Big Oil's biggest quarter ever: $51.5B in all

HOUSTON — Oil giants Chevron Corp. and Total SA wrapped up a string of gargantuan, record-breaking earnings reports Friday, a stretch in which six of the major international oil companies topped $50 billion in combined profit for the first time.

While the profits of unparalleled size have brought withering criticism from Washington and disgust from consumers across the country, very few were surprised. Crude prices during the second quarter were nearly double what they were a year ago.

Chevron said Friday its second-quarter profit rose 11 percent to a record $5.98 billion.

Revenue rose significantly to $82.9 billion from $56.1 billion a year ago.

But results for the second-largest U.S. oil company missed Wall Street forecasts and shares fell.

Like its competitors, Chevron made the bulk of its money at its exploration and production arm, also known as the upstream, where income nearly doubled from a year ago to $7.25 billion.

Chevron said the average sales price for crude and natural gas liquids was $109 a barrel in the quarter, up from $57 a barrel in the year-earlier period.

In addition to Chevron, soaring commodity prices led to record quarters for Exxon Mobil Corp., ConocoPhillips, BP PLC and Royal Dutch Shell PLC. Exxon Mobil stood apart even from this crowd, logging the largest ever quarterly operating profit for a U.S. company. Barring companies that made huge profits on one-time gains like bankruptcy settlements and spin-offs, Exxon Mobil holds the top 10 records for biggest U.S. quarterly earnings.

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French energy company Total SA said Friday its profit climbed 38.7 percent in the second quarter to $7.38 billion. Quarterly sales rose 23 percent to $75.25 billion.

Altogether, the profits of the six companies jumped more than 40 percent in the second quarter to $51.5 billion, the first time big Western oil companies have ever reached that level.

Total's earnings were at the top end of analysts' expectations.

Unlike some other oil majors, Total reported production growth of 1.3 percent in the second quarter.

Also Friday, Norway's state-controlled StatoilHydro ASA reported a 37 percent rise in second-quarter net profits to $3.7 billion.

At Chevron, the company division that refines and sells gasoline actually swung to a loss of $734 million in the quarter after earning $1.3 billion a year ago. The culprit: those same crude prices that lifted upstream earnings.

Like its peers, Chevron doesn't produce enough oil on its own to feed its refineries, forcing it to buy some on the open market. And it wasn't able to raise the price of gasoline and other products fast enough to recover its own rising costs for oil.

Chevron also said that planned downtime at some refineries contributed to the loss.

"The higher cost of crude oil used in the refining process was not fully recovered in the price of gasoline and other refined products," said Chairman and CEO Dave O'Reilly. "As a result, our downstream operations incurred a loss in the second quarter, with most of the loss taking place in the United States."

Chevron said overall production in the quarter fell about 3 percent from a year ago, hurt in part by production-sharing contracts. However, on a conference call with analysts Friday, company officials said project startups will increase production in the second half of 2008 and the company should meet or exceed its full-year volume target.

Chevron shares slipped 71 cents in afternoon trading to $83.85. They've traded in a range of $76.40 to $104.63 in the past year.

Total shares fell 1.2 percent to 48.79 euros ($75.95) in Paris.

____

Associated Press Writer Angela Charlton in Paris contributed to this report.

Comments

[jimstaro]

Ahhhhhhhhh, Love The New Math 'Trickle Down' Capitalist Economy!!!

The old way, as screwed up as that was, seemed to work pretty good, but guess the Greedy weren't Getting Extreeeeee­eeeeeeeeem­ely Wealthy Fast Enough, gonna be a bitch trying to get all that dough into hell with their corrupt souls though!

[beerguy]

If you do the math you will find that the oil companies are earning the same 7-10% profit margin that they always have. With the world market price of oil increasing as it has you will obviously have greater revenues and greater profits from those revenues while maintaining the same profit margins. Exxon made 11 Billion in profits but paid 34 billion in taxes and I would bet you would find similar ratios with other domestic oil companies. Exit questions: How much is the governments share would you on the left consider fair? How many of you have mutual fund in IRA's or retirement funds at work that may have some of their portfolios invested in oil company stock? Just wondering

[danoj]

Haven't ya figured out Dems don't care that they are still only earning 7-10%, they need a scapegoat. For 35 years they havehad no energy policy, not that repubs are any better as far as that's concerned. if they can sucessfuly blame someone though they won't have to fix the problem and can kick down the road for another 10+ years.

