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Chevron defends buybacks as it posts $35.5 bn in 2022 profit

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Chevron CEO Mike Wirth defends generous share buybacks, noting the company reached record US oil and natural gas production in 2022./AFP
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Jan 28, 2023 - 10:26 AM

NEW YORK — Chevron defended its new $75 billion share repurchase program from White House criticism Friday, as it reported record profits of $35.5 billion in 2022.

The oil giant, which also raised its dividend in Wednesday’s buyback announcement, aims for stock purchases in a “steady, consistent way” through the ups and downs on the commodity price cycle, Chief Executive Mike Wirth said on a conference call with analysts.

US President Joe Biden has repeatedly criticized Chevron and fellow petroleum behemoth ExxonMobil over share buybacks, arguing the companies should steer extra cash into new oil and gas investments, in an effort to lower prices for consumers.

On Wednesday, White House spokesman Abdullah Hasan blasted the announcement as a $75 billion giveaway “to executives and wealthy shareholders” at a time when the company has “claimed” to be working to boost output, he said on Twitter.

Asked about political backlash to the announcement, Wirth said the issue has been “a touch overblown.”

“We weren’t trying to be splashy,” Wirth said. “We’re just trying to indicate the confidence we have in our cash generation.”

In all, Chevron returned $11.25 billion to shareholders, repurchasing nearly 70 million shares, it said in an earnings release.

Wirth said Chevron increased its pace of buybacks three times in 2022 amid the cash deluge, adding that the company could ramp up further in 2023.

Chevron has contested the Biden administration’s characterization of its strategy, arguing that it is capable of both meaningful investment in production and generous givebacks to shareholders.

The company noted that it achieved record US oil and natural gas production in 2022 on the strength of a ramp-up in the Permian Basin in Texas.

US production rose 3.7 percent in 2022, although international output fell by 7.2 percent from the 2021 level.

Chevron reported fourth-quarter profits of $6.4 billion, up around 25 percent from the year-ago period on revenues of $56.5 billion, which was up 17.3 percent.

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