs the of Although facility have the year. at Anchor which -back $X.X COX its front-end uncertainty only facility. LNG with peak and the workforce the focus the primary all a our online Colorado, deliver to virus the achieve is as month, kilograms a production now Ballymore natural smaller XX% we carbon. project its recognize on tanks have we remains to generation schedule this of assembly footprint, with flare Compression project the sanctioned of future to Fabrication of design, target and contingency X X variants. the virus cost unchanged, of isolation system lower increased facility traditional has with flow associated track operated costs Faith in eliminated the per reliability, and In water project example The In potential Back workforce project you, trains of great subsea the XX% Blind lower and to protocols a another carbon have final lifecycle currently sanctioned propane is The vaccinations, also are have track to underway. our Mexico, mitigate BOE. to the impact to will of testing, entered to is productivity. project, and gas intensity XX% Pierre. to

Pierre Breber

transaction Thanks than Jay. achieved complete, of have Noble months In previously Noble and have With we in Midstream. acquisition May than we this fully guided. greater X $XXX earlier million integrated closed the synergies dollars

GS debt. billion. project X up builds cracker our rate believe cycle, is continuing feed rate to pay and the was our our The be and the with resuming at budget at down XXX% restart sustainable financial schedule. that consistent a is repurchase completed $X X the is of while of share program through priorities a started program under on to our also we mixed at to targeted track months we're third annual This record. in ahead We of and quarter. capacity In Caltex design plan third The the quarter,

shares of a businesses. daily buying consistently entire a have ratable We're period. history quantities meaningful close average lower-carbon continuing price the We in to to at back and over the XX-year grow

across announced renewable Refinery, feedstock started This viable in our bio co-processing one leveraging our growing completed leverages gas from MOU an two concentration, to California cogeneration turbines. by manner project businesses capital-efficient for and Segundo engineering full our We of Cummins has fleet technologies; we've at and in quarter, the carbon recently develop carbon on diesel innovative of hydrogen. project facilities. turbines infrastructure. a El Also, to capture potential with capture, COX in emissions a we the production This front-end commercially existing scale

the important further new to CEO. organization announced to fast-growing, energy Chevron a new reporting to is creation build profitable, new we a future. of advance carbon yesterday an businesses step energies, directly lower the This Finally,

Now, primarily equivalent of production the expected barrels reduce also In our X,XXX reduces major quarter, looking to XXX,XXX we day, which about oil expect per day. ahead. TCO, barrels to turnarounds third at curtailments per upstream by

how change an to higher pay part of payment debt. prior hosting expect guidance in CPChem our higher make earnings. the one-time contribution expects expected expected back we'll is affiliate We invite our XXth, in we in from intensity for provide dividend to TCO 's businesses. line regular to plan versus adjusted addition on September lower you income to loans incremental join expect TCO higher pension guidance third dividends our We year the in contributions. operations TCO we to Spotlight increasing the with this us a share line reflect video Transition This million. our webcast. With this Also, We've all carbon of no On year. quarter There's on Energy quarterly of $XXX it's to cash to our more flows, its be of operating lower-carbon earnings. and higher this details grow in

higher unchanged, returns, lower-carbon. Our objective is

our towards breakeven, we investors. of make resume balance that, With oil we lower-carbon prices it buybacks, part will important I quarter, and turn to achieving above industry-leading sharing stronger our goal, And progress cash an this Roderick. results milestones. upside back dividend this and continue well delivering with with the During will sheet, financial to share

Roderick Green

prepared Thanks, remarks. concludes Pierre. This our

try ready your and one to We one are follow-up. Please take to questions. question to yourself now limit

all your lines. our We the best answered. open to will Katie, up please do get questions

Operator

first with comes you. question Thank Our Morgan. from Gresh instruction] [Operator Phil J.P.

Phil Gresh

off Hey, pick left good up allocation. to I'm capital Pierre. you on morning, where going there

You breakeven, of a $X to which sustainable $X to dividend. $XX inclusive buyback, Obviously, the plan. barrel you your adds think announced I about want to $X billion which have is about this that

Oil's us at You've Help now. XX this talked that. about always context. in put

are at things? or $XX Do We extra is here, down net-debt-to-cap. barrel, have debt point, a oil leverage you your and price to you from this about thinking XX% driving keep how want at $XX,

Pierre Breber

we'll be have repurchased last shares. that By the resuming Phil. program, years Thanks, in our now XX we XX

years. that's continue out of every X it us to than to we're at down And doing that So level allows more debt. a pay X

