Chevron (CVX) 29 Oct 212021 Q3 Earnings call transcript

Company Profile

Participants

Roderick Green	General Manager of Investor Relations of Chevron Corporation
Mark Nelson	EVP of Downstream and Chemicals
Pierre Breber	CFO
Devin Mcdermott	Morgan Stanley
Neil Mehta	Goldman Sachs
Doug Leggate	Bank of America
Jeanine Wai	Barclays
Phil Gresh	J.P. Morgan
Ryan Todd	Piper Sandler
Paul Sankey	Sankey Resear
Rodger Reed	Wells Fargo
Biraj Borkhataria	RBC
Paul Cheng	Scotiabank
Manav Gupta	Credit Suisse
Jason Gabelman	Cowen

Call transcript

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Operator

Please standby. We're about to begin. Good morning. My name is Katie and I will be your conference facilitator today. Welcome to Chevron's third quarter 2021 earnings conference call. participants a all mode. time, this are listen-only in At a there and that After remarks, be time. question-and-answer at the speakers given will session be instructions will If call, the anyone assistance Instructions]. conference should require [Operator during

conference a conference of ahead. the the Chevron call As Mr. to this is recorded. Green. now over Investor I of Manager Roderick being General Corporation, turn will Relations go reminder, Please

Roderick Green

call Relations I'm to me the Thank Third call. CFO. Breber, GM 's Mark Welcome are Chemicals, EVP with conference Chevron Downstream Roderick you, and of Nelson, Investor Katie. Earnings Quarter Green, and on Pierre today of and

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

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

to turn will over I it Pierre. Now,

Pierre Breber

flow of upside sale several price the quarter earnings million we prices, the much -- higher earnings last higher ratio repurchases. most $X.XX Providing more Company billion. record when Appendix almost leveraging billion up, quarter, we're are X efficiency we included reconciliation ROTCE can is lowered the costs more to on adjusted Compared Downstream We resumption especially X third in found margins, our when primarily increased production priorities, Compared below recent items: well to more in been XXXX positive low earnings XX% $X.X up to managing reported billion capital upstream Upstream and higher prices allowance. which the periods, realizations quarter other $XX operating and be us use cash share, up of were are quarters, resilience this primarily were versus and share. over charges operating earnings non-GAAP exposure. oil on essential free of to than presentation. earnings COVID, third net $X or lower primarily results and adjusted cycles. generated positive per quarters efficient. a XXXX A down, strongest barrel. evaluation than commodity capital corporate variance the of efficiency last to refining share due LNG timing past pricing This are $X.X flow on markets and year; costs Roderick. quarter in through navigate and The financial volumes. and earnings Strong per reported Cost the previously strong. Adjusted as all and one, had has $X.X with including are and and asset assets, portfolio over enabled was The $XXX of and debt tax than or than were before cash to highest related Adjusted XX%. deliver $X.XX Adjusted evident our the deferred so million. marketing higher on Thanks, to increased margins. was effects billion special earnings earnings settlement measures Adjusted pension years. Adjusted gains third of in quarter's greater $XXX

year-over-year sales. asset with effects entitlement over to I'll price-related now Noble acquisition it curtailments, production Mark. due offset X% by lower equivalent oil Third-quarter and increased and to pass partly the

Mark Nelson

sales and years. it jet downstream delivered than In with product Demand fuel recovery adjusted for Pierre. of earnings expected more strong, best X international Thanks, as and in chemicals, our we our is and while cost we focused reliable efficiency environment And the improving value operations, capital control. to what helps, can returns. drive higher gradually optimization, chain Safe travel returns. and we're market on

prioritization maintenance data and improve of increase asset our technology in adopting robotic planning, maintenance activity, scheduling, Some include; leveraging actions margins, like digital new flexibility using inspection to examples of and self-help analytics and tools procedures. to

is is also decision, response cost CP feed higher that mixed and disciplined advance XXX% under budget. market schedule, guidance focus a of self-help During the ahead cracker II final way reached U.S. to towards project the Project, to meet positions returns Chemicals. The our to Gulf Coast Chemicals Chem CPChem continues design a investment and the GS benefits evaluate on capacity the Downstream long-term to with Investor project. line. to cycle. We Caltex and reduction. for that flowing drive expected (ph) Day this returns believe of bottom in is And We're a XX:XX:XX] of through to fundamentals already chemicals. I Ross that attractive strong, earn Lavonne longer-term in we to Project highlighted track continuing as performance on [inaudible in current in unit to conditions keep its while March, continue

meet sites focus of advantage our forms acquisition now now expected to you, to needs a curiae, of expand Rick coupled enabling capital customers' end supplier earlier our Pierre. The delivering an customers position Biogas and investment Mark on in efficient acquisition Refinery to with oil us regulatory products, announced curve, California. And spotlight, are approval, also our structure, XXXX. retail competitive approach Pending into next and continues meet and Segundo Group supply project Novvi's transition Neste's feed business to Airlines we of the its execution. our renewable the We're oil base Delta anticipate gas capital, needs Back we choice agreement low first first the interest the We first sold and Since and produced cost its through from future. the with the provide at gas to acquire and fuel strong Our beyond American closed energy network brand. month, offerings. base an And quarter aviation natural cost in our CNG be this Kalbe Chevron El stock, the to we is be to base all X of to to partner of online. LAX. bright closing XX partnership, sustainable equity

Pierre Breber

scope Zero resilience change portfolio updated Net XXXX XXXX Zero carbon aspiration intensity, And report, and use website. A read climate portfolio and an latest for our stress the includes that scenario. X which X called released new our target 's emissions Net recently includes I scope IEA Upstream We tests on X scope X emissions. to of X from and everyone available encourage 's report a our Mark. Thanks, and Chevron under products.

looking plant Now quarter, gas ahead, lower turnaround production due in Equatorial the fourth completed Wheatstone, planned was the Guinea. repairs we a at week. to which And expect Alba at and last

