CHEVRON Corporation has reported a loss of US$1.5 billion for the second quarter of 2016.

That result compares with earnings of US$571 million in the second quarter of 2015.

Included in the quarter 2, 2016 figure were impairments and other non-cash charges totaling US$2.8 billion, partially offset by gains on asset sales of US$420 million. Foreign currency effects increased earnings in the 2016 second quarter by US$279 million, compared with a decrease of US$251 million a year earlier.

A major hit was recorded in sales and other operating revenues in second quarter 2016 which were down to US$28 billion, compared to US$37 billion in the year-ago period.

“The second quarter results reflected lower oil prices and our ongoing adjustment to a lower oil price world,” Chevron chairman and CEO, John Watson, said.

“In our upstream business, we recorded impairment and other charges on certain assets where revenue from expected oil and gas production is expected to be insufficient to recover costs. Our downstream business continued to perform well.”

“We continue to make progress towards our goal of getting cash balanced.

“Our operating expenses and capital spending were reduced over $6 billion from the first six months of 2015.”

Mr Watson said that the company had achieved some significant steps with its major capital projects, including Gorgon.

“We have restarted LNG production and cargo shipments at Gorgon and Angola LNG, and started up the third train at the Chuandongbei Project in China. Construction at our other key projects is progressing, and we expect additional start-ups later this year.

As these projects continue to ramp up, they are expected to increase net cash generation in future quarters.”

“We recently announced the final investment decision on the Future Growth and Wellhead Pressure Management Project at Tengiz in Kazakhstan,” Watson added. “The project represents an excellent opportunity for the company. It builds on our strong track record at Tengiz and is expected to create future value for our shareholders.”

In the Upstream sector, Chevron’s worldwide net oil-equivalent production was 2.53 million barrels per day in second quarter 2016, compared with 2.60 million barrels per day from a year ago. Production increases from project ramp-ups in the United States, Angola, Canada and other areas were more than offset by normal field declines, the effect of asset sales, the Partitioned Zone shut-in, maintenance-related downtime, and the effects of civil unrest in Nigeria.