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Chevron has decided to keep its presence in Bangladesh, the company said in a statement yesterday without elaborating on the motive behind this decision. Earlier this year, the company had announced plans to sell its local subsidiaries to Chinese Himalaya Energy Co Ltd.
The sale plan was part of a wider asset disposal program designed to rid Chevron of non-core operations, but according to Dhaka Tribune, negotiations with the company’s local partner, Petrobangla, and the government, resulted in a reversal of its earlier decision.
Now, instead of selling, Chevron will spend US$400 million on the largest gas field in Bangladesh, the country’s junior energy minister told Reuters. The field, Bibiyana yields 1.25 billion cu ft of natural gas daily.
Chevron’s subsidiaries in the south Asian nation operate three gas fields that collectively contribute 58 percent of Bangladesh’s natural gas production. Last year, the average net daily production from the fields, Bibiyana, Jalalabad, and Moulavi Bazar stood at 658 million cu ft of gas plus 4,000 barrels of condensate. The condensate production all came from Bibiyana.
Chevron last week reported a net profit of US$1.95 billion, up by an impressive 52 percent on the year, and revenues of US$36.21 billion, up by 20 percent, for the third quarter of 2017. The results topped analyst expectations in both the EPS and the revenue department, with EPS at US$1.03 versus a forecast US$0.98
More importantly, however, Chevron booked a near 60-percent increase in cash flow from operations for the first nine months of the year, to US$14.3 billion, despite a decline in crude oil production. Cash flows are watched closely in the oil industry as a gauge of a company’s financial health.
In a statement, CEO John Watson said Chevron’s production in the Permian was already above expectations and that the third quarter had also seen the completion of some large projects, notably the Gorgon LNG project in Australia. The company, he said, had also benefited from higher oil and gas production overall, and lower capital spending.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.