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* Price change determines share of output between partners
* Q1 price rises cut Chevron share of output by 22,000 bpd
SAN FRANCISCO, April 29 (Reuters) – Chevron Corp CVX.N is switching to Europe’s Brent crude benchmark from West Texas Intermediate (WTI) when calculating production-sharing contract changes, to better reflect moves in international oil prices.
Chevron, the third-largest nongovernment-controlled oil company by value, said on Friday that 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.
Ourada said Brent prices LCOc1 increased by an average $19 per barrel between the fourth quarter and first quarter, resulting in a 1,200-bpd volume reduction for each $1 increase in Brent.
The San Ramon, California-based firm had earlier reported a near 1 percent decline in overall first-quarter oil and gas production, along with a sharp rise in profits.[ID:nN29188488]
Brent has gained momentum as the global oil price reference of choice for producers and users, in a battle of benchmarks for 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. (Reporting by Braden Reddall; Editing by Lisa Shumaker)
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