* Price change determines share of output between partners
* Q1 price rises cut Chevron share of output by 22,000 bpd
(Adds spokesman on the move, background, byline)
By Braden Reddall
SAN FRANCISCO, April 29 Chevron Corp (CVX.N)
delivered another blow to the once-preeminent U.S. West Texas
Intermediate (WTI) oil futures contract on Friday, saying it
had switched to Europe's Brent crude benchmark when calculating
production-sharing contract changes.
Chevron, the third-largest nongovernment-controlled oil
company by value, said on Friday higher oil prices cut volumes
under production-sharing and variable-royalty contracts in the
first quarter by about 22,000 barrels per day (bpd).
"Given the recent divergence in the WTI-Brent spread, going
forward we will use the change in Brent to calculate a price
effect because it is more closely tied to our international
realizations," Jeanette Ourada, general manager of investors
relations, told analysts on a conference call.
A Chevron spokesman said the move to Brent was done in an
internal index measuring the quarterly impact of oil price
movements on the company's production-sharing contracts, but
did not affect the contracts themselves.
While the change is largely notional, it comes at a time
when an unprecedented divergence with WTI has helped Brent gain
momentum -- and trading volumes -- as the global oil price
reference of choice for producers and users of the world's most
widely traded commodity. [ID:nSGE73A00A]
Earlier this month, Malaysia's Petronas [PETR.UL] dropped
national crude Tapis as its export benchmark in favor of Brent.
Two weeks earlier, Atlanta-based Delta Air Lines (DAL.N)
announced it had swapped out its previous jet fuel hedges based
on the WTI contract CLc1, and switched to Brent.
London Brent prices LCOc1 have jumped to a record premium
to U.S. crude oil futures this year, due to a glut of crude at
the Cushing, Oklahoma delivery point for the New York
Mercantile Exchange's (NYMEX) contract CLc1.
A surge in Cushing crude inventories pushed WTI to a record
discount of $17 a barrel CL-LCO1=R to Brent crude in March.
Many traders and analysts say the London contract is a more
accurate guage of international markets, with U.S. crude
futures more indicative of conditions in the U.S. Midwest.
Ourada said Brent prices rose an average $19 per barrel
between the fourth quarter and first quarter, resulting in a
1,200-bpd volume reduction for Chevron for each $1 increase in
The San Ramon, California-based firm had reported a near 1
percent decline in overall first-quarter oil and gas
production, along with a sharp rise in profits.[ID:nN29188488]
(Additional reporting by Matthew Robinson in New York; Editing
by David Gregorio)