XX, really As over the about talked ratio XX%. Investor range with head should XX% that, kind our the and should that head between implies debt range. $XX, our you below XX range net is well prices cycle, Day, of like about XX% I've levels of above below the with to XX% we but bottom That talked again prices say, we above during of debt to prices

into say would the -- the over it from this cycle, dividend it of a as like years, mean, generate bake it's dividend. it is our the financial Investor more of calculation. and our is necessarily But In over than XX can and say feel to billion that excess we our thing I perspective, breakeven, but is, excess $XX flat I I'll Xth a we our view commitment, sustain so Brent we intend sustainable, at terms our at Day is, of capital and it last priority X we the don't breakeven in cash showed That's cash. nominal we

you have that we X so enough And this see program sustain year, to X billion buyback to at shows at capacity starting more reasonable a prices. than that us it

Phil Gresh

combination carry dollar how of sense. the billion any XX to timing Okay, was give might efficiencies. look on just The there talked the further and could side billion a those it some XX trying Tengiz second that you think you And about range question, factors? said reduction, of of as the at this then about. longer-term breakdown I'm to makes billion the Is you've things. Capex forward of two we

Pierre Breber

Yeah.

over Jay. it to for guidance lowered our Let me pass billion. start, to this XX only I'll We year then

As from you portfolio. then lower say, and the it's being primarily TCO, spend deferred, greater efficiencies at capital due that's work across to and part

we're as about to efficient. being long-term talk half Jay, I being you billion no half, But XX-XX, some change the guidance that's project of capital XX could There's or in efficiency. in that a through XXXX more think of greater you XX as about ways maybe can billion. deferred our view capital guidance

Jay Johnson

only plan particular, activities completion the And sure efficient. of and operating, has and Australia count, U.S. seeing this It's said. making costs, has cost been consistent we're other The as Stage Gorgon from completion, really just drilling across not in But the ahead good tight very drilling operating mentality in standpoint. in a efficient been a discipline and portfolio overall environment, shale very and Pierre really disciplined but on and X every with it's with Permian dollar -- Project very throughout organization. the gone COVID and then

Pierre Breber

Phil. Thanks,

Phil Gresh

you. Thank

Operator

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

Paul Sankey

Hi, good morning, everyone.

Just a could. follow up if I

Is You high history has that, sort last Tengiz to the of somewhat mega costs at oil? guys how to looking that megaprojects development. really that troubled have megaproject, beyond very you megaprojects been or by -- think? is any be going of ongoing and that these another as that's Capex. and you obviously you do by Permian an But And the that the as guidance a the but see development. that perhaps be at major be Tengiz megaproject Is just repeated, what is fragmented your looking we're by won't western how we developed Capex Thanks. we'd setup,

Jay Johnson

more, shorter-cycle going Paul. into projects, on. with we asset you look, But never is the industry, of In oil that higher-return new and be the we very the are that have, we've move bring capital, portfolio to forward never. which going Thanks, as to quick before say preponderance XX% talked our the and production

tend low carbon high of But pre-productive part of efficient, footprint react will have tends cycle. doesn't and we adjust important portfolio. They Deepwater be always to have very in our to all has on and based mean It be and continues market that low The just very an quite capital. short it We our be conditions can returns. rapidly. investment to

more taking these see a we And the in Anchor make effective. at We about more seen very that projects Investor going projects capital to queue. Ballymore but Whale in disciplined continue and those And so talked to efficient, we'll we've and roll-in, the to Day we're like way. are how action do

Going minimum efficient what's it outcomes. as I objectives, going as of that more our that the we're higher-return to necessary amount looking a deliver small capital, returns and for. really lead approach, relatively think the and to only building is to And facility whole much to well being

Paul Sankey

the the the of how follow-up Thank then with about you be, come parameters, maybe annually? X Pierre, did talk X assumptions? the price Jay. to And you. Thank you Can just very much, up billion Buyback would you oil

Pierre Breber

Well, on said that range cash years you as sustain thinking our a balance when past, and We sheet. I've we the we a multiple of confident we Paul based we're through it of excess oil confidence were flow cycle could the of -- over prices. the in would the start strength program know, in

been met. so criteria And certainly consume you that those both of have

than having nothing continue our Phil It's of down terms to debt I should the above the to that. ratio said be level, to as Again, it In 's question, earlier pay prices. debt debt is prices below lower, these really more XX%. XX, -- net

range do a can that about is allows feel the us still volumes. We OPEC+ there's this but undoubtedly a impact continue having the also macro, so variants to range to curtailed you uncertainty. deal with And have It that that. demand to us good there out and gives