Rokan ended PSC In addition, of from averaged our Production equivalent in XX,XXX oil Indonesia in August. Rokan in year-to-date. barrels participation

from in years, We're cargoes cash customers TCO income as sales and to due items, the federal also million return refund. heading increased capital quarter, items. a into several expecting spot cash our tax three There of LNG, $XX increase We these to no winter. out Australia expect from first discrete fewer dividend deliveries P&L JKM earnings long-term are from 's -related around Angola of spot quarter impacts from -- from three third

XQ, guidance we end of shares high our During expect to at buy range. back the

flow, lower-carbon. Permian, towards To quarter, CNE lowering due $XX we year, the capital billion spend make continue guidance we're progress in our to next wrap non-op primarily our COVID to Finally, billion, $XX lower return up We're to continued CapEx full-year project the of efficiencies. deferrals efficient, it higher expected and to objective into -related into executing lower-carbon operations, a I and value of our actions generated businesses. strategy over to and that's capital to taking are We're cash the now future. Roderick. will With intensity record free straightforward to cost and that, grow the turn more deliver and carbon lower well back

Roderick Green

remarks. prepared our concludes That

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

open Please We our your (ph). the best Katie will do to to questions. up all lines, get

Operator

Thank you. [Operator Instructions].

first comes Stanley. Mcdermott Our Devin with question from Morgan

Devin Mcdermott

results. morning. on Good Congrats the great

different for bit the to detail spending sounds the more So I just Pierre, little reduction capital question, you, my I for a is guidance first like year. it's factors. for in mix think a this on It wanted of ask

of Some talk non-op deferrals it's of year, some whether spend. XXXX bridged the not bit about deferrals or mix impact these little deferrals of and more it's us for gains. He's planned also or a Delta, efficiency detail a these and how next

Pierre Breber

we to billion $XX of billion, guidance of $XX $XX our That's from CapEx quarter that billion. our to from in second lowered and We guidance had billion. Devin. $XX revised our Thanks, budget the

what's from some guidance of -- the Delta our guidance fourth the XX% and continue spend expectations, below in $XX see CapEx is expect revised portfolio. our last XXXX our CapEx did quarter And range to in Permian The to a increase Hurricane about and non-op So our next through efficiency end wave. the continue deferred in not we major see have -- across capital billion low to across is seen quarter, guidance. year It the we've year. higher CapEx IDA $XX -- to continue while that the do billion. and variant project we for the changed in then We midpoint Permian tied next change spending -- of and the capital does

these manageable. again, the budget, would for I we're about the is are from efficiency half, same original So $XX and at results think cost-savings think deferrals and capital. billion I half very a you what would say of deferral less can And -- capital getting,

Devin Mcdermott

returns. And sense. a cash follow-ups then lot makes on it, Got my of

strong free the cash very So in flow quarter.

my bottom - further cadence of Your increase you're target to question buyback the run pre some that increase in buyback is of good of for the things closer the to are debt what end to the now It's back your to guess in COVID I the see rate? target something looking below range. is, target XQ,

Pierre Breber

third buyback that's quarter. net said, ended debt from XXX as a our quarter restate high the or at end little a last comfortably so quarter, range, under I'll XX%, down quarter annual and said, Devin, range, when now, net X a end As -- in of was the the second at of the X below the bit billion XX%. increase quarter. fourth you the ratio We XX% ratio, And rate is I with million guidance for Chevron's debt we'll

below range got debt XX%, So where approaching level further. buyback fast the increase but could we just a we we're net

the Devin, know this, years to we As maintain our intend a I you reminder, multiple for know, buyback through cycle.

Sheet we're Balance range continue will turns. below our cycle if our to that the mid-cycle even positioning And enable us buybacks so so

Devin Mcdermott

Got it. Very again, helpful, strong Congrats on sense. quarter. the makes

Pierre Breber

Devin. Thanks,

Operator

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

Neil Mehta

market. echo just to Yes, Pierre, results the you I global about to great gas here. a to take moment want talk want I

would had around just there. that would How pieces of out lot your years. to time But at as there a playing see the this one other think -- modeling supported lot of I you timing the some in it earnings. from but thoughts later advice just a be here? over looking it And you that any gas any spend portfolio. effects looked be like spot later would cargos unwind do You it would the and quarter relates moving on,

of thoughts a your pieces portfolio. So moving there, the lot but cash on

Pierre Breber

Neil. Thanks,

seeing been in on more First, and does a associated that gas We've I'd It we high natural seen demand say very impacted particular, through just supply are has some gas prices. feel structural. than cyclical activities. part gas, in in supply by lower slowdown COVID resilient

something I we expect over markets a So out, bit and markets seen supply we don't We're that and work. little commodity think pricing the to seeing right rebalance expect demand time. seeing past a it's we've and in will that now,

very have We business. natural a gas strong

through We in a America, North in position Africa. Australia, Noble have Energy, Med Eastern and nice

do not much in we're we that increase the can And supply. There's really there. so short-term well-positioned to

size. on in a activity there. will that could increase We Company have [Indiscernible] (ph) impact our a the have and But of position modest we

think I of positive in phase think for there. the of expansion this medium and up signing Eastern we're is next, customers particularly opportunities to and expansion kind over Med, the next I longer-term, working enabling and

supply for expand So and we're positioned looking it's certainly to something into that we're well it.

how positive then essentially, to a in are of And oil-linked related terms overall a the we was customer our went JKM quarter, contracts the order portfolio we so with quarter. and was that try that's do clearly linked, things, And various and a paper, along JKM we yes, we that couple which have have to we to tied we pricing, of to in really have timing and trading pricing, effect In the mark-to-market some that, manage up supplies did match LNG.

