Chevron expects its earnings to be down for the first quarter of 2009.

Chevron Corporation has announced its interim update for the first quarter 2009, stating that its earnings are expected to be “sharply lower” than in the fourth quarter 2008.

Its upstream earnings, from exploration and production, look set to substantially decline. Although oil-equivalent production – for both the US and internationally – increased by up to 64,000 barrels per day, and natural gas production also increased, prices for both plummeted at the beginning of the year.

The company’s downstream earnings are expected to fare better, mainly due to the sale of its fuels marketing businesses in Brazil and Nigeria. The Brazilian sale resulted in Ultrapar acquiring 2,000 Texaco service stations in March 2009.

At the company’s annual meeting with financial analysts in March, Chevron announced it was “well-positioned to deal with difficult market conditions”.  Dave O’Reilly, Chevron’s Chairman & CEO, said: “We are continuing to execute our key strategies. We’re moving legacy projects to development, we’re moving resources to reserves, and we’re continuing to deliver our industry-leading exploration programme. In the downstream, we’re continuing our programme to improve reliability and feedstock flexibility, and we are sharply focused on reducing costs.

“For the longer term, we believe global energy demand will rise as economic growth resumes. We have more exposure to some of the top growth regions in the world. Shorter term, our portfolio is relatively less exposed to sectors that are most sensitive to an economic downturn.”

The company will announce its full quarterly results on 1 May 2009.

Chevron is one of the world’s leading integrated energy companies, based in California with 62,000 employees worldwide.