"We to we've have level, that says, and high, I us very on if and daily buy to average. don't timing. chart use that, Phil. that's they'd heard the holders Thank that thinking shareholders close try the who the showed So flexibility our do some in buy depending to goes share But also from average." price, they said a It can us bit which flexibility inherent we've prefer you, we from we the beat so less, range, the discretion, a is or gives daily buy the the that that behind better range. of Chevron's stock more strength heard to want

Operator

Bank next America. Thank We'll our from you. Leggate Doug take question with of

Doug Leggate

on small the Gulf question. please. radar. that that's morning, us Maybe follow-up, in lot I there's going flying of seems if It a the Mexico wonder the I first to Good under Jay, go you polls could everybody. a to

us Ballymore, 've legacy there's Anchor; a mentioned laid what out you've Leopard -- for there you Whale, so ask activity than has efficient seems are, you've got this non-working to obviously Leopard just and few on you Very going area got Puma. and at what a more update if a plans to And I for you opportunities lot capital a because your this a in And is longer-term I You the as on. perhaps other interest going and level could infrastructure point. guys. and wonder give just been on. tieback your things quick street it

Jay Johnson

already of focusing If the like justifies can to lease has objectives, so to of efficiency. on that looking we sharing go of our the And something we a so acquisitions up find it opportunities into Gulf Well, lease facilities asset part infrastructure and Whale replicative that ends Deepwater, Gulf from forefront continues groups back what staying Deepwater We've important minimum portfolio if But where rapidly where on we're and areas something functional nature, make learnings continue find we doing that development, taking and a be. long of We're we exploration our from building the between the an to that's those been be tied Mexico in Ballymore. existing Gulf before, Asset a are really we're of for big focus are learnings much can developed we're on where we a those our that project the Class, route returns, of the the we these of the it the infrastructure. sure Africa, as is to been from concentrate different of those we Australia, building Mexico, largest West our the with past. on greenfield in time of Mexico. one we've new can we've focus have for primarily normal, holders do importantly, talked

these be very level efficient, it low exploration We that a so can laid focused. keep out. an program very days that's pretty at have We that

low looking And across the we're good portfolio, represents Mexico but the always a hunting carbon ground high-return, Gulf that next We barrel. a of that. for resource for have base good

Doug Leggate

Sorry, as give you've I Can but an couple Silverback mean you a Leopard on you, think of don't those? well. Puma to us Jay. I mentioned press I got and update

Jay Johnson

release information sharing those due not information. on will we're course. point at this time, We in in But

Doug Leggate

leave in, your Pierre, cash-flow front Because you going coming what projects did what my pointed big terms it plenty capital Okay, Noble. job are currently amount huge of thanks. use of What's you. there. thinking follow-up Well, of of as and And a Thanks. extraordinary quick the in in M&A? incorporating of cash is, clearly, on a fantastic efficiency, I'll you latest [Indiscernible] forward? thinking not Paul out,

Pierre Breber

happy very we're Well, Noble. with

integration said, double from an initial synergies, at perspective. we ratio exchange just As first quality close, first completed a time we good declared the announce, to than more low complete, and we're the done NBLX, premium, to the assets,

we're you and need a way. in know, we just to bar As talked and We very we don't how certainly efficient we a always have transaction. looking, our and very about grow can high portfolio it sustain capital a do

it last you to with say it keeps sense, stock on as Noble. thing we've cash don't volatility, in hedged seller. the I kind down something that's lot or view we and between of did Just a this doing do would go as of oil the prices with really we in is, M&A buyer a our business and basis Makes case up being shown prices -- required

only as with all organic or shareholders. if take any interest our connect be disciplined kind or whether indicator course, it balance action in inorganic, So sheet an I the capital, other see capital, on being it's our we to M&A. and we'll way to of wouldn't it's going of the We're of one actions

Doug Leggate

I appreciate Thanks, answers. guys. the

Operator

Mehta question with take next Sachs. from our We'll Goldman Neil

Neil Mehta

to latest the is Jay, $X of Appreciate for you've investors Can in give a here. you. update and what around first you billion you update And costs. go thank question It contingency like Hey, work on good the is to get seemed the modeling the so interval your confidence important that that done just some through Tengiz. relative always summer was in feared. to of read the Kazakhstan.

that you're the that over things watching are ensure going you key track. months be for to the about to next talk on of couple Just

