Chevron said on Friday that profit jumped 43 per cent in the second quarter as higher oil and petrol prices made up for a decline in oil production.
The report continued the trend of soaring profits among the major oil companies.
The San Ramon, California oil company reported earnings of $7.7 billion (Dh28.28 billion), or $3.85 per share, for the three months ended June 30. That compares with $5.4 billion, or $2.70 per share, a year ago. Revenue increased 31 per cent to $66.7 billion.
Analysts had expected earnings of $3.51 per share, according to FactSet.
Chevron's quarterly profit was the largest since it set a company record of $7.9 billion in the third quarter of 2008. It followed similar big gains for other oil giants. ExxonMobil's earnings rose 41 per cent to $10.7 billion while Royal Dutch Shell's profit nearly doubled to $8.7 billion. BP made more than $5 billion in the period following a loss of $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 US oil prices increased 46 per cent in the US and 51 per cent internationally from April to June. Natural gas prices increased 8 per cent in the US and 25 per cent 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 $7.5 billion into oil exploration and production projects in the quarter, up 69 per cent 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.
Still, Chevron said, 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, Chevron said it cut production by 700 barrels per day.
Brent, which is used to price many international crude varieties, rose by an average of $12 per barrel from the first three months of the year, Chevron officials said.
The company still expects production to grow roughly 1 per cent a year until 2014, and then 4 to 5 per cent a year from 2014 to 2017.
Meanwhile, Chevron's refining business boosted profits 30 per cent in the US, but profits dropped 11 per cent internationally. Higher fuel prices lifted profit margins, but foreign currency effects cut earnings at Chevron's international refineries.
Shares dropped 37 cents to $104.66 in afternoon trading.
From/ Gulf News