LNG

Chevron Corp., the US major with liquefied natural gas projects in nations such as Australia and supplying LNG cargoes to both the Asia-Pacific and the Atlantic Basin, has authorised a share buy-back of $75 billion to enable investors to benefit from increased profits.

The statement on the buy-back from San Ramon, California-based Chevron came ahead of fourth-quarter earnings due on January 27.

A share buy-back reduces the number of shares outstanding and increases the earnings per share value of outstanding stock while under-scoring the financial efficiency of the company.

The Chevron board also declared a quarterly dividend of $1.51 per share, an increase of $0.09 cents per share, or 6 percent.

“This increase puts Chevron on track to make 2023 the 36th consecutive year with an increase in annual dividend pay-out per share,” it added.

Chevron, led by Chairman and Chief Executive Mike Wirth, stated that its previous share repurchase authorization of $25Bln, which has been in place since January 2019, will terminate at the end of March.

The company said that under new buy-back programme it would also repurchase the company’s common stock from time to time in the open market, by block purchases, in privately negotiated transactions or in other ways determined by the company.

“The timing of the repurchases and the actual amount repurchased will depend on a variety of factors, including the market price of the company's shares, general market and economic conditions and other factors,” it added.

In addition to its global oil and gas industry presence and its strong position in US domestic production areas such as the Permian Basin, Chevron also operates three world-class LNG exports terminals.

LNG projects

The company is the operator of the Gorgon and Wheatstone LNG facilities in Western Australia as well as Angola LNG in southwest Africa and also has a strong position in Eastern Mediterranean natural gas markets after the 2020 acquisition of Houston-based Noble Energy.

According to analyst estimates, Chevron is expected to report a doubling of 2022 profits to around $37.2Bln and is seen spending about $17Bln on new oil and gas projects this year, up $2Bln from the previous year.

Other energy majors such as ExxonMobil, Shell, BP and TotalEnergies are also expected to report very high annual profits that will be the subject of share buy-backs for their loyal shareholders while also attracting criticism led by the anti-capitalist lobby.

Analysts noted that governments have also been targeting energy companies with actual or threats of “windfall” taxes to try and raise revenues to cope with energy security issues caused by their own misguided strategies.

They added that these have included over-emphasizing intermittent renewable projects and at the same time putting regulatory barriers up for hydrocarbon projects that are needed when renewables fail.

This has been done even as oil and gas companies have been the biggest creators of technology and projects to reduce excess carbon emissions and have tasked themselves with keeping economies going for the next 30 years with energy supplies forecast to be much less less than at present.

Shell plc, the now UK-based oil and gas major and leading liquefied natural supplier, reported fourth-quarter income of $11.5 billion compared with $4Bln of losses a year ago, while annual LNG sales dropped by 11 percent.