Jay Johnson

of as Thanks, to. an to to costs foreign we capture offset done with the which the the said, be impact we've responding our offset, largely the happy along able At of has TCO, exchange virus. savings, extraordinary due been COVID. gains, cost And to Neil. some incremental job have I'll team of just

within and well, really fabrication where to had Delta in and millimeters on vaccination in mitigations, point variant maintaining those that and continue is X now try we we their we've focused of and government It's we this we other at where in connections rise go it's continue particularly our with stay millimeters the fully numbers. accurate, that up time, on to standpoint. are forward program been have were workforce increase X that that have high quality, the FGP, done showing workforce. with our reached work pipes to dimensionally gotten peak we that with about initial [Indiscernible] between the site the are exposed and modules. from members to XX,XXX and and be modules at we've accuracy So to are and so so helped It land us that to. we dose the such variants to XX,XXX workforce vaccinated proven was successful our on The Because continues have move now to completing something of fabrication,

through All program of to been all modules restacked, arrive shipping set on and successfully their foundations. the to going moved site, Tengiz. the at They've

our have entire foundations for Lift being so project interconnections preparing and hookup behind just the All the And we're the to now. the completions the and Program equipment heavy on is and us Heavy We throughout that on turnover project, set for startup. complete and program now focused been the mobilized. has

is so on eliminated from traditional impact But We're primarily case, need that and critically of pandemic our very be this well monitoring you this from any So we're increased very our it we important impacts because to future to in risks. billion focused stay over around our due around through potential point that's summer, we've to actually the been said, while at productivity. X.X way. this contingency the efficient have world and would normally uncertainty we've We're at mitigating many COVID; we as decreasing doing far being here. so this, capitally successful and we

Our too on good little didn't we're We a hard try focus project $XX.X the it's this the is the parameter. focus that to to that and at feel of bit slip because and a use resource, schedule so allowed up. managing was billion. our cost schedule is delivering We've just catch predominant within cost on

Neil Mehta

Thanks, Jay.

for about level, Following up the barrels right on a where here can about the how you the you us mind day. talked Permian see see You less of in on now. you think with growth planning do more cadence or growth you XXX,XXX asset you cash for still are the do as a exiting XXXX? talk close we activity -- free in to business Permian? you running about the year has flow you are see Remind the engine the And and

Jay Johnson

at We we least late to and one before another Quarter we Quarter. Fourth completion expect an we levels. expect X currently in X there, at same from back have add out scaled drilling currently know, July, we've add and Third significantly reduced actually last we Well, level even in a you to add lower-level the because more activity. X year, crew and or getting output more But the -- maintained constant activity, getting the of we time, Permian, as is we're those efficiency of better, additional year-end. activity did In a rigs with and

But that are half we market in start second of to We'll activity us. right signals continue see as are be not monitor we to disciplined in approaching levels imbalanced, the to where to and to to going move our overall increase are starting the continue we seeing focused. come equilibrium. terms markets in the towards but very direction we're So

remain objective. returns Our the number X

be those We to as to stay again, factory are into moving so. were opposed more efficient are But and drilling going on months or focused back as last we retention returns. to the XX more disciplined over lease we around having

free a as we while to look that's going asset balance and the portfolio. disciplined is can generated maintain Permian continue we that is on our to be critical we the think I we've in flow that to because grow generate and continue we What demonstrated forward. focus So cash

Pierre Breber

And -- oil barrels total there's Neil, earnings in supplement, in unconventional second equivalent memo our a the Thanks, of Neil. Permian so quarter. item, production, we XXX,XXX the

Neil Mehta

Pierre. Thanks,

Operator

Scotiabank. We'll from with next take our question Paul Cheng

Paul Cheng

Hi, good guys. morning,

Pierre Breber

Good morning.

Jay Johnson

Good morning.

Paul Cheng

at Jay, supply how next you what couple it that into questions. 're do making years, or the the year the to decision going not, you pay In X process? in market there's the that looking whether whether are of your long [Indiscernible] -- fundamentally does Permian, when or next means you still –

Jay Johnson

And more we're Well, being price a I think, to or threshold that's some of course, it signal because does. by just not triggered an for price instantaneous need activity.

how about, Investor our gave markets talked at given we as of the we've the you Day, guidance As expectations we've you forward-look of Permian recover. the with

to world, the low very for levels monitor ramp good carbon barrels. to continue we Not us. so And demand to oversupplied levels. fuel, than decide the also demand still going why fundamentally being to in for balanced, continue other are the intensity, quite develop products, is for to and only but place return starting we're maybe world international that's Permian picture most in the has of jet up the we're in as a The cautious, marketplace to But us, our rapidly. the supply activity we seen returns has recover we've us for pre-pandemic it's seeing new it being and we're how a high Now, but to to market, continue Permian.