Now, going to quarters. be against that's some deliveries matched physical in future

because that's we was earnings of $XX just towards in last timing XQ that see that quarter those LNG, the when cargoes. fourth cargos guidance the earnings guided on call to are point going of delivered. then we to unwind expect physical And And spot Australia We had piece So increased really have from XQ make spot effects. are we cargoes. versus million to that we

more actually and on Wheatstone many their the plan five of heading -- up we'll delivered when cargoes you and And operating, Hemisphere, winter spot. complete. because our of We winter. heading into turnaround But into trains pick most nomination of have is it's think in all have the Northern our quarter seasonally fourth contract customers the

so higher JKM takes contracts long-term are And higher have the And cargoes they the that which getting under will we means oil prices. will linked. fewer

So fewer net higher XQ, versus cargoes, prices clearly that's in about JKM, XX benefit XQ of million. a

have Angola so can LNG about -- We and think spot you both also exposure some or of Guinea, Equatorial million another our operations. out cargoes from those XX so from and

So, long quarter. breadth full sorry the natural answer this it's a to cover gas of

Neil Mehta

a that's moving of pieces. Nah, lot

then low And Now, on well great. as initially [Indiscernible], you're now, looks think, really now, like CapEx XX. that's year, I as XX tracking this XX it

that talked about. would that capital about assume up the And should that -- set year, that suggest any I Next be is end XXXX this year on it remember, the of to is you'd lower range? pieces you XX-XX lower think you CapEx as the that spend moving fair Are Is range if level? spend we the

Pierre Breber

because see at activity more activity will the to to in see just through back-loaded levels X quarters. $X.X to the completion X And third higher the billion manpower capital crews. $XX winter. more billion -- And billion us rigs, we're then maintain that to Tengiz. going You Permian, increase tends that you'll have back-end get fourth We're quarter $XX to through We'll peak loaded. so in at be

have milestone in be that exploration project some we'll drilling quarter. have we fourth we the So payments, wells

increase an quarter. in see fourth you'll So

the the of to being will our $XX like fair at XXXX normally we for and be December think least bottom guidance in billion of Again, the gave just a think this guidance it's the organic end of towards midpoint off at we the the will within guidance. increase year. even we of XX% do. capital, I of announce guidance it It'll the that's I budget say be low

want but range. end to guidance So, lower see again, expect don't should of to us I you that the that, get capital in ahead of

Neil Mehta

Thanks, guys. stuff. Good

Operator

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

Doug Leggate

Well, thanks. Good everybody. morning,

Pierre Breber

Morning.

Doug Leggate

help bit lot and overall tax ask thanks Pierre, hate this is got Pierre about has lot for and I in tax. we've questions. my taking The got to me that but more U.S. of been profitability housekeeping thinking there's way mix you've little obviously here a Mark, question, a the and I'm changed changes on out post-noble, to with a your rates. a

on going So going saw help I'm that was issue rate unusual can carrying going you or the me is rate mix your going we a too are what's worried on tax forward. tax as we sustainable over something tax a because there high up.

Pierre Breber

quarter in benefits real. are third The tax the we which cited

on a it of of able the at projections that us a we transaction, a have expire them. is they -- time use based time, through certain the It attributes number tax after they would allowance performance and this So to deferred without closing acquired of asset. Noble. expire we At being was put years, thought against these valuation a taxes because financial

financial in Our were third stronger that we so actually much able the them performance quarter. to is use

reduces a our that an basis. and on taxes So cash on earnings both

of tax So all it's It's that that a the and included I an tax other cite assets that condition. again synergy you was do of have that, that That see could all to recur, forward something our again, we'll it's based would Noble differed going not necessarily year-end, in not But, a attributes change very and from something what recur. on segment. expect would value and in not real synergy at is additional review in will something estimates. it's our was

Doug Leggate

thanks. to helpful, push was, And you I quantify our really I right? then what suppose contribution can noble That's

Pierre Breber

that Well, the segment. primary it's variance in

So we corporate talked about tax lower charges benefits. and

Doug Leggate

cost low, of think you see growth. think we'll the going My When very, which then. going as follow-up back versus obviously about sheet is it ago, right. way stays obviously years XX:XX:XX] balance of is really you quiet there, if net a is on debt projects guys per-share the All back dividend issue, [inaudible X about leaving and this debt, very but you lot

So I'm can the Excuse them. has now the for Exxon refinance obviously, right think, for to. trying below for what you to that head about given up around, is XX% to right very level been obviously of level you, at kind that, level talks your XX% so me, and economic level if you buybacks, step chose

Pierre Breber

net be we that didn't through the target hard but to When us on ratio, where we I XX% cycle. times our to debt -- could became it. question this place XX% go a I a CFO, And is be there answered good we for above have

when stress the that did at XX%. stress in dividend, Company only we the a to our example, maintain investors our could confidence show test, $XX test net For industry brand two for give showed years, we above ratio our the year to last debt go

buyback appropriate. close when So to should increase But mid-cycle, now, than to we of that's buyback be we got We XX% no do a be range. prices to above We end where low below not are our where we with are. debt. were we're our net we range less guidance. And and before anywhere need could -- approaching fast the the

even, and increase the our $XX a XX cycle. we This in over buyback in it's - the and XX that we maintain conditions, rateable up be is our we'll prices years. showed since the back below excess excess buy to generating our over last that's cash and form through capital these shares is where we're XX% All cash well a in of All years. very that cash and of We excess dividend at. sector. to dividend. COVID, where under can And biggest again, dividends. that So returned at that we're cash the billion we at close of generate $XX And now, be will time rising pre the shareholders X

buyback debt maintain we and cycle in to be when time we period, can maintain down. shares, that into means to it if turn off rebalance through we the doing cycle. it which continue the when means we some we for when when buy And back when will of so the it and and turns, intend cycle fact -- set rate, a we'll range, back does the That

Doug Leggate

still appreciate we year still for hope answers. last last not scars it. because Thanks I year that's Let's your soon so anytime from -- is much got Pierre.

Pierre Breber

you, Thank Doug.

