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

[DaOne]

http://www.youtube.com/watch?v=SkUj9EIINIs

[doug108]

The American people truly are dimwits. Gouge us all you like, sirs. Pull down profit hand over fist, sirs. Oh, and be our guests to start drilling offshore. Please, by all means, f*ck us as hard as you can.

[k6007]

And, they didn't even pay for dinner!

[eugenegerard]

Let them drill, Let them drill. Excuse me. I got that wrong. Let them get more rights to drill and not drill. Let them get more rights to drill and not drill. I do't know. It just isn't as catchy

[missjulz]

LOL! dead on!

[lthuedk 1]

Stolen fortune. Remember the prices of gas before Cheney's Conspiracy to steal oil? Prosecute the conspirators.

http://www.light-to-dark.com/we_are_the_law.html

[Podewumun]

Ever notice whenever Congress starts talking about taxing "windfall profits", the oil companies start moaning about how they operate under "razor thin" margins?

[tkondaks]

Their margins are about 10% of revenues which are, until recently, less than the margins the various government gets in taxes and excise taxes from the oil companies.
As for "windfall profits", if Obama is elected and he, according to his plan, implements them, who do you think will ultimately PAY for them...the stockholders of the oil companies?
No, of course not.
You and I will pay...at the pump. The oil companies will simply jack up the price, which is their right to do.

[lisakaz2]

I took econ 101. How do "razor thin" margins yield record profits?

[mjt218]

The refining portion of the business does run on tight margins. Right now most of the oil being produced was developed based on economics associated with oil at $20-$50. As a result, the upstream end of the business has some pretty big margins right now. It does say this in the article if you read it.

[fiberoptimist]

GOOD FOR THEM - now they can pay for Operation Iraqi Liberation (O.I.L.)

[ohiomark]

Nobody ever seems to mention the billions and billions of dollars in taxes that these "evil" oil companies pay in taxes to federal, state and local governments.

Exxon-Mobil's tax rate is currently at 49% and they paid over 11 billion in taxes in the second quarter alone.

[Trucker777]

Why criticize Big Oil for taking advantage of the opportunity (whether legal or illegal) to make a profit when the blame should land squarely in the halls of Congress and the Executive Branch of our government.

To solve our energy problems we need people in government that are trained in the sciences and engineering to comprehend, evaluate, and put in place incentives and legislation that will inspire technical solutions?

Yet, we continue to elect lawyers, accountants, and those with liberal arts degrees to represent us and expect these naive individuals to solve our energy crisis.

Lets get real, people. To meet our energy needs will require a combination of geothermal, solar, wind, and ocean movement technology all working in harmony to produce a storeable, transportable, and clean fuel like hydrogen.

We do not need expensive fossil fuels and nuclear energy if we want a clean and safe environment.

[enlighteninglad]

We have lawyers and accountants etc. as our "representatives" (although lately they are doing ANYTHING but represent the people) because those are the types of people that can withstand the slime that is Washington. Get honest people (like Ralph Nader?) and they will just get bypassed and pis sed on because the 2 party system is a lock. The pols have set up the rules and the only way to gain access is by playing by their rules. And one of the rules is that you have to roll around in the muck with them. Ewww! What self respecting person with integrity wants to do that? One can only hope that Ob is the one that will break through but it may turn out that he is just more of the same. I hope not.

[LiberTLover]

JohnnieMac can expect a few million for his campaign coffers this month, instead of the measly $1 million last month. I'm sure he is making a toast to his pals and having a good laugh at the taxpayers expense as we speak.

[Honeywell]

Americans' addiction for oil is responsible for the destruction of this planet and the sickening injustice in this country. It looks like the oil cartels are laughing all the way to the bank while the rest of the country are crawling on the floor looking for pennies to buy more oil. At the same time, the real solution is ignored: the renewable energy solution. But then again, those oil companies hate renewable energy because they want to enjoy their wealth and their control on those addicts. It would surprise me to learn that some this $51.5 billion in the pockets of those politicians, who are supposed to protect us from evil: the big oil. Don't forget American taxpayers have spent over $500 billions to fight the oil war in Iraq while the oil cartels are raking in $51+ billions. Americans are being screwed from both ends and they seem to enjoy it.