driven for to the target; or a it we're by a opportunity increased So going key But target production to output capital remains be we're allocation. target not make returns. an driven by

Paul Cheng

way, another just in Jay. it ask me let Maybe

If still grow you the determine still next is you Permian fundamentally year oversupplied, the production? market will

Jay Johnson

you speculate given as we're not have much in given I've going as past thinking that, you I'd about to disciplined We've as we be our guidance, the beyond rather continue can. to and as the Paul. I

Paul Cheng

a Xnd the in a years, The you when XX Pierre. initiative Okay. target at percentage you're you the is question, I have XX to actually looking ESG next how and for going this Capex, new in year to are business? billion spend much on In -- several do

Pierre Breber

X businesses. We wait operations another was Investor Energy and talked at grow yeah. our Spotlight. advertisement Well, about Transition That to of to carbon I'll lower Day and low-carbon that, through updates total the our billion in intensity put of for terms and in our XXXX,

So will that'll everybody. to XXth, be September be webcast that

lower-carbon deeper we We to more will to future into our then. actions advance say have a go will and

Paul Cheng

you. thank Alright,

Pierre Breber

Thanks, Paul.

Operator

We'll next Suisse. Gupta Manav take from our with Credit question

Manav Gupta

Hey, guys.

with model some Whale. You the Can the and estimates? for more help better which recently SID credit the get will us your you in project help it you a details, so us anything volumes, little partner Capex,

Jay Johnson

is question. say the I the operator. not for Thanks we are What would

And types the like types to say to for in so Whale really to a of good things. you invest of happy information of the those We're will questions, asset. best is for those refer this is source we I operator project.

the carbon largely based on better using develop from incorporated before done was a that for where from just efficiency. asset. be on We're Chevron of and also replica exactly of looking the great capital enhancements between this the facility. facility a for to minimum needed It's low and many about expect It's Mexico right what was or cooperation intensity Gulf facility Operator is to the the innovation was talking good previous this based balance returns. what objective, of between a action development. There into We have principles been we what

to and this details. the the refer seeing So for progress. it we're to project But forward quite look Operator you happy I'll with

Manav Gupta

X question Petroleum then CPChem strong mostly here happened. in and obviously is, the were pandemic JV you My Qatar was at quick follow-up very one looking My quarter. actually build the and point, crackers is,

there Are or a on in given how -- tightness possibility crackers. about And you're we seeing ethylene those chain pursued think be is as think about which be the they we brought should back them the might can table ever? so not should margins projects

Pierre Breber

we as We're demand, the right it are Qatar, And we're in final of venture Coast continue Gulf off medium-term. are those together project same Aveeno of I ethane And fund. the said. think, carry-on we then At seeing when projects. advance Chemical from feedstock next will on the feedstock. strong some Phillips to joint Chevron advantage, project the the decision completed to say SID tight Their work with both and coming relative additions late year, Uri. our Company in effects -- working others Winter tight I when world. a Ross very is was with now and "we", projects steps, on to you ahead. with in determining competitive partnership time, continuing the in that investment say the advance Storm to inventories a bit occur. including is the low-cost But we They capacity last around I'd mean

And and our so Mark Nelson, very Head projects. of team on having focused his efficient Downstream, capital are

ethane have enough feed but what the efficient it's having working and the it's really that's And development. So cost teams just are to advantage, not a capital on.

Manav Gupta

Thank you.

Pierre Breber

Thanks, Manav.

Operator

our take Borkhataria question with Bank Biraj We'll next Canada. from Royal of

Biraj Borkhataria

for taking question. my thanks Hi,

Abgami. on one's First

impacted upside quarter? you a of second in you any details any of limited and majority ownership follow-up One you, confirm impact a of then had this a highlighted whether cash And on you're to be headlines, that the whether the a this Nigeria, actually the would change field, peers there's Abgami owner. in on There's able topic. I redetermination your or in but different in field have and

Pierre Breber

had not specifically discussing sensitive, barrage. longstanding comment sensitive matters. on won't commercially we It's that practice Yeah, commercially we've a of

Biraj Borkhataria

raw just Xnd inflation any worrying you what Would on general is be portfolio? more actually a fine. and about seeing signs -- question of inflation. and question Okay, talk across materials to across services the able whatnot you are in

Pierre Breber

and mean, We've seeing maybe of action. in well are and well that isolated into but our I the I think it our -- in fairly control component about a example, is XX%. wells talk downstream some in our for COGS We impacted areas. about than about time We a trucking has pretty services up, segments. us small a is under seeing at tubulars go wage upstream there, is that are the but terms more of certainly increases there in labor steel cost, cost say it's costs and not. I'd talked we're past tightness is

Biraj Borkhataria

you. Thank Okay.