Operator

next Wai Barclays. with from Jeanine our take question We'll

Jeanine Wai

Hi. Good everyone. for Thanks questions. morning, taking our

Pierre Breber

Wai. Morning

Jenny Wang

Good Dave's Devin's guess plan and morning. We the through is you getting price wanted to multiple on back which to I Pierre, follow-up already to buyback maintain question as question commented that buyback. the well, years through the have great. cycle, you

we goal started. is the it's prior think reduce buyback once remember to that commentary the have not I to

So more on check of strip just that ratable, we the investor to tremendous any know are that versus expectations is and like sounds wanted amount of free your ratable opportunistic. versus and the increases. buyback think you way, running more that seems in it trajectory also It flow but cash there's a alongside We being how that dated. coming backward

So trajectory. we just the wanted check on to

Pierre Breber

Thanks might Janeen, back not I right them. opposed that ended you I'm tend And We started. we be never have at Look, the to we've that. to history, our if to you them. think buyback rate program decreased that look haven't we a increased

we we're the quarter increase where top pre-Covid. net approaching middle in the guidance we've I shares quarter. using in We're And range We level, resumed as of quarter fast a first of range. back range were we said, -- debt the a of range. range. the the using have the third in since that we're buybacks. year, further. last that We bought And We the now can the It's first

when cycle. -- So maintain do when ratable shareholders, and the and our views no, is the Investors most our good common where it do being it times on it and investors, times our we are buybacks through have is consistently, have ground, are tougher. the different focus cycle through on

that a so commodity level we have that cycle. price rates it a at we're And maintain the can through setting we confidence

Jeanine Wai

for you thank Okay. Great, that.

potentially we capital allocation. about little a you're is you bit Can and question are seeing you Permian and and on talk beyond be much in attention, second the demand, other the Permian, close you. Thank really bit short-cycle on it little supply increasing to laid just about guess thinking know that outlook I And plays? Our the out? but accelerating you've inventory on maybe what how on that, get in of also a activity doesn't could what already you

Pierre Breber

quarter fourth We're going year. next to increase capital and in the into

And that additional this $XX even and the where billion that'll our range to so represents Permian in of seeing expect year. end bottom from additional Again, a the they'll rigs in crews. We'll guidance locations. XX% at fourth we're end the least other said, be in And as I be up see X increase quarter. completion Permian, X we in

lowered We can of are below non-op again, to reason that's also, see pickup, bit the other has Non-op see And beginning it part guidance. our we in our a expectations. why been you a basins.

changing our a have we're investments, with not We but of a range. guidance number CapEx portfolio overall short-cycle great

be Our that XXX,XXX very would a and guidance day. carbon X we overtime. can -- production we production from X on as increase mode of shows anticipated it barrels grow and that And grow that recovery resource that a efficient outlook a we million an development showed barrels of but Permian the outcome we day can CapEx also to year that would efficient capital a a in

and out do had other efficient So And we're the of our cost playing is we buildup Permian planned way we're parts in executing our in that doing. the what plan. in to we what and going very a in no It's a There's way. activity to across change we're do capital seeing really portfolio expected. and

Jenny Wang

thank you. Great,

Operator

next our question from Gresh J.P. with Phil take Morgan. We'll

Phil Gresh

Pierre. Hey,

I'm question covered capital Back over greater XX that little bit around excess this the years anything you excess the year, curious area lower, has billion ish or seen through etc., cash in if to with? talked is make circling about still implicitly March, having cash that believe. an you be would suggesting just kind a - be you've would of more. at or in around just XX performance XX, X in I the here, changed that, that break of that you're piece progress dividend than comfortable you where First billion think XX as with moving allocation brands

Pierre Breber

where right? oil with. America, Downstream area seeing We've Nelson North prices just an It's both well. Europe, comfortable gas constant, & being We're perform keeping pricing we're That's International very and Mark about 's Group LNG. talked strong in natural Chemicals

things held constant. So those aren't

So if you look then at this is quarter's bit gas mid-cycle result, I certainly little of think margins, a margins, you'd assumptions XX for see and our prices, at. lower, oil refining break even we're chemical where would be about terms in break natural an even but

that our But break changes Now that our and things other intact. covering course that it's is math of even over dividend and still is capital a -- up time dividend dividend. because our goes as

our we're and are and We are lower, showed lower capital sustain is a We this were more less that production and our returns a can better where we costs efficient. higher, chart carbon. that years deliver us much grow higher ago. Company and helps We with than few capital enterprise

Phil Gresh

as mean down it. question about there I requirements, being some that you'd something that any Does Thanks. reports cycle given wanted commentary, there? in about think terms Got your capital just And how of have you follow-up future do there. commentary then to reserves Wheatstone, on project this? get your partners were just a from longer it's a written

Pierre Breber

It's unrelated to Chevron.

and the Wheatstone the the the world where different Australia in there The recall, reserves, you were maybe came Xst was project resources Project if from two ventures. third-party. joint So

at the now so Woodside. time and was And it Apache it's

It's plan supply third that affected. a fourth fields being have it more quarter of essentially it's those of had fields and an write-down. covered We well. that said, There through I contract of quarter. and a told not Wheatstone have -- And we So through. of completed -- JKM, And in we the higher, that's so is quarter, fields Australia share oil to all and interest as week, because the said portion are very Chevron also facility lot oil-linked this our X-month supply it reserves Chevron X with expect lag. they announcing was really fields not last activity. adjust to have to does a processed those their they was the Woodside again, Wheatstone, we is that reserves operating into -- them focus that with Chevron I through doing be turnaround Wheatstone only as then those a the cargoes. that trains early unrelated are expect X-month on are prices prices will they prices on of and adjust -- our but also a higher course portion that oil

Phil Gresh

the for thanks clarification Great, there.

