Chevron Corporation reported 1998 preliminary net income of $1.98 billion, down 39 percent from 1997 net income of $3.3 billion. Net income for 1998 and 1997 included net benefits of $31 million and $76 million, respectively, from special items.
For the fourth quarter 1998, net income of $431 million included net charges of $72 million from special items. Charges associated with asset write-downs; reserves for environmental remediation and a litigation issue; and last-in, first-out (LIFO) inventory adjustments were partially offset by favorable prior-year tax adjustments and a gain from an asset sale. Fourth quarter 1997 net income included net benefits from special items totaling $68 million.
CEO Ken Derr highlighted
a number of significant 1998 operating and strategic events for the company. Included was the Deepwater Gulf of Mexico
. Chevron acquired 66 additional deepwater tracts at federal lease sales during the year, furthering its intent to be a major participant in the development of the Gulf's deep waters. The company's deepwater inventory consisted of 428 tracts at year-end 1998.
Construction and installation of production facilities at the company's first deepwater Gulf of Mexico operation
, neared completion. Chevron is the unit operator with
a 57 percent working interest in Genesis and expects production to commence in February 1999. Another of the company's deepwater projects, Gemini, is expected to begin production later in 1999.