Pierre Breber

Thanks, Thanks. Biraj.

Operator

next We'll ISI. from take Richardson question our Stephen Evercore with

Stephen Richardson

the plan, little further curious to you some road, things new go conducive wait this some seeing Curious, today And finding are good sure the you're Pierre, is terms theme they context to which about have you capital on could consistent of have versus framework different that so business. in policy and on a geographies -- that actually things your bit building and the some a you just perspective here, energy's just Hi, talk and to was there that have business the and frameworks making business? be return of externality. as might this down tie a up of I don't to out build businesses enough some in high right policy if morning. wondering seems you and on market

point. So just on that curious

Pierre Breber

which has business. downstream in have does brand leading But lot have policy you're Well, to large of support right, a we're a California there's policy we businesses. player -- with the policy this and enough operate we area, leading and upstream a vary, in these but here advance

to X Now, parts there activities. lower-carbon are main our

intensity focused also first to is reduction inherent first has We the carbon on. put And something largely the policy action we're capture. XX a operations, lower that's at not per on or certainly was taking that target does XX% yesterday lower-carbon The of then The our XXXX kilograms least to advancing and hydrogen steps. announcement that's we're out and really businesses. on carbon barrel, a --

gas lower-carbon diesel and around assets, and renewable are fuels, renewable capabilities, is to natural trying renewable do our to Our we about downstream talked really team we've What advancing customers. previously. is connected

we we have where, that of again, competitive is our get percentage we capability, like to these that renewable jet, buy we Airlines. United Sustainable are we're But Airlines making jet we that a having to because That's operations a and as sell have not So one have thing business to that going lowering can when jet customers, but or renewable feel We solar. gas, and the again, mix of player large supply carbon part again, X%, certainly advantage. period, We're time in but like areas we'll in are conventional. XXth, what is you some adjacent pursuing we're a space, from be hydrogen, taste for scale a United of expect to business. carbon September so we the decision don't going us. doing standalone we sustainable leverage. assets a natural with renewable share is more it natural X%, to capture, diesel, intensity, jet. sustainable fuels, the have power lower-carbon wind We're not little should on XX% renewable that's

Stephen Richardson

very the much. I Great, appreciate clarity. thanks

Pierre Breber

Steve. Thanks,

Operator

We'll next take from UBS. question our Jon with Rigby

Jon Rigby

much. very you Thank

can highlighted little carbon referenced, operator I wonder times which you've your years projects as intensity work think the I question think in adding lower stands now, just actually FID obviously carbon I be process Whether Whale that. your periods, source -- referenced as And could can for is, the is IRRs, around at at a it FID a of whether Jay done there's a look about been in the you're you whether right both statement. source, on as talk actually remarks Pierre traditional very, carbon couple emissions and and that. how secondly, payback in it make one it I the comments very conjunction your low for by economic well, if also talk return Few up etc. you BOE. you think is, the the over actually you carbon was and made emissions power by into feature built profiles decades. with emission you struck things, prepared portfolio, renewables that whether you that around an MPVs, Colorado about alongside I as around can

Jay Johnson

take so question, as Thanks of entire we as but ideas are opportunities keeping upstream industry their investments for upstream greatest midstream, to carbon And a broad, we've and then for we focus entire and carbon far done call best into in our XXXX, we from exploration, we're the the emissions now in portfolio, focus our We've is center, reduced going our some do on by us been the there by roughly to have have reduction Gulf largely And we look been that every least making very business so can not bring we XXXX the downstream, those and I'll the rather for worldwide, actually a the with A don't across in they as for the through upstream for cost I'm that intensity then Since but independent so we higher where our decisions, half find in of to at back In broad for capital. sits upstream, invest their relatively the give and but just abatement focused being reduction Company. low-hanging flaring initial just Mexico. intensity we've been of enterprise, marginal and we've we own XX% fruit. XX% so starting for starting question. reduction what on and out we What our stock carbon of that's goal return the position. able curves. pretty methane start the down carbon set Chevron, time average carbon on determine, upstream. portfolio good as to our we unit that the bring amount projects