Pierre Breber

Thanks, Phil,

Operator

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

Ryan Todd

you and your Thanks. back. level question Maybe event a transition high energy did spotlight a while little

being You of the XX% said a share capital close businesses, of run budget. the capital budget local at close to to

to your of similar theirs the U.S. raise here peers one a level. You've in seen

higher seen think much low-carbon the budget Is as feedback then, think of budget a to of to but the increasing towards is that since -- If as or you protect you've to was returns the be was our feedback that you do that enough, kind pragmatic going capital couple months, going received that that's you're businesses creep XX% balance last see view XX% the over between allocation good about something of dilution going too you've where forward. of of of kind see view forward. going do pressure do you it not you to

Pierre Breber

little to I'll talk some in our a of fuels activities bit renewable and about start ask his I'll portfolio. Mark then

growing lower abate capabilities, leverage hard good to That's assets, lowering And and and operations low-carbon carbon. of customer shareholder target the have they the support high our the We strengths, cannot that intensity in sectors electrified, both then alignment our of for easily and strategy objectives carbon our traditional be businesses our that relationships. returns, sector.

travel, is heavy-duty emissions, this like is industrial to go XXXX. that transport. The billion of some air capital things to $XX So connected up ambitious targets pretty

guidance. tons carbon all year that per storage. and of That's So hydrogen, capital capture XX million consistent annum tons of per XXX,XXX with

are have a are in done not competing Mark of the more but about to renewable we targets. ambitious versus, mode opportunity, bit that his getting do, let's on ask targets. to It's They talk So fuels. CapEx me it say let easy lots and these execution on portion of challenges,

Roderick Green

could a question, Thanks the example. for tangible use Ryan. real I

about think is important Southern comes capital critical have the that. sell in renewable We've We've getting and really biodiesel said an example margin, we're to our all conversion. that to to are Refinery appropriate California, in You diesel. El said hydrotreater El are close say us the our be of of We've diesel in In be a it feedstocks, it the and renewable things at our few ability ability XX%, of to Southern over when of already increased kind California. for XX% to the us the Refinery the Segundo -- successful. to ability sales efficient Segundo to right let's

have importantly, and Bungie finally, supplying joint the perhaps Segundo speak, our yet working and they're And us where Refinery. most venture, we We definitive El as towards agreements we're already at

Mark Nelson

diesel pretreatment annual any a renewable including can catalyst system. less transition requirements, that's expect We the our in of us diesel than indicated in energy both spotlight to do if particular capacity. in And gives units dollar gallon be that of we believe necessary. conversion ability capital a And we for we efficiency. leader conventional with produce the that to per our change, capital that a hydroprocessing that's and just

wont you back and next a be really our we and it, working hydrotreater at Segundo and and did Ryan. about needs, were towards year. very easy, we very very of full the here good investment renewable progress piping where that end would step conversion for been by Thanks metallurgy money, That over co-processing work done So think diesel capacity barrels we're team making when test for but diesel is tanking able to that's that working and hard a El and question, a little the that on the of you day. XXX% be now initially XX,XXX

Ryan Todd

talking opportunities. follow-up your gas you and a Great. Pierre, Thanks, earlier, of the Eastern some Med Mark, you were when mentioned, where you maybe on mentioned about comments market

it targets to your the may Noble, in like in Med there was In longer-term talk while. I what thoughts much de in pipelines about You everything sense and versus the that conversations Eastern it opportunities opportunity was development? was and to for little between mean, the and project buyers floating most Any base, operated Egypt, with of that to of there European makes when shorter-term past, there haven't opportunities. and an of gas bottlenecking LNG, potential -- it talked on a the look a - it's by in sorts all whether

Pierre Breber

mean, there's can is changed done a it's commercially this are want still show looked tighter. very in All some the way. options point much I low-cost so and sensitive, hand in to expansions a be Ryan, now is really resource. can and expansions the table, some was gas that don't larger any that our geography for looks What's that great done I that be time. and over There's ago on is oversupplied a year that natural

as engaging. natural on know, us getting think overdone up. be better to earlier, you dependent it as I and said probably customers so but we gas expect now And I more customers to business markets time are really sign motivated correct, for to the internationally it's a And is is

So great flow has from closed opportunities in we backing is Noble. cases and it's moment free a that coal, out it many expansion positive cash resource the

and a to have now it's in well-positioned asset it's great So opportunities to just future. the grow

Ryan Todd

Great. Thank you.

Operator

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

Paul Sankey

try your your just of that normalize you noticing your QX be that. long-term customers is how much as in LNG volumes will the long at we a or going comments If could I'm contracts. of the parts spot? pulling given with different further somewhat moving spot to of everyone. past exposure go be it take Thanks. just during said normalize that you are be that where If course Hi, into the could that I a of Would and year XXXX, -term if could so XXXX, result versus Pierre, you. to to part and and have so. exposure your there's many it start possible over

Pierre Breber

that's cover contracts guidance give on are too when have take term a begin will that that year, fourth-quarter little something long change higher we why -- we've around the a as waiting bit more for items, again, call we'll we'll just do it quarter consciously of But that on it notionally bit XX%. call. this next but we so a long-term will our that's a very will next Paul been little guidance year, in contract we full-year provided number fourth-quarter

Paul Sankey

put if one everything that highlight to consider aware Okay. of that just buyback there we we cash a are items regards I'll move XXXX, with into other terms be? Thanks. how buyback any of and could quick modeling, in or in something I be into would flow, free assume much more. do maybe should slip going pension of to that I you we've on But a few just to your

Pierre Breber

Over did the a really It pension low requirement time dividend it in funding be last the cash rates vast Corporation a long sounds will rules, very excess the form majority one quarter, is the Pension fixed time returned interest and a Benefit buyback. supplement of time under We rates. to the to shareholders tied higher interest was year-end of the ago. from like But the year by Guaranty on ago. the

so so rate filings. higher we it. been. underfunded a a and little Obviously, terms place our variable our pension And now, be, we're supplemented have bit you'd we guidance borrowing, has on a therefore, in essentially, of paid our and to little that's pension called were why have cost in interest different a than and that's they in higher, we much And XX-Q interest expect of contributions rates would provide

on would I So end. that anything expect not

increase to biggest Sustain know well. the in grow since go up the priorities, if It's again, and them Paul, pre-COVID, our you financial you the dividend. sector. XX% So,

be a more it's guidance the very was up, to going range it going capital Our We're guidance change efficient debt. and is in down where capital to pre-COVID. a range pay it's no from lower little and very and but guidance tight

can we're range. where said, approaching we our level buyback increase I As fast a

us cash, clear over time, very sweep maintain is want are the buyback and out through to it goes that then, balance so excess quarter And they shareholders. a to the because We're to investors cycle. each going not

