Chevron Corp. reported its first quarterly loss in more than 13 years on Friday as the oil producer struggled to cope with plunging crude prices that are eroding profitability across all its divisions.
It was the latest sign that the more than 70% drop in oil prices since 2014 has humbled a once-strong energy sector and forced it to curtail new projects, lay off staff and shrink spending.
Chevron last month had already signaled its pain by cutting its 2016 budget by 24% to $26.6 billion, part of a strategy to contend with lower oil prices and hunker down for a hoped-for price rebound.
Smaller rivals Hess Corp., Continental Resources and Noble Energy cut their own budgets early this week, ranging from 40% to 66%.
“We’re taking significant action to improve earnings and cash flow in this low-price environment,” John Watson, Chevron’s chief executive, said in a press release. The company posted a fourth-quarter net loss of $588 million, or 31 cents per share, compared with a net profit of $3.47 billion, or $1.85 per share, in the year-ago period.
The last time Chevron posted a quarterly loss was the third quarter of 2002.
Production rose 4% to 2.67 MMboed in the quarter ended Dec. 31.
The bulk of Chevron’s losses came from its divisions that explore for and produce oil and natural gas, with its U.S. division alone posting a loss of $1.95 billion.
Surprisingly, Chevron’s refining divisions also saw profit plunge. Refiners typically see profitability increase when the price of their main feedstock falls. Chevron said the drop was due to a boost in the prior year from asset sales, and also smaller margins on specialty refined products.
Shares of Chevron have slid about 5% so far this year, closing Thursday at $85.86 per share.