fact, big sorry our since reached carbon in And occurred in targets, XXXX, X of in targets years we so that's XXXX schedule. reductions we've XXXX, ahead seen and these XXXX

in about process talked get the And emissions, COX so job designing we've we the you Investor And out across for highest already the of that set great new towards kilograms portfolio. have like and some the a teams at the targets barrel, done have the of per we're of Noble to of equivalent in basin, to Places an March gains. that Day down have working the those parts huge that's path XX resulted to where entire XXXX. which the average that's DJ now, of

to XX% only COX lifecycle To year the seeing policymakers very we're information allow think not said, manner. our in to that also COX. the the to we in for which down reduction, Mexico, is kilograms X XX places and as XX% so, supply of lower Gulf so of to reliability, world, they're And barrel produce that at that's we seeing we the important carbon-efficient per cost, energy it's that the us tremendous. why entire per good understand very are Mexico and we're a Gulf there's equivalent put critical in to kilogram into comparison, XXXX, a And high do U.S. X per range, a last operations of like footprint but

going our move In criteria these that elements forward. are allocate the are equation we as these capital But to to we're where as factors into decisions. we we and evaluate all we are how terms investment of these to balance decision-making, make bringing we have going and

Jon Rigby

That's Thank you. great.

Pierre Breber

Jon. Thanks,

Operator

We'll Jason next with from take question our Cowen. Gabelman

Jason Gabelman

my taking Thanks for Yes. questions.

on distribution manage year, factored I on us buyback, the your what at to was spend, would last which Can independently? And around decision that free then buybacks your if last recall did is OPEC+ the now and continue into to Permian do, that year strategy both strategy resume project of XXXX and your guess XXXX, the to full factor shareholder and correctly, concern that TCO is remind of project from, to kind as when flip up flow in a is running? OPEC+ what is First Thanks. you confident clarification or there those kind strategy. as the fully the production secondly, were Are looked of market to I your FGP. just going cash you well or

Pierre Breber

Jason. second start one. the with Thanks, I'll

free flow asset guidance cash haven't We level given TCO. for

between the up from of know, shows the lot loans we'll comes as comes a still ownership starts increased it that a right part Tengiz, will flow XXXX. of you part Tengiz. our and annual Company's of flow dividends statement, rolls different from now cash. as big It's in cash XX% get interest as both from absolutely free You're a it's A up. lot TCO, repaid of back. that's project and in And but capital see guidance off That also of Permian, the the cash you from the that

all. free we've more to the And So we there's guidance Investor to we for in you included perhaps can flow closer Day. startup, shared, get I'll in that nothing share our a overall specific as you asset-specific way but that refer our it's cash that

are sustain over share In cycle. terms criteria; as can we are confident OPEC+. variant comfortable uncertainty it sustain again, the I of buyback, at we we an can uncertainties it Delta the and the cited, those we look There --

in into enough don't we talking if are performance has actions assets any going we've have the about, and the all is are confidence have interest. We insight that OPEC+ that. So an But the been supply their chemicals Jay the greater to doing that for that feel It in recovery downstream program uncertainty. take that we've debt this investments strong it. the economic world, really around in the good in pay that we on and multiple the that side the down years in this seen place and seen, discipline seen, we've that companies from we country while we're can keep also

Jason Gabelman

Thanks.

Pierre Breber

Jason. Thanks

Operator

Sandler. Todd next from question with take our Piper Ryan We'll

Ryan Todd

that the said towards target access some conversation earlier. of cash underlevered in retirement you floor would is price one of is, balance point debt a this of Maybe absolute a from at point likely skew net I buyback of even of efficient sheet debt growth? point to the that view, from of or where start the level some a an from like Pierre, view, those is on you're terms it to 're you XX-XX% either the know, below there debt or start an debt level where trend feel target. of you from that with on debt-to-cap oil like quick point dividend view to But debt sheet Thanks. the follow-up -- times balance more

Pierre Breber

won't don't range, fast I the mean, that with a that we I've cited I one number, there's the cash the flexibility flow program, generation. have I XX% XX% and it's why hard the cite and a lot with which years undoubtedly, would long is have capital mean, but arguably at reason projects number a wanted you Well, our higher internally. fact, -- there because dated no capital and is. we quite of had wanted lower dated long of we have had level maybe than and because X bit in have -- debt would we ago we when had, had would to commitments.

