Chevron Corp (CVX.N), the second-largest U.S. oil company, reported better-than-expected quarterly profit on Friday as higher energy prices offset rising expenses and production dips in Kazakhstan.
Chevron's reliance on higher crude oil and natural gas prices to boost results, even as production falls, mirrored results from rival Exxon Mobil Corp (XOM.N) on Thursday, and underlined Wall Street's concerns that international energy giants were not replenishing reserves fast enough.
The company is spending more than $20 billion on five new projects it hopes will boost production 20 percent by 2017. One project, the Gorgon liquefied natural gas (LNG) facility in Australia, should be online by next year, executives said on a conference call with investors.
Chevron reiterated on Friday it remained interested in developing the Kitimat LNG project off the western coast of Canada. The plans were thrown into doubt on Thursday, when joint venture partner Apache Corp (APA.N) said it was pulling out.
"We need to get a new partner in. That needs to happen," Chevron Vice Chairman George Kirkland said on a conference call with investors.
However the project, which would chill natural gas produced in British Columbia for export, needs to have contracts in hand for 60 percent of production before Chevron decides to invest funds for construction, Kirkland said.
"We're not going to do a project unless it's economic," he said.
Chevron is not interested in buying part of Apache's stake in the Kitimat project, and would even consider selling a small portion of its 50 percent stake, Kirkland said.
Chevron's net income rose to $5.67 billion, or $2.98 per share, in the second quarter, from $5.37 billion, or $2.77 per share, in the year-ago period.
Analysts expected earnings of $2.66 per share, according to Thomson Reuters I/B/E/S.
Production fell 1.4 percent to 2.5 million barrels of oil equivalent per day (boe/d).
Shares of Chevron fell 1 percent to $127.90 in afternoon trading.
(Reporting by Ernest Scheyder; Editing by Franklin Paul and Jeffrey Benkoe)