Paul Sankey

that would no guess I specials. mean

Pierre Breber

to you to time think ask Mark. for question the I it's

Paul Sankey

changing about we're any Pierre. Obviously is of in you adding lot Mark. Thanks. changing talk that also Thanks. Downstream? Mark, global Chemicals. this Seriously, and in there of context us, could more a dramatically chemicals? are how but the very Chevron generally down capacity could about know refining but we 's Downstream, shifted, Because how a see its U.S. you better. both and could capacity way know question, Thanks, I in take is in could I give shutting exposure apologize, general global if hours, the that lot capacity? house. two of say Downstream the where And secondly, talk the could you you and you capacity numbers

Mark Nelson

thanks, Paul. Yeah,

or the throughout Let's of the ranges here. capacity refinery the said and unused the side as degree have some proxy has conversions closures for Inventory, being the rationalization, business for start products. recover high-value refining in with of to need system. demand we utilized here. fall we either We've then margin to traditional We've

still that offices -- things today, gasoline, starting X be still closures to in tight to completely markets especially like with or years U.S. and -- open, means U.S. now. with of I some the traditional in which restrictions boundaries in much West Inventory and in think the market actually Jet to from motor place. much X even our the you're Coast, seeing see If itself and/or conversions not tending on find could that and you're some Jet come that's and even some recovery of demand could be of

If with would is given that ranges Southeast demand China especially up catch as to capacity as refinery we So capacity on perhaps Asia. those just happen the That's that Jet demand see some of a its U.S. catching that's demand to needs I rationalization the our is the Asia, moment. to happen, reduction, that. that bit up stopping recovery into starting falling in I in some some Inventory still the is some, means with for little that Asia there. with U.S.. exports of shift But say both behind well to of you to in exposure need

U.S., growth off type But of we're demand to to petchem be comment actually just over quarter of actions closer with get seasonal historic would refinery the to in the the side And time that years. getting would we have had next and that a considerable supply equation, seeing in we're few the over as into back the drop-off. strong run behind this then maybe, Asia. of to disruptions. And year for on in We good margins the preparing come high-level for the so half phase margins expect normal margins my bring capacity see -- ranges petchem a fourth balance

the margin And outpace We in demand, the expect so that we're cycle. that lower the XXXX, presuming to portion we're at cycle. of of part we'll on even be

means catching Hope your of to that a So regard quiz. to catch-up that there I demand capacity. period got there will be in

Paul Sankey

over Mark. You is your in major the chemicals? and changes Thanks. point Chevron any a just Thanks, of anticipate And capacity did. from view, refining that next there X you years

Mark Nelson

it this our highlighted that hydroprocessing for of get opportunity we've a comments things very meaning DSAF And to capacity. efficient we I'll taking transition didn't made certainly And this XXX,XXX we've we ago about a energy was that spotlight of the individual units. conversion call than do match out portfolio. -- barrels have you of what to decade next over our remember the day Other we about that that (ph) of will capital decade our rationalization,

Pierre Breber

Thanks, Paul. the have We're to one. to going next to go

Paul Sankey

Bye.

Mark Nelson

Thanks, Paul.

Operator

Reed We're to Wells going with next Rodger Fargo.

Rodger Reed

about in would and you we I'm how three stock that should buybacks, feed renewable to for ask structuring, think about working you fits the see going like Mark, some seen how hit or acquisition maybe balance Pierre, overall stories kind in about we've there group the over I'm morning. sheet. returns, and you X, what No you not Thank that good oil-based on and capital whether to Group time? I of just kidding. and and

Mark Nelson

Thanks, Roger. Yes.

of is the supply, that remarks, offtake prepared to brand we're efficient capital and Group for about mentioned III the qualifications, acquisition that As index-based appropriate very Nexbase the the in the it expand both Oil acquisition does of for and Base excited And brand reason is, -- our of a us it's us Neste's brand, what itself. Business allows offerings. announced and

first offering future. have about, over think Novvi offering oil for we line starting Pro-RS, a the for shared some in North specifically our And that our II+ to in talked Walmart forward. And about So we've brought Monday, the base of particular, our next And that in Havoline a base renewable we're of existing our Novvi the transition U.S. America, spotlight, online would going Pro-RS. Havoline customers whole brand running add we we've the in lubricant be to Group to II, that that complete Canada, think and that selling and have the actually line. Energy will needs I installer

of So offering. renewable our the that And something be gives future question, we're it the really creating Rodger. that supplier portion for can where demand for customers. the we for that Thanks of base us oil

Rodger Reed

of you've Gulf CapEx, back to due the out of some totally the Yeah, then makes absolutely. if of come And delays which could Mexico on we things sense. the storms, the referenced to

do the next As in out I there of years, any some any change you're or pay the sort development and of couple exploration, of should think the in that order to at looking look there to? change the to projects of is you attention we

Pierre Breber

of decision stream has steady with been a underway. is coming and recently a projects to have that which Whale final that we along. Ballymore went No, really Anchor investment

Gulf you Mexico asset. see low development return, very high a program. will So ratable of is a carbon

and intensity the that decades, investment been find single-digits. opportunities. and And lowest of invested a portfolio competitive business in carbon can know-how, we've attractive our advantages the Some in in have barrels for is

a I sort or going higher both and which that clearly think to can will project the a of returns forward that the of part in also project and Permian, carbon. attractive that a have you Tengiz, of lower but places very years, couple come referred is Mexico, in, have investment Rocky's on we the and going So you growing biggest to growth earlier, Do opportunities of it's well investing deliver modestly very other when project the are the Colorado, portfolio. is Gulf it's of we're get a few in