[lornejl]

If we just let them drill anywhere, and everywhere they will pass the saving on to us !

[Boboday555]

We already have leased them over 68 million acres here in America...­land remains UNDEVELOPED!
In fact Democrats tried to force the scummy oil industry maggots to use the land they already have before risking some of the most productive fishing grounds on earth yet the bought and paid for republican dirtbagas in congress killed the bill!

GROW UP BUSHIIES..­.being perpetual children just isn't cute anymore!
Our country is at risk for Chirst's sake!

[LiberTLover]

I think they are being sarcastic.

[yellowdawgdem]

"Thank you g.o.p. for all the money. Our lobbying sure paid off Big Time."
-Exxon-Mobile,-

"Now please, if you let us drill offshore, we promise that the American consumer will get more oil (in ten years, unless we sell it to India or China). '"
-Shell-

"Maybe, we'll even let you keep a few pennies of the mccain 18 cent federal gas tax cut."
-Chevron-

"We love mccain and gave him big campaign donations to prove it."
-BP-

[NevadaLiberal]

I wonder how much crude we could get by rendering down the neocon 25% who still support Bush? It could be enough to solve the "energy crises" and then Obama wouldn't have to look like a fool for switching and flipflopping on offshore oil drilling. :)

[Boboday555]

Offshore drilling would be a moot point if the idiots on the right would simply read a newspaper.
3/5 of the federally leased land we've ALREADY leased to the grotesque oil industry remains UNDEVELOPED!
Two weeks ago the traitorous GOP killed a bill that would have forced the foul, un-American oil industry to "USE THAT LAND OR LOSE THAT LAND!"
If the un-American GOP was truly serious about more drilling they would have been drilling already on the land they already have!
My five year old understands this.
It's just too bad the GOP is made up of people with the emotional maturity of a four year old!
FOX-KIDS is not news you conservative morons!
It's a 24 hour a day, 7 day a week 527 PAC ad by the traitors in the GOP!

[mjt218]

Are you a geologist? Do you know anything about the lease development process? Before you start throwing numbers out and throwing smoke and mirrors like Fox News, read about the issues from an objective source.

[rollingdivision]

Exxon Mobil will pay more taxes this year than the bottom 50% of all taxpayers, combined. In the first six months or 2008, Exxon Mobil's after-tax income rose about 15% to $22.6 billion and Exxon Mobil paid $61.7 billion in taxes, by far a record. So yes they are making good profits and paying record taxes too.

[mouselion]

Good. Let 'em pay more taxes. Or hold their feet to the fire in being responsible for changing our energy infrastructure, keeping poor people warm next winter and gifting We The People like they do Republican politicians.

[Boboday555]

So Bushy, you just wrote that on $22.6 billion in profit Exxon paid $61.7 billion in taxes?
You MUST work for George W. AWOL's economic team or John McK-Street's campaign to come up with that math!

Your argument would hold a lot more...oil if scum like LEE RAYMOND didn't retire from Exxon with a cushy $400 million golden parachute!
The problem with the greed at corporations like Exxon and most of the filthy right is that they hit a threshold in their tiny little minds that says; "I don't care how many billions my company makes, I refuse to pay anymore taxes!"
Son, that's treason and so is the way these big oil executives have bought and paid for neo-con scum like McCain, Bush, Cheney, Lott, Abramoff, DeLay, Boehner, Gingirhc and of course Ted Stevens and his equally whorish son Ben!
Go sell your un-American crap on FOX-KIDS..­.they'll swallow anything!

[Honeywell]

If they actually paid all these taxes, I don't see any of that go back to the American people. Oh, I forgot... it's all spent in the war in Iraq.

[mjt218]

Our National Park system is funded by oil royalties collected by the Department of the Interior.

[Boboday555]

So Bushy, the company that made the largest profits in the history of history pays the most in taxes?
D'UHHHH!

"...and thanks again for tuning into the "Obvious Neo-Con Show" with your host, Cletus Ray Pinhead...­and make sure to tune in tomorrow with the first of our three part story on the fact that water really is wet! 'Til then, see ya'!"

[lornejl]

5 percent own 95 percent of the wealth, I'm sure that if fine with you, sucker.

[ohiomark]

And they are the ones doing most of the hiring.

Did you ever work for a poor person?