Chevron CEO Talks Dividend, Oil Prices And Venezuela

One of the key takeaways from Chevron Corporation's CVX earnings report is its commitment to protecting dividends as its "financial priorities have not changed," CEO Michael Wirth said on CNBC's "Squawk Box."

Chevron reported quarterly earnings of $1.93 per share, a 38.8% increase over earnings of $1.39 per share from the same period last year. The company reported quarterly sales of $31.501 billion, which beat the analyst consensus estimate of $29.380 billion.

Dividend Is 'Strong And Safe'

Chevron's dividend remains both "strong and safe" while management is taking "prudent action" to ease capital expenditures and expenses in response to the challenging environment, Wirth said. The reduction in expenses will involve some "changes in our workforce" although this was consistent with decisions made prior to the outbreak.

April, in particular, was a challenging month for the entire industry as demand for oil plummeted to a historic low, he said. Supply has been slower to adapt to the new reality of many economies being shut down.

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Negative Oil Prices

Oil prices dipped into negative territory for the first time ever in April as holders of the futures contract were obligated to assume the physical delivery of oil. But Chevron isn't a big player in these paper markets; rather, it's a giant in the physical market.

In terms of storage, Chevron has some "operational flexibility" by leasing space in the U.S. government's strategic petroleum reserve facilities, the CEO said. Typically, the government is the one who buys oil and places it in its reserves but it's in a position where it has excess space to rent.

Venezuela Update

Chevron has had a presence in Venezuela for around a full century but it was ordered by the White House to "wind down" operations over the coming months. However, the U.S. Treasury has granted the company repeated 90-day licenses to remain in the country.

To be clear, Chevron is a "partner in two operations that are operated by another company," the CEO. As such, it isn't required to leave the country, rather it has to cease offering certain services as part of the ventures.