Loading summary
Transcript22 lines
- [00:00]
Indiana University Announcer
Indiana University strengthens tomorrow's workforce with practical, real world experience. IU grads make a difference in your community, serving as teachers, nurses and engineers who rise to tomorrow's challenges and meet them. Learn more at iu.edu impact,
- [00:20]
Emaar Bondner (Chevron CFO)
Bloomberg Audio Studios Podcasts, Radio News Speaking of Chevron,
- [00:27]
Bloomberg Host
we're taking a look at shares right now, lower by about 1.4% after a first quarter report that analysts called, quote, messy. Let's bring in Bloomberg Surveillance co host Annmarie Hordern who is joining us with the CEO FO of Chevron right now.
- [00:43]
Annmarie Hordern (Bloomberg Co-host)
Thanks so much. Yeah, Chevron blew past all of these expectations for earnings per share, but they're obviously in the thick of it when it comes to the conflict in the Middle east and the volatility we're seeing in the energy market. I'm so pleased to be joined now by the cfo Emaar Bondner. Thank you so much for joining us. So obviously earnings per share blew past all of these expectations, but it's a volatile time right now. How is the company weathering what we're seeing in terms of the conflict in the Middle East?
- [01:09]
Emaar Bondner (Chevron CFO)
Yeah, well, thanks for having me. Anne Marie was, you know, EPS beat that we posted this morning. And behind that is a very resilient portfolio with many operational highlights. You know, starting here in the US we had our third consecutive quarter of production, over 2 million barrels of oil equivalent per day. We had record refinery runs in March. And our diversified portfolio created high margin capture and demonstrate a strong utilization. So while we're managing all the volatility and all the dynamics in the market, our portfolio is incredibly, incredibly resilient. Also in the Middle east we have relatively less exposure than some others. We have a few operations there and they're all running, but it's a very small percentage of our production, less than 5%. So what we're really doing is we're optimizing all the levers that we have, our equity crudes, our refineries and we're bringing supply to, to market and to our customers.
- [02:13]
Annmarie Hordern (Bloomberg Co-host)
It does see some investors were disappointed that the buyback was not increased and one RBC analyst said it's really just a matter of when, not if. Is that an accurate assessment?
- [02:23]
Emaar Bondner (Chevron CFO)
Well, we guide our ranges around capex, around buybacks. We guide with a range of prices in mind. So probably the comment that came from the analysts talks to the fact that analysts know that operate within, within, within a range and we're not changing where we're within that range right now when it comes to buyback because with eight weeks of a conflict, we really need to see more in terms of an outlook for, for oil prices in particular that is structurally different than the range of prices that we used when we put our plans together. So that's probably what the analyst is talking about. We guided to 10 to 20 billion of, of buybacks and we guided with a range. We'll use the, we believe conditions warrant it.
- [03:13]
Annmarie Hordern (Bloomberg Co-host)
Well, obviously you're going to be looking at all the scenarios that could play out given the uncertainty with what is going on in the Strait of Hormuz. What is Chevron looking at in terms of say the Strait was shut for another month or two months?
- [03:26]
Emaar Bondner (Chevron CFO)
Well, I mean, we're not looking with that level of definition around the timeline. I mean, when we look at our plans, we plan for the long term. So we don't typically look at a month and then make adjustments in our actions in the business because our business is so long term. We look through the cycles, we, we make decisions with ranges in mind. And right now we're not changing anything that we're doing. We're growing 7 to 10% this year from a production perspective. And so what we are focused on is delivering on those plans, delivering them with cost and capital discipline. We're not moving things around with an outlook that's, you know, one, one month ahead.
- [04:07]
Annmarie Hordern (Bloomberg Co-host)
If we do have $100 oil though, for the foreseeable future, would that offer scope to say, increase the buyback later this year?
- [04:15]
Emaar Bondner (Chevron CFO)
Well, at prices of those ranges, we'd obviously go back and look at our plans. I mean, right now we plan for high prices and low prices. And so, you know, the duration of the price is important and important to us. So we typically have, you know, a wide range. So nothing right now that would be temporary in terms of high oil prices, which what we're doing.
- [04:37]
Annmarie Hordern (Bloomberg Co-host)
Anne Marie Emer, I know you've been looking at the massive dislocation of what is actually going on in the physical market and the reality versus what we see on our screens every single day. But we have seen an uptick in crude over the past few days in terms of WTI really holding on to triple digits. Do you think that the financial markets are finally catching up to what you see every day in the physical market?