Rodger Reed

you. Thank

Operator

next our take RBC. question We'll Borkhataria Biraj from with

Biraj Borkhataria

have I Thanks questions. taking Hi. questions. for X my

was, the and because one. about been obviously able moves thinking counter-cyclical you've the manage most to of Balance conservatism make was Sheet, recent X Sheet, first on The the Noble your way you some your Balance just

if the are we're at but whether the then not so, opportunities part you Chemicals? dig plans Downstream, to Tengiz, any tool question a some all Given it's quite and good Upstream, come high through Balance quick it's years, published. about understand talk of on And Sheet, to the number although of now, a any asset is there out calculation And PCI -- needed then interesting the after could the there. any for to it's It's second you XXXX? accelerate the sales? of And they cycle or I which see can repayments know you to finally, those are in difficult hear that across just figures loan the actually and variances. thanks due into dividend comment say for

appreciate I there. transparency So the

Pierre Breber

Biraj you thank for recognizing PCI. Well,

to you out. because a I know to We and and so investors to could interest where is Our companies teams so that. will be it's to taking that I advantage check very others based transparent thank you use happy other and wanted for it for of comparability and that transparent hear was comparability data make it again, encourage reporting tool of on,

We a Let workforce. there. very we about TCO summer had targets as we me we achieved spring look just and milestones, lot a our we of full campaign back, hit a productivity had our and talk and successful because

we of had So I very winter manpower quarter with intend peak quarter. of which mentioned some caused third our But isolation we the level a full levels low the positive rates we're months. in variant workforce the And workforce. maintain Delta wave a ended middle as very we and to back the earlier, through higher to

vaccination have of make well-positioned workforce winter. XX% that we're so for over this We to a progress a lot rate

can cold be to because have get it there. it about we Now, thoughtful

be in during the work we're coldest indoors sequencing we're that can a done sheltered of month way that the So work saving the winter. a locations or in

guidance the but we an that and and in So clearly well no quarter to budget Things looking schedule, very are wanted second very there. to Tengiz in winter on going I of we're give in terms season a update. productive forward change provided

on clearly It give first quarter. Paul's with the we'll our occurred also to so guidance oil right. have call. of terms when In modest years, just dividend repay look but give will XXXX, guidance It's forward. in you're a something X did prices, XQ And that that's We that the that's on we question, will look, loan on see. like depend nice dividend, back last

when the XXs, when announced In yes, Brent we eighties. is the now low asset -- low sales, in acquisition, terms or Noble in Brent of acquired and was the

when And you or where course, so, are has assets, elements it's cycles, strategic sell a the in downs, a makes difference And and you of fit and timing commodity pleased do buy cycle. ups this transaction. it saw benefits quarter and very, Noble the were it, business, all very we of timing first the tax the We we the interest with doubled, and the talked cost that about, the savings. to synergies that and it,

a of weren't we So million savings. bond that Noble quite synergies $XXX And save are again, cost because A included we sure number our those interest not this bonds lot we did month. a that. earlier in can offerings in bonds, over of achieve was we'll tender

why the yeah, we we're a several a the seller's it better So I than market part reason now. market the buyer's to Company, contributing a different Noble view more market, keeps now years as But of so right were and that's ago. it's than a Company just

compete us portfolio. well you're our in modestly some assets seeing increase capital as And for so don't that

In the fact one Ford. of in them is Eagle position our

Noble a not Chevron was was it. that in So legacy legacy position,

scale the than would at purchase obviously was And for expect public now have quite we But on we higher to what have again, in price. it that's don't that get $XX, the and implied in position the value essentially we market domain. So that much buying the like. we

in just other Thanks, our Biraj. that for capital of portfolio. as onshore very the well We market, that a U.S. industry players, are have lot again, but feel some assets to compete on are won't we attractive

Biraj Borkhataria

Thank Okay. you. Understood.

Operator

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

Paul Cheng

good questions. guys, morning. X Hey,

Mark Nelson

Morning.

Pierre Breber

you, sir. to Morning

Paul Cheng

that's tipped for Mark, one is guys, the that for There's your you that you because time Refinery. Pascagoula Mark. Pasadena are here. quite and refineries lot a a you of first the in sale complement available The -- Refinery saying one-off, lot it's

aggressively want So and looking the add? it the that think at business already does how of to that the sufficient change you marketing, being I and the see are refining shot, you way capacity supplementary, you you of need been or end building substantial for And amount that that have in there for capacity some the of don't Pierre. energy so than retail with also have really back, that? up to that more years. any EV of all that business question is you a and trend And the transition, The guys in peers the your XX walk is US. going to the including charger And including have that and on second

impact the some idea LNG that if us you fall? say price give every to pay commodity And the TCO change current on any can the cost the about the you look Angola provide going that dividend like? talked how about You LNG, year payout how to is So assume that dividend. in TCO going the have Angola sensitivity and to oil price, you dividend, can both we that

Mark Nelson

thank Paul, I'll you again, the in them, for questions. order. Alright, take reverse

retail we question marketing. I you to have fuels. branded X a as and capital brands, selling we've And taken world-class our was second approach about really light think know, your

rating around of Opus means you world of to retailers often X we of our top by And that the the we who the fact, at In the specifically continue our that majority chosen that that owned list. is look and is brand. has at power are would metrics sites the brand see be retail well what

and we so fuel not our brand, have And our our generally capital.

probably extra you've We of also there, the one franchising offerings strongest convenience happen that to seen. retail have out mile

In our X,XXXth fact, attrition. we very site, little I this with year, hit very think

us customers. us to retailers majority to continue countries And delivered with customers stay and in connected it. provides excuse EV -- we're today, margin to our offering the need part allows of so have me, world, to as of that And with charging we and returns, limited we X still expand sustainably that offering partnering approach high believe and around the as our the stations customers actually that capital

of in have And forward Pasadena a general hydro-skimming system. look premise efficient us Pasadena. an that being your working expect. real question a very deal Again, across Thanks hinted the think of hold about future fuels in very, to efficient that renewable capacity, was, working acquisition and We're specifically. We're and Pascagoula and to pleased our able to have think question, our there's maybe with be Paul. back portfolio our focus. service our next oil second would on in have And very to of the today. us I Pasadena. that It we've to light really there And to in Your and opportunity specific about The all expansion gives for that processing hard supply because particular, area. to the and own we with intermediate that more course, it's refinery year. talking hydroprocessing shared going we've of portfolio for capacity that's refining fuels we tight and Texas-Louisiana of flexibility then forth that having continues the capital between processing the opportunity as stations we the in That's way, there. an equity very we crude,

Now Pierre.

