U.S. energy major Chevron Corp. said fourth quarter earnings were down sharply from last year and there are few signs of relief looking ahead.

Chevron reported a loss of $588 million for the fourth quarter, compared with year-on-year earnings of $3.5 billion. Chairman and CEO John Watson said earnings were down drastically as a result of pressure from lower crude oil prices.

"Operating expenses and capital spending were reduced $9 billion in 2015 from 2014, and I expect similarly large reductions again in 2016," he said in a statement. "In addition, asset sales proceeds were $6 billion in 2015, with additional sales planned for 2016 and 2017."

Chevron is the first of the so-called supermajors to issue a report for the fourth quarter. In July, the company announced plans to lay off about 2 percent of its global workforce, with most of the cuts coming from its U.S. payroll. In December, the company outlined a 2016 spending target of about $26.6 billion, about a quarter less than last year.

Chevron's reported loss was its first in more than 10 years.

The company estimated its total debt as of Dec. 31 at $38.6 billion, close to 40 percent more than one year ago. Upstream, or exploration and production, took a heavy loss in the fourth quarter, against a profit one year ago.

Energy companies are spending less on exploration and production as capital evaporates in response to lower crude oil prices. Baker Hughes, Halliburton and Schlumberger, three of the major companies servicing the upstream sector, all reported substantial losses for the fourth quarter, with Schlumberger saying there were few reasons for short-term optimism.

Crude oil prices are lower in part because the market is oversupplied as global economic growth slows. Chevron said net production in the fourth quarter was up 7 percent from last year.

"We had first production from two deepwater projects in Africa, and ramped up production from Jack/St. Malo in the deepwater Gulf of Mexico and our shale and tight resources in the Permian Basin," Watson said.

Shares in Chevron (NYSE: CVX) were lower by nearly 2 percent ahead of the start of trading in New York.