[photog606]

Actually its not even a 7-10% margin...

"As you can see here, 72% goes to the price of crude oil. Another 16% is eaten up by refining, distribution and service stations, and the last 12% is taken away by taxes. That is a total of 100%. That is right, Nation. Oil is a zero-profit business."
http://www.crooksandliars.com/2008/05/09/the-colbert-report-oil-profiteering/

[fact finder]

No matter what the percentage paid in tax's a PROFIT means after all expenses. So they paid 34 billion in tax's .? no way read the article posted yesterday on the Huffpo. Besides with all the tax breaks and incentives Congress gives them that 34 billion went right back to them. GET ALL THE FACTS BEFORE YOU SHOOT OFF. A RECORD profit is a RECORD profit. They get the GOLD and we get the SHAFT.

[StephenJK]

Yeah, same ol same ol, right beerguy?

http://www.americanprogress.org/issues/2008/02/high_oil.html

You're the second oil guy to come through this week talking about profit margins and other wall street speak. Give it a rest. Obviously, you are not affected by the price of high oil. The corporate redistribution of wealth, that is stealing from the poor to give to the rich, is A-OK with you. Not with me. No way, no how.

[Bushwillresign]

My buddy wanted to take me fishing in his boat and he said he would take care of everything, the bait, food, refreshments, etc. and the I would just have to pay for gas. We went to the pump and he filled up and I didn't have enough money. I only had enough to go out, but not enough to get back to land.

[Davwbaird]

you got that right.

[FreedomBeforeDemocracy]

Maybe if more people understood profit margin and other "wall street speak", the politicians wouldn't be able to so easily demagogue this issue. I won't say there isn't any corporate redistribution of wealth, but that what happens when you have an all powerful, "progressive" government. They tend to use the power in ways that are more beneficial to them than you. Although congress has raised its approval rating to 20%, only 10% behind Bush.

And everyone is affected by high oil prices. I'll assume you're not one of those people that feel oil is too high, so we need to switch to a more expensive alternative.

[Bushwillresign]

I had to read this "beerguy" a few times and I still couldn't find anything that is true in the whole piece of garbage. The oil companies should be paying us $4.00 a gallon for using their gasoline. If you were in Florida when the last hurricanes hit you would have seen how many hotels upped their prices. Same thing going on with the oil folks. A few hotels got busted, we're waiting for the oil companies for same.

[Jeff1958]

Wow. Better luck in some other forum, Beerguy. I know math and your number don't add up. In fact it's full of contradictions.

Here's an easy one: "Exxon made 11 Billion in profits but paid 34 billion in taxes..." Maybe in bazarro-world but not on planet Earth.

And another: "...oil companies are earning the same 7-10% profit margin that they always have." What part of RECORD PROFITS don't you understand? Every freaking quarter. This quarter was $50 billion. If they make the same profit margin they always make, how do they keep having record profits?

This has nothing to do with left or right. It has to do with our society changing for the worse, and one of the reasons is our dependence on oil. It's not logical to excuse giving more and more money to a few oil companies unless you have a vested interest in those companies. I maintain no real American has a vested interest in oil, not if he values our society. Under our current (mis)admin­istration, the cost of Iraq is draining our economy financially. They are failing us miserably by maintaining our addiction to the tune of $50 billion this quarter. Add Iraq ($36 billion). They're failing us.

[instagladiator]

The majority of the American public never cease to amaze me. You are "so" caught up in your own lifestyles of materialistic "must have's", that you've forgotten (or never learned) how to provide for yourselves? You can complain until the cows come home, but you will never be able to change the way things are done in the US until you, and your fellow countrymen, do something about it yourselves. What can you do? Simple. It's called r e v o l u t i o n. Think about it.

[Honeywell]

Now, someone is talking good sense here! Have you seen a drug addict and how he/she behaves? Well, that depicts the image of the majority of Americans who are so addict to oil. Watch those who drive those monster-size SUVs and you'll see.

[StephenJK]

There is NOTHING addictive about our NEED for oil. PERIOD! It's a NECESSITY in America's situation.

