U.S. High-Dividend Map and Petrochemical Industry Chain Tracking: Chevron (U.S.) and Sinopec (China)

Figure: Revenue Structure (Unit: RMB 100 million) Historically, upstream exploration and production operations are highly sensitive to oil prices (positively correlated); midstream refining operations deliver relatively strong profitability when oil prices range between USD 40–80 per barrel—largely due to China’s domestic refined product pricing mechanism; downstream marketing and distribution operations exhibit relatively low correlation with oil prices; their gross profit has remained stable or slightly increased in recent years, closely tied to the company’s own refined product sales volume; and petrochemical operations are influenced by both oil prices and supply-demand dynamics—gradual oil price increases coupled with robust demand tend to boost petrochemical sector prosperity. Overall, during high-oil-price periods, upstream exploration and production contribute the bulk of operating profit; during low-oil-price periods, refining and petrochemicals drive most operating profit, while marketing and distribution maintain relatively stable operating profits. Figure: Operating Profit by Segment (III) Figure: YoY Growth Rate of Net Income Attributable to Shareholders (Unit: %) From a micro-level growth perspective: I. Chevron — In Q2 2025, revenue totaled USD 44.82 billion, down 12.4% year-on-year (vs. USD 51.181 billion in Q2 2024) and slightly below market expectations of USD 45.6 billion (a shortfall of ~1.71%); it declined 5.86% sequentially from Q1’s USD 47.61 billion. Q2 net income fell 44% year-on-year to USD 2.49 billion, primarily driven by falling oil prices (due to oversupply and weak demand), reduced income from upstream/downstream equity affiliates, and a USD 215 million fair-value loss related to the Hess acquisition. Excluding special items—including the Hess fair-value loss, foreign exchange impacts, and pension curtailment costs—adjusted net income stood at USD 3.1 billion. Q2 operating cash flow reached USD 8.3–8.6 billion—within the company’s historical high range—and adjusted free cash flow rose 15% sequentially to USD 4.9 billion. Total capital expenditure amounted to USD 3.7 billion, focused on optimizing efficiency of core assets. Growth in oil & gas production partially offset soft oil prices: Q2 output reached 3.396 million barrels of oil equivalent per day (MBOED), up ~14% year-on-year and a quarterly record. Permian Basin output rose to 1.0 MBOED (a significant increase over last year), Gulf of Mexico output grew 22%, and output from the Kazakhstan Tengizchevroil joint venture surged 34%. Refining segment profitability improved, benefiting from higher refined product margins: refining profit rose 23% year-on-year to USD 737 million, partially cushioning upstream pressure. Figure: Quarterly YoY Growth Rate of Net Income Attributable to Shareholders II. Sinopec — In Q1 2025, revenue totaled RMB 735.4 billion, down 6.9% year-on-year and up 3.9% quarter-on-quarter; net income attributable to shareholders was RMB 13.3 billion, down 27.6% year-on-year but up 118.7% quarter-on-quarter; non-recurring net income attributable to shareholders was RMB 13.2 billion, down 27.3% year-on-year but up 223.3% quarter-on-quarter. According to the company’s announcement, in Q1 2025, its exploration & production, refining, petrochemicals, and marketing & distribution segments generated operating profits of RMB 12.9 billion, RMB 2.4 billion, -RMB 1.2 billion, and RMB 4.2 billion respectively—representing year-on-year changes of -RMB 1.1 billion, -RMB 4.5 billion, +RMB 0.4 billion, and -RMB 3.8 billion, and quarter-on-quarter changes of -RMB 0.5 billion, +RMB 2.3 billion, +RMB 3.9 billion, and +RMB 2.8 billion—indicating overall sequential improvement.

Spending $9.2 Billion in Two Years! Why Are Oil Majors Betting on the Gulf of Mexico?

At a depth of 3,000 meters beneath the waters of the U.S. Gulf of Mexico, a new ‘gold rush’ is heating up. Shell’s ‘Spartan’ floating platform is undergoing riser welding; bp’s ‘Cassidra’ 20K high-pressure wellhead system has passed pressure testing; and Chevron’s ‘Anchor’ field is setting new records for deepwater operations. Mexico functions like a ‘deep-sea treasury’. According to the latest statistics from the U.S. Bureau of Ocean Energy Management (BOEM), this region still holds proven remaining recoverable reserves of 26.77 billion barrels of crude oil and 197 trillion cubic feet of natural gas—with 70% concentrated in the deepwater areas already served by pipelines, where tie-back costs are far lower than those in Brazil’s pre-salt or West Africa’s ultra-deepwater regions. 01 Three Major Giants Accelerate Deployment Since 2024, combined capital expenditures by Shell, bp, and Chevron in the Gulf of Mexico have reached a record USD 9.2 billion—accounting for 28% of their global upstream investment, up from just 17% five years ago. Shell Shell’s strategy centers on ‘optimizing existing assets + capturing new opportunities’. The company recently approved a waterflood development plan for its ‘Vito’ field, injecting high-pressure seawater into reservoirs to potentially recover an additional 60 million barrels of oil—projected to yield an internal rate of return (IRR) as high as 35%. Further offshore, in the ‘Spartan’ deepwater area, a new platform with a daily capacity of 90,000 barrels is scheduled to begin operations in 2028; its connected ‘Whale’ field has confirmed proven reserves of 480 million barrels. bp bp is installing the world’s first drilling system capable of withstanding 20,000 psi pressure at its Cassidra field—enabling access to previously untappable deep reservoirs. This project is expected to commence production in 2029, initially securing 275 million barrels of recoverable resources, with long-term potential to unlock an entire resource cluster totaling 10 billion barrels. Chevron Following its USD 53 billion acquisition of Hess, Chevron not only gained massive assets in Guyana but also unexpectedly became the largest leaseholder in the Gulf of Mexico—80% of its newly acquired blocks lie within 50 kilometers of existing infrastructure, meaning smaller discoveries can be rapidly monetized via tie-backs. Take the Balmorel field, for example: connected to the ‘Blind Faith’ platform via a 12-kilometer subsea pipeline, its development cost was reduced by 60% compared to building a new platform. Chevron expects its net production in the Gulf of Mexico to reach 300,000 barrels of oil equivalent per day by 2026—a 40% increase over 2023 levels. 02 Other Oil Companies Pursue Differentiated Strategies Beyond the three majors, the Gulf of Mexico’s market landscape is being reshaped by additional players—some entering via acquisitions, others focusing on niche segments—to form complementary competitive dynamics. 1 Occidental Petroleum (Oxy) exemplifies the ‘latecomer’ model: it entered the Gulf of Mexico market in 2019 through its acquisition of Anadarko Petroleum. Its daily output peaked at 147,000 barrels of oil equivalent in 2022. Though output has since declined modestly, Oxy demonstrated strong commitment in the December 2023 lease auction, securing 49 blocks—the second-highest number after Shell. 2 Equinor (Norway’s state-owned oil company) pursues a core strategy centered on ‘non-operated interests’. In Q2 2025, its net daily output in the region reached 129,000 barrels of oil equivalent, ranking fourth—slightly ahead of Occidental.

Chevron to divest ownership interests in Hess Midstream and DJ Basin crude midstream assets

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Chevron signed agreements with Hess Midstream to restructure Bakken midstream contracts and establish new contracts in the DJ Basin, divesting certain ownership interests in crude midstream assets.

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Chevron to divest ownership interests in Hess Midstream and DJ Basin crude midstream assets

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Chevron to divest ownership interests in Hess Midstream and DJ Basin crude midstream assets

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