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On Friday, Chevron Corp (NYSE:CVX) reported its third quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Evan Calio – Morgan Stanley: First question for Pat. I mean, I know it’s maybe premature, but I know last year Chevron did a competitive dividend raise and with CapEx likely higher in ’13, how do you think about drawing on the large net cash balance to continue to drive a superior and competitive dividend yield as you really bridge to the production growth and harvesting the capital investment that you’re making now and in 2014 and beyond, if you can, I have a follow-up, please.
Patricia E. Yarrington – VP and CFO: I think it’s a good question, but frankly, I think you’ve sort of outlined our philosophy there just in asking the question. We do pay attention to and want to remain highly competitive on our dividend stream and that’s why you have seen us over the last several years grow the dividend rate at a – very aggressively, 11% compounded per year. As we look forward, we want to continue that pattern. We obviously do see, once we get into the high growth periods, when the major capital projects come online, we do see significant cash generation coming forward there. We take that into account. We take a look at what our investment profile needs to be between now and then, and all of those factors get brought into the mix. Our view of medium-term commodity prices get brought into the mix and it’s based on all of those factors that we then go forward and have a discussion with our Board about our dividend policy. I think it’s very safe to say that our Board takes dividend responsibilities very seriously and our desire to remain competitive and grow that stream of income for our investors as a high priority item, in fact, it’s the single highest priority of cash use.
Evan Calio – Morgan Stanley: If I could have a follow-up to take advantage of Mike being on the call. Mike, I know you’ve talked about positive trends in the base oil load business in the past and you’re increasing your premium base oil capacity at Pascagoula. As a generally less transparent business in general, maybe if you can give us an overview of just that U.S. market your returns expectations for this $1.4 billion expansion and whether or not there was any additional base oil expansion potential at places like Salt Lake where – I know there is also local high paraffinic crude source?
Michael K. Wirth – EVP, Downstream & Chemicals: So it is a market that is a little less transparent and little less what I have understood. In broad terms, the largest portion of the current base oil is a lower technology product called Group 1, which is made through a relatively simpler process of solvent de-waxing, that is a lower performing product and ultimately as we see specifications evolve to higher performance standards and the engines evolve to meet more stringent environmental regulations, you are seeing the OEMs migrate to a higher quality lubricant, which is the Group 2 plus or premium base oils, which are made through a hydro processing technology which Chevron actually is one of the two primary licensors in the world for and we have some distinct technology advantages there. So, the Group 2 or the premium base oil market is a higher margin market and it is the rapidly growing market as the Group 1 market declines in demand. So, you’ve got absolute demand growth for lubricants and within that you’ve got Group 1, which is the larger portion today, shrinking in size and so the premium market is growing quite rapidly with the higher margins. So, that’s the broad context for that. We’ve got large facility at Richmond right now that manufactures premium base oils with Pascagoula. We’ll move past Shell to be the largest in the world and that products will go not only into the U.S. markets, but Europe is a large markets and has a very high specification standard. There is growth in Latin America, so Pascagoula will feed markets well beyond North America and actually allow us to rebalance some of the Richmond barrels into the growth markets in Asia. We do have reviews underway for additional investments in that sector. They likely would be in Asia rather than in Salt Lake City because of the proximity to the markets and some of our existing refining infrastructure that we have in Asia. While you might have an advantaged feedstock that you could use at Salt Lake City, the volumes there would be relatively small, but logistics disadvantage to get it to the large growth markets would be nontrivial. So, I wouldn’t expect to see something happen at Salt Lake City, but you certainly expect to hear more in the future about potential projects in Asia.
Evan Calio – Morgan Stanley: Any comment on returns and I’ll leave it at that.
Michael K. Wirth – EVP, Downstream & Chemicals: The returns would be well higher than what we typically get out of our refining projects and we expect returns on these kinds of projects to be up in the 20%-ish range.
Edward Westlake – Credit Suisse: Just, I guess, while we’ve got Mike on the phone, some Downstream questions. Just an update on Richmond?
Michael K. Wirth – EVP, Downstream & Chemicals: So, at Richmond, as Jeff mentioned, the crude unit remains offline today and will remain offline through the balance of the fourth quarter with an expected startup in the first quarter of next year. We are working closely with outside investigators as well as conducting our own investigation to determine the root cause of the incident and then to share the learnings of that not only broadly within our own organization, but also across the industry to try to prevent similar things from happening anywhere. The preliminary results of our investigation have identified a damage mechanism known as high temperature sulfidation corrosion which led to a general thinning of the piping component that found. We’re waiting for definitive metallurgical testing to confirm that, but it is strongly suspected that that is the technical mechanism. The questions as to why that corrosion had not been identified and addressed are really still the focus of our investigation. We are working closely with multiple agencies in the city, the county and the regional Air Quality District to expedite the permitting process and affect the repairs to the crude unit. That work is well underway. Long lead items have been ordered and some have already arrived. The work is underway to thoroughly inspect every component within the crude unit and complete the repairs with, as I said, an expected restart in the first quarter of next year.
Edward Westlake – Credit Suisse: Then just switching to chemicals, I mean obviously, you’ve got the big ethane cracker. You’ve got the hexene-1 plant. Global demand for chemicals is still going to grow, but the Middle East is maybe a little bit shorter on low-cost gas. When you’re thinking about participating in global growth just maybe a philosophical question, are there opportunities for you to continue to deploy capital beyond that ethane cracker or is it better to just sort of hold with what you have and focus on sort of free cash generation for the corporation?
Michael K. Wirth – EVP, Downstream & Chemicals: Well, it’s a good question. It’s one that we spend time on with CPChem and certainly, with the Board there where our partner participates. We are I think pretty well aligned, but we would look for other attractive opportunities. CPChem’s real strengths have been in the olefins and polyolefins chain. It’s underpinned by attractive feedstock in the Middle East as you mentioned and also the position they have in the U.S. which is highly levered to NGL cracking as opposed to naphtha cracking. So the keys in that business are scale, cost efficiency and good feedstock pricing. I think the big opportunities continue to be in the Middle East and North America. Although you can’t ignore Asia given the size of the market and the demand growth that you see over there, but some of the feed opportunities are not the same in Asia. So, we are supportive of growth beyond the ethane cracker, if we can find a project that has the characteristics that have underpinned the success of CPChem’s investments here in recent years and we continue to look for those and while they may not be easy in the Middle East or in North America for that matter, I don’t think they are impossible. So we continue to look for further opportunities, but we wouldn’t support projects that are not strong in their underlying fundamentals for the sake of growth.
Edward Westlake – Credit Suisse: Thanks and also just thanks before I sign off to (Melody and Roy) and for the group – for everyone for the great trip to Gorgon. Thank you.
Patricia E. Yarrington – VP and CFO: I thought you’d appreciate seeing the second tank with the roof on it now.
Edward Westlake – Credit Suisse: No photos of us around the bottom of it.
Michael K. Wirth – EVP, Downstream & Chemicals: We’ve got those.
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