We were stupid to promote the highway system. Plain and simple. Now it may have been made that way to promote growth. That is to say more money exchanging hands, more jobs and bigger, better economy. Well, that chicken has come home to roost now.

[pcplz]

I thought that the rise in the cost of oil was because of limited supplies, or so they told us. It was supposed to cost more to buy each barrel, if so..........how did they make so much $$$$???

If we drill off shore, won't that just be giving more to the big oil companies?? We would have to share that oil with all of the world, see little of it for America. Why do we want to do this?

I believe that the wind always blows, the sun shines.....we need to use it. We for sure could fuel the entire east coast with the winds that blow from Washington. Pure methane!

[Davwbaird]

they will have more to export to China

[Bushwillresign]

"How did the they make so much $$$$???"

They are not buying and selling barrels of oil, they are buying and selling the "barrels" that hold the oil. I see... said Stephen Colbert.

"Pcplz" - you are correct by saying that if we let the oil companies get their grubbies on our offshore oil, they will sell the oil offshore where the countries actually have money that is worth more than the bush dollar.

They (the oil companies) can have all our oil, if they pay each American 50 large. Kids, grannies, grandpas, adults, every American. That's $50,000 per year, not just one lump-sum payment. They (the oil companies) can afford it.

[StephenJK]

Oh the poor oil companies! They need some help, people! Without our help they'll become meaningless shells (no pun) of themselves. We need to drive a lot more and help them find ways to push the price. Sky's the limit! My hope is that they'll eventually be able to get 25%-50% of my pay because I really feel they are the most important thing in this world. Without them I wouldn't be able to drive to work, mow my lawn, eat food or drink beer! The big oil companies are our saviors! They're SOOOOOO dreamy!

[ChristianEcon.com]

Maybe they should all put a donation cup at each pump so people can add a little something from the goodness of our hearts and give their profits a little more of a boost.

[danoj]

ya know if the American companies don't get your cash the saudis will. Would rather give to American companies personally, at least they aren't funding terrorists. That being said, gas prices are to damned high.

[PierreLeClerke]

Your lack of knowledge and basic logic is astounding.

[k6007]

A city in Ga, converted all their school buses to run on used vegetable oil.

A dairy farmer in Ca, runs his entire operation on the methane gas produced by his herd's excrement.

For an extra 6,000.00 dollars you can purchase a vehicle that can be filled using the natural gas line in your home.

Hemp, electricity, bio-waste, hydrogen, steam....the list goes on.

Willful ignorance should be a sin.

[MarkInEugene]

I'm now riding an electric bike to work 26 miles round trip. It costs 10 cents a charge which lasts 62 miles. It's powerful and fun to ride. I've stopped driving my excellent Honda Civic Hybrid to work. I now only use it occasionally on the weekends.

If everyone took a look at their lifestyle, they could find alternatives that don't compromise it.

Electric bikes, scooters and motorcycles are getting better and better because the batteries are getting better and better!

[gitrdone]

Just wait until the air compressed cars come on the market here in N.America (whenever oil funded politicians allow it), because it costs only about $3 to fill the tank for hundreds of miles. They drive close to 60 miles per hour and it can take a matter of minutes to recharge the tanks with a really fast compressor. Compressed air is probably the most reliable energy storage around! Theres many applications for it too, like putting speed bumps on the road that when your car drives over them....the weight of the car presses down and compresses the air into a local storage tank which can be used for other applications like lighting the city lights. Because this compressed air can run a generator in return. It's incredible stuff.

Europe will have air cars on the market this year and Mexico has ordered a fleet of 2000 air cars for their taxi fleet around the city, to reduce the amount of smog.

Air cars are definitely part of the future, next to hydrogen, bio-deisel, natureal gas and electric.

[wm1066]

When Spain gutted the americas of its gold in the 15 hundreds you would have expected Spain to rule for a thousand years but a funny thing happened, the rest of Europe raised thier prices on goods and Spains record profits didn't really work out for them. Of course Spain kicked out everybody that they didn't like and thier was a real brain drain and that also led to Spains fall into second rate status but with all that gold they couldn't make it work for them.
What will the oil companies do with all the gold they stole from us?

