Gulf News reported that Chevron said on Friday that profit jumped 43% in the Q2 as higher oil and petrol prices made up for a decline in oil production.
The San Ramon, California oil company reported earnings of USD 7.7 billion or USD 3.85 per share for the three months ended June 30th 2011. That compares with USD 5.4 billion or USD 2.70 per share a year ago. Revenue increased 31% to USD 66.7 billion.
Chevron's quarterly profit was the largest since it set a company record of USD 7.9 billion in the Q3 of 2008. It followed similar big gains for other oil giants. ExxonMobil's earnings rose 41% to USD 10.7 billion while Royal Dutch Shell's profit nearly doubled to USD 8.7 billion. BP made more than USD 5 billion in the period following a loss of USD 17.2 billion last year.
Oil prices soared to the highest level in three years during the quarter as uprisings swept through North Africa and the Middle East, rattling oil markets and shutting down exports from Libya. The price of petrol, diesel, jet fuel and other fuels also surged, boosting profit margins at refineries.
Chevron said that US oil prices increased 46% in the US and 51% internationally from April to June. Natural gas prices increased 8% in the US and 25% internationally. The higher prices grew company revenue even as production declined. Chevron, like many of its oil industry peers has struggled to extract more oil. The company produced 2.69 million barrels per day in the quarter down from 2.75 million barrels per day in the same part of last year.
It wasn't for a lack of trying. The company ploughed USD 7.5 billion into oil exploration and production projects in the quarter up 69% increase from a year ago. It ramped up oil and natural gas production from new projects in Canada and the US and earlier in the year it acquired Atlas Energy.
Chevron said that still those increases didn't make up for the decline in output from its mature fields. The company's international production also slowed in the quarter by more than 8,000 barrels per day because of contracts that require Chevron to take less oil as prices rise. For every dollar that Brent crude rose it cut production by 700 barrels per day.
Chevron officials said that Brent, which is used to price many international crude varieties, rose by an average of USD 12 per barrel from the first 3 months of the year. The company still expects production to grow roughly 1% a year until 2014 and then 4% to 5% a year from 2014 to 2017.
Meanwhile, Chevron's refining business boosted profits 30% in the US but profits dropped 11% internationally. Higher fuel prices lifted profit margins, but foreign currency effects cut earnings at Chevron's international refineries.
(Sourced from Gulf News)