- [05:01]
Emaar Bondner (Chevron CFO)
Well, it's very hard, it's really hard to do know and to predict that. And so, you know, what we're seeing in the physical markets, what we're, what we're focused on is ensuring that we are operating safely and reliably. And it's it's hard to make a prediction on. It's very hard for, for physical markets and future markets to, to line up always. It's very difficult. So what we're focused on is just delivering up our plan.
- [05:29]
Annmarie Hordern (Bloomberg Co-host)
When you look at how the market is supplied right now between supply and demand, how quickly do you see the world just driving down inventories?
- [05:38]
Emaar Bondner (Chevron CFO)
Well, a lot of the inventory and spur capacity has been depleted already, Anne Marie, you know, before the conf a few months ago, we had a certain, certain buffer in the system. And so there's, there's very little of the buffer left. So the spare capacity, the inventories that we would rely on to buffer some of the, some of the constraints is really under pressure right now. And so, you know, that's why what we're focused on in Chevron is adjusting the flows of our, of our products to customers because a number of those routes are not available anym. The Strait of Hormuz is obviously still shut in. So we, we pivot and we adjust. And this is where the resilience of the portfolio, both the upstream assets and the refining footprint really has shown in the first quarter.
- [06:30]
Annmarie Hordern (Bloomberg Co-host)
The resilience, well, we're seeing that writ large out of the United States with exports reaching a record high this week. The US Seems to be filling some of that gap with what is going on with the closure of the Strait of Hormuz. How long do you think that can actually continue?
- [06:44]
Emaar Bondner (Chevron CFO)
Well, the US Is more resilient, of course, you know, very strong domestic production and we've got many assets in the US and more inventories than, you know, than in other parts of the world. There's more of a pinch being felt in places like Europe and Africa and Asia. So, you know, from, from a US Perspective, I, I think they're playing the role that they, they can play with exporting as much of their production, but they're also moving production around the country and that' the things that, that we are doing, given that we've had some waivers from the administration that's been really helpful in helping us take some of our products from the Gulf coast, for example, to, to the west coast to relieve some of that pressure. So I think the US is contributing in multiple ways here at home, but also from an export perspective.
- [07:35]
Annmarie Hordern (Bloomberg Co-host)
And how is Chevron contributing when it comes to maybe advice you're offering the administration? I know CEO Mike Wirth was at the White House this week. A number of individuals briefing the President and members of his team. What's the relationship been like?
- [07:50]
Emaar Bondner (Chevron CFO)
Well, first I would say that, you know, we engage with governments all around the world. So where we have operations, where we have employees, good government relations is very important for us. And the current administration here at home in the US is no different. So, you know, we've had very regular communications with the administration about the business. And so, you know, we meet regularly and share perspectives and we believe that's very healthy.
- [08:18]
Annmarie Hordern (Bloomberg Co-host)
I know there's a close relationship as well, working relationship when it comes to Venezuela. I went with Secretary Wright to Caracas. I actually visited some of Chevron's facilities in Venezuela. On the call earlier today, you said Venezuela will likely repay the one and a half billion dollars in debt they owe chevron by 2027. EMA at that point, would Chevron be willing to invest more into Venezuela?
- [08:42]
Emaar Bondner (Chevron CFO)
Well, Anne Marie, you were there and you saw some of our operations. We've been in the country for over 100 years. We are the advantage incumbent in the country. We have lots of history working with the Venezuelans in a very productive way. We have grown production from 50,000 barrels a day to 250,000 barrels a day over the course of the last few years. And we intend to grow production even even further. We have a model, a self funding model that has enabled the development of the assets and the improvement of the assets and the growth that I just referenced and pay off our debt. And so, you know, that has been paid off in a very readable way. And beyond that, you know what, what we look for is the competitiveness of the fiscal terms in Venezuela. And there's a lot of potential in the country. We've obviously stayed there for 100 years for, for a reason. And so we would look for, you know, steps, further steps, maybe from the steps that have already been taken, which are positive, but further steps just to improve the fiscal competitiveness of Venezuela. And then we'll look at all opportunities like we do around the world, with a competitive lens.
- [09:53]
The Hartford Announcer
When you're running a business, the best days are the ones where priorities stay on track. For midsize and large companies, risk can affect multiple parts of the organization at once, from property and liability to cyber and regulatory challenges. At that level, managing risk becomes an ongoing discipline. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive. And when losses do happen, that work is paired with insurance coverage shaped by years of underwriting, risk engineering and claims experience. Learn more@thehartford.com Riskmitigation policies provided by Hartford Fire Insurance Company and its property and casualty affiliates. Hartford, Connecticut.