[Podewumun]

Move to sunny southern France and ruin it, too.

[robbor]

Big Oil's Record Quarter: $51.5B In Combined Profit

and they did it without pistol whipping anyone

[StephenJK]

Because a shotgun in the mouth of consumers works just fine.

[The Impartial]

Yes, they do INDIRECTLY with the sacrifice of our men and women in the services in Iraq, with our tax money spent by this administration (reference to our US deficit).

[ChristianEcon.com]

Good point since--as we all know--"pistol whipping" is the only possible form of injustice known to mankind.

[trollsbwild]

Nah, they just sent out their lobbyists to get tax breaks, etc. Why are they getting $33 billion over the next five years?
Why aren't they paying a fair share of tax when they are receiving most of the benefits of the war? Why are they not lowering prices on their own to help sustain the auto, airline, and other industries?
When, if ever, is there enough?

[Podewumun]

You know what they say, "You can never be thin enough, tanned enough or rich enough.".

[MarkInEugene]

It's time America has stopped dancing around this issue!
It's time we stopped getting burned by Big Oil!
It's time we stopped dumping millions of tons of CO2 into the atmosphere!
It's time we stopped spending $750 million/day on wars over it.
It's time to switch to alternatives.
It's time, It's time, It's time!

How long do we have to delay the inevitable !!!!!!!!!!!!!!

[Jeff1958]

I'm not expecting anything to change until Jan 20, 2009. Then it will be time.

[TLV]

My brother in law will be getting a $125,000 signing bonus for doing civilian Army work in Eye-rak. I have a friend whose brother will get an $80,000 signing bonus for regular Army re-enlistment. These are just TWO guys out of many! Will big oil be paying for these bonuses?

[instagladiator]

They already have! Wake up and smell the coffee.

[gitrdone]

Slaves to the oil industry because they have their hands in politicians pockets and vice versa.

[The Impartial]

No, WE, WE, the tax-payers are indirectly paying for all that as this administration is still supporting the BIG Oil.

[falco]

Drilling off shore will not stop the powers that be. They will have their grubby paws all over the profits from owning (controlling) this oil, the refineries, and the ablility to stop and/or start production to control the price we pay. It will be the same game, same players, different continent. We, the people, have to be kept in a certain pay bracket for the social system - you know, the one which benefits the guys at the top - to continue and stay in place. The elites need worker bees, thus worker bees cannot jump class. To prevent us from jumping class: high priced oil, high priced health insurance, high taxes, high priced food, high priced housing, stealing of retirement funds, you name it, the syndicate owns it and controls us by controlling all our means to get ahead. It's benevolent fuedalism that is becoming less and less benevolent.

[lisakaz2]

When was it benevolent? I'd say just more and more insidious and totalitarian.

[enlighteninglad]

There was a period when the middle class had opportunities to move up the social ladder. Now all that is being taken away by putting more of the tax burden on the middle class and forcing them to use the limited funds they have just to survive. Any gains the lower and middle classes have made in the past several decades is being stripped away and its mainly due to the laws and policies of the last seven years although one has to admit it didn't start there. It was just accelerated during this time.

[StephenJK]

Nothing benevolent about feudalism.

[groucho]

And we can help them make more money, by letting them mess up some more pristine land or offshore drilling. Yeah, big oil. They are so rich, so white, so fat.

[ohiomark]

I'll bet the government wouldn't want to do without the billions and billions of dollars in tax revenue that they already recieve from the evil "BIG OIL".

What about the government "windfall profits" they get from "BIG OIL"?

[TLV]

Will big oil start buying up all of the landfills? Anything carbon-based can be turned into oil.
http://discovermagazine.com/2006/apr/anything-oil

[The Impartial]

THAT'S CALLED "BRIBERY", isn't it ? And I would call it ROTTEN GOVERNMENT including those in Congress that work FOR them.

[greylox]

**It's amazing how much profit you can turn when you can get someone else to pay for your wars.
(I think it's clear that they're quite capable of paying their own way.)

[lisakaz2]

They make record profits and the GOP wants to send them chocolate and flowers -- and of course more concessions. Do they own this country?

[chronic]

Yes.

[The Impartial]

They do not. They STOLE this country of ours.