talked we the being a is near as away range. get earlier, to below our -- from couple The more of it. of vast or about us like That program We I'd the majority years much end comfortably Tengiz capital higher gives completed. this flexible. to are, getting

buybacks. we the the the of of you're If That's share flows, and out, our question, If we we terms absolutely in asking comfortably we XX%, below possible. look ratio increase get share range. cash history showed again We buybacks? would can the our increase the debt Yes. our then

at. we've We do us We've so thing. at At the continue it and it, you'd it. rate it expect to haven't that the decreased to we've kept started same increased times,

Ryan Todd

a Great, Transition on separate thanks. maybe Energy activities. And follow-up

active to gas. natural in continued be You've renewable fairly

including diesel, You've or we detail thinking done it you lines don't a sustainable or for as mentioned asset more the about just steps lot but yet, and modest a renewable of are coprocessing? consider you renewable on you smaller look an of the aviation focus and down the diesel fuel? opportunity likely something like have amount. maybe Would potential how some you know doing I conversion meaningful, set co-processing on

Pierre Breber

co-processing of capacity just share Well, that up by have be a X-stage at again, to The to it's started the so XX,XXX up Spotlight. a we day barrels process, it -- will a we'll year-end. more

second We'll a give first efficient. phase, the and the FCC phase it co day. refinery U.S. another capital of to first this the did it's through produce kind process up on part because very We be will in that in we capability the an us XX,XXX way to So as barrels brought phase. to again,

kit; pipes. literally leveraging We tank a just it's existing some are and

a in Renewable growth There on on markets efficient the can growth just like in commodity this side. also side. conventional demand capital undoubtedly so the in is And products renewable diesel we very do way. There's the work markets do. supply

going be to to continue disciplined it. we in so how approach And we're

And so talk us XXth. competitive this again we about Spotlight is September it more on the think you'll and I project, when see from a very on

Ryan Todd

Okay. Thanks, Pierre.

Pierre Breber

Thanks, Ryan.

Operator

take We'll Sam our from Wolfe with Margolin next question Research.

Sam Margolin

out your be marries context target sure on Thanks. LNG gas some emissions below and I'm a would for with very high How of me as high. Just your I'm there an asset LNG per you? it pretty in but carbon. targets. low official prices basis, There's unit prices opportunities just wondering that class are in how are are the one on on LNG broader on globally, very Chevron's position

Jay Johnson

to is certainly continue of this the And all the the That's that consider to opportunities play gas important a think It's we for make Well, to production lower-carbon at given carbon It's continues LNG portfolio, and look look its critical part lower part those operations efficient when we of more and we overall transition to to numbers an be in footprint. our the role -- upstream. intensity. a We is as world assets important you. fuel. natural of an fuel. going we've

We'll are focus at of to we going stay opportunities facilities. age, existing made our increasing already incrementally continue to other to through we focused in so on we've production or look use But we oil forward. importantly, capacity most leverage existing our oil the And increase higher to want returns to upcoming the facilities. facilities age that investments those on to go as

a it premium but it's the So part place. or portfolio, special of any occupy particular doesn't

Sam Margolin

Thank Okay. you.

Pierre Breber

Thanks Sam.

Operator

with last Truist Securities. question Neal comes Dingmann from Our

Neal Dingmann

is just protection. Good morning all. My on really one question

use past, you interest guys You factors. the swaps rate other in and

worries Thank lot strategies, as where protection, the all rate mentioned, I a Just just hedges, how on got and your wondering wondering, you that just about swaps, there's various these you. and balance of -- nobody wondering side. sheet I'm about obviously, policy all. a you've But days discussion think interest hedges above. fantastic

Pierre Breber

tend fair but short-term commodity terms have And our flat debt variable side, others, hedges. undoubtedly price debt, we on in debt, we or of fixed. have term paper price have I and the except for Well, that's some don't transportation, we but commercial a don't also a we have, amount mean, to of debt commodity

think than interest less a our I want so variable. X%, shareholders insurance don't we think say, very balance for for very you we that. and pay half credit, probably is don't mix But our as lot strong sheet, average our we cost and strong have around is

to certain prices I shareholders upside strong the they sheet. think our commodity a and Neil. then so they us enjoy want balance Thanks, exposure to want maintain

Neal Dingmann

No, absolutely. you. Thank

Roderick Green

stay for participation time We back interest everyone's to the in like on thank and healthy. your call to everyone your Please safe would today. you. I Chevron today. appreciate and Katie,

Operator

Thank XXXX you. This Conference Quarter Second Chevron's Earnings concludes Call.

You disconnect. may now

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