Pierre Breber

looking or forward, guidance just spot Yeah return kind characterization returned Angola an Europe, sell towards of -- JKM LNG has both the and terms capital. capital. Paul, essentially and link our on and Angola of It's in And markets. does we on in into going cash, LNG, as international is a so flight just TTF me essentially oil accounting of $XXX let to the million guide bottom into say it strips, align. dividend, of ahead It's it's it market

That gas So our just fourth is again, question, Noble Australia, call full it it's a again, provide for the Sankey's guidance exposure exposure, to for LNG And pricing. XXX in our Paul Thanks, acquired asset include portfolio we'll in that return like million interest LNG, on another capital on the natural here Energy. be Paul. which fourth-quarter XXXX. does was with Angola Equatorial will nice will through have Guinea, and international quarter.

Operator

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

Manav Gupta

Hey, ask guys them upfront. X questions. I'll

the to even more you XX. chemical no, is, pick say the some be first margins right mid-cycle now here. $X.XX, the you bigger " we like could of mid-cycle So ethylene did that will we're decline, XX. could X, Historically XX the will though The be settle I'd on And players one mid-cycle are there chemical like out margins saying, like levels. XX, brain obviously the thought next more "We to years for still X your would the see while mid-cycle the above

to for the strategy your the first can value controlling -- first the that question your and RNG time. basically second the into is you is going associated the distribution pretty entire distribute RNG seem you chain -- through this you're question, And get you so that's distribution the I'm network. with So produce and wondering CNG if of developing

Mark Nelson

question. Manav your Thanks, got

to we years, X next of Which margin the growth the line on we So GDP grow bottom next terms expect see demand. as continue of X margins, to petrochemical to capacity the with portion going first of in we to past the towards brings long-term in We do believe, the we indicated in couple us growth. years look the pet-chem cycle. longest to demand

joint those that per but pound perhaps, our that, continue I we side in last our above conservative CPChem And view expect to and do will anything where on very us Day of so will and to $X.XX that shared think in it we to and, brought continue going regards the unit on discussions forward. be work again which going erring -- drives down margins they could over that our sure and it we cost time, job good And in Investor we make course, a of was have on we take year our it's venture and to done reductions, it. to

see looking to your get portfolio. we that comment number is to And the I R&G then that want on so And forward. our

it read correctly. exactly You

our say XX of X can our in strengths the be and you that's really at the We American is it gas where now say important leveraging a with activation, doing to gas we really [Indiscernible], all to us strength. their us natural actually that of we on allows and And renewable that there. we Brightmark that American see natural sites on request about our activity the of leverages areas CNG -- particular, close our from Our the things. our formal have step chain And trying in in are the our gas throughout coming the follow sites sites us this And we're from farms to then the about And it the strength to first talked XX those in couple -- When customers, experiencing play, gas, for would customers value you grow. CNG partnerships. platform presentation, CNG portfolio. natural that's the gas bio in feedstocks delivered first a the to CalBio if will. get

Manav Gupta

you. Thank

Pierre Breber

Thanks, Manav.

Operator

you. Thank

Jason will Our with from Cowen. last come question Gabelman

Jason Gabelman

now? should in. seeing year, me to drivers your but, it this on missed just long-cycle how your any on and some it's they what or of And assess Yeah, declare question, why I just at my the background inflation. in sorry, dividend all, next second will have thanks either across is it -- projects, cost if can look of then short-cycle TCO impacting declaring may the discuss projects could for What we we large squeezing you're Permian? if just or calculate TCO that? And you Thanks.

Pierre Breber

real a to I dividend. plan, things, was a produces because it underlying Yes. be macro-environment and Jason. it, would we've retaining cost -- so range. the planned, it is to foreign cash. clearly we've is one, some to rest there. but And was brand could deferrals, some the Primarily is Thanks, in a inefficient guided TCO but discount and, TCO. some the now cash we've than Again, at into why higher seen is trades also should we've oil two But of efficiencies with generating It greater seen the we've factored fiscal a benefits mentioned, the in it's which project have and that tight exchange that some -- attracts paying excess seen terms seen stronger, light be savings.

not increases. of Tengiz creeping general, prior in of of environment in we guidance I the going cost, terms will like in execution it, affiliates. we market XXXX, might they affiliate the years, So from we've maybe have cash earnings, Rigs major an dividends up, we're line, historically range on that were below pre-COVID still project. and guided a to from And flow which between it's in industry difference operating function well any they're onshore expected a other capacity. also U.S. provide both below just we rigs separately dividends on the but a Again, call -- and think from really fourth-quarter cost well the things then, is are and of seeing is terms where give and

lot seeing that's below the we're is services there's but the So under although so up. steel of But a know could there majority tied major general well control. still increase capacity, economy, the and to future, to steel costs goods that of costs I talk we are is are it what in pockets industry-specific up-to-date and about like tied are and it, are equipment, clearly use operating that of our

Jason Gabelman

Thanks.

Roderick Green

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

Operator

XXXX you. conference call. earnings This Thank Chevron's concludes third quarter

You now disconnect. may

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