Chevron CEO calls 2016 a 'transition year'

June 1 (UPI) -- The head of U.S. supermajor Chevron Corp. brushed off last year as a "transition year" that set the stage for progress in the 2017 calendar year.

Despite ongoing cash burdens, Chevron posted $2.7 billion in net income, a gain supported by roughly $600 million in divestments. Fourth-quarter results revealed the company posted its first annual loss in decades.

The company pegged its exploration and production budget for 2017 at $20 billion, 15 percent lower than last year and 42 percent below 2015 levels. It's the fourth year in a row for spending cuts for one of the largest energy companies in the world.

Speaking before stockholders at their annual meeting, CEO John Watson said his company was looking to turn the corner after cutting costs in an effort to balance its books.

"2016 was a transition year for Chevron and the industry," he said in a statement. "As oil prices improved, recovery in earnings was evident in the second half of the year. This progress has continued into 2017."

In early March, the company's exploration and production team told analysts in New York that, after heavy losses last year, it would be generating cash by 2018. It said it would do so in part by capitalizing on natural gas growth projects under way in Australia.

The third production facility at the Gorgon liquefied natural gas facility off the Australian coast is now in service, the regional subsidiary of Chevron said, meaning the flagship project is now fully operational. LNG is an emerging opportunity and the company aims to tap into the growing demand for the super-cooled form of gas in the Asian market.

For future potential, Watson told shareholders the company would count on its efforts in U.S. shale and other expanding parts of its international portfolio.

"Our long-term strength is also underpinned by projects in Kazakhstan, Australia, the deepwater Gulf of Mexico, and attractive future options in West Africa, South America, Asia and North America."