Chevron has reduced its 2020 capital spending budget by another $2bn. Credit: Buhler013.

US oil company Chevron has reduced its 2020 capital expenditure (capex) budget by another $2bn to $14bn, but has posted a healthy net profit of $3.6bn in this year’s first quarter results (Q1 2020).

The company reported Q1 2020 earnings of $3.6bn or $1.93 a share, compared to earnings of $2.6bn or $1.39 per share in Q1 of 2019.

The company had initially planned to spend $20bn on 2020 capex before the market was hit by the coronavirus pandemic and low commodity prices.

According to the company, cash flow from operations in Q1 2020 was $4.7bn, compared with $5.1bn in the corresponding 2019 period (Q1 2019).

The US oil major also reported that it plans to curtail production by 300,000 barrels per day (bpd) this month and 400,000bpd next month.

Chevron CEO and Board chairman Michael K Wirth said that the company’s Q1 2020 results were driven by downstream margins and increased Permian production.

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Wirth added: “However, commodity prices fell significantly in March and the weakness continued into the second quarter, primarily due to reduced demand resulting from the Covid-19 pandemic.

“Chevron is responding to these unprecedented challenges by making changes to what we control, and with a commitment to protect the long-term health and value of the company.

“Our company entered this crisis well positioned with a strong balance sheet, flexible capital programme, and low break-even price. These advantages will be important as we respond to challenging market conditions.”

In February this year, Chevron asked around 300 employees based at its London office to work from home amid concerns that one of its staff has contracted the coronavirus.

In the same month, Chevron Technology Ventures (CTV) commissioned a pre-front end engineering design (pre-FEED) study to explore the potential of trialling Svante’s technology in its operations.