Lower oil prices bit into Chevron's quarterly profit which fell down 4.5 per cent to $6.2 billion as did refinery downtime and higher operating costs in its home market, but the oil company's shares rose as the earnings topped expectations.

Analysts cited foreign currency gains that gave the company a particular boost in the quarter.

Chevron also announced this week an 11 per cent increase in its dividend, making use of some of the $19 billion in cash accumulated to shoulder a near-$37 billion annual capital spending programme, which has been inflated by natural gas projects in Australia.

"Chevron has significant financial flexibility to increase shareholders distribution, despite higher spending levels," Oppenhemier analyst Fadel Gheit said in a note.

First-quarter net income fell 4.5 per cent to $6.18 billion, or $3.18 per share, from $6.47 billion, or $3.27 per share, a year earlier. Analysts, on average, expected $3.08 per share, according to Thomson Reuters I/B/E/S.

The company produced 2.65 million barrels of oil equivalent per day, up from 2.63 million bpd a year earlier, though down from a particularly strong 2.67 million in the fourth quarter.

Achieving increased production from oil wells has been a struggle for Chevron and larger rival Exxon Mobil, which reported a drop in first-quarter production on Thursday.

Chevron is targeting 25 per cent growth in output by 2017, and its much-delayed liquefied natural gas plant in Angola is a key new project this year.

Chief financial officer Pat Yarrington said it would start up this quarter, and reach full capacity by year-end - contributing about 20,000 bpd for 2013.

"Obviously, that would just be a partial year contribution for us," she told analysts. "It is worth about 60,000 barrels a day net to us when fully operational."

At the Frade field off the coast of Brazil, where Chevron had faced sanctions due to an oil leak, the company has approval to restart production at four wells. Ramp-up would be slow, however, and it would contribute only about 5,000 bpd this year, Yarrington said.

In the first quarter, Chevron's US E&P earnings fell by about a quarter to $1.13 billion, with operating expenses higher and the average sale price for US liquids down to $94 per barrel from $102 a year before.

Analysts at Simmons & Company said most of the outperformance for Chevron in the quarter was from its international operations.

US downstream earnings, from refining and marketing, declined more than 70 per cent, with refinery crude input falling by 350,000 bpd to 576,000 bpd due to planned work at a few of its refineries.

Chevron is trying to get its plant in Richmond, California, back to normal after a fire last August damaged its crude unit.

The company said it reintroduced feedstock to the crude unit this week, and would bring it to full capacity in the coming days. – TradeArabia News Service