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Chevron’s quarterly profit soars to reach 3-year high

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NEW YORK » Chevron Corp. said Friday that profit jumped 43 percent in the second quarter as higher oil and gasoline 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, Calif., oil company, which operates the smaller of two refineries in Hawaii, reported earnings of $7.7 billion, or $3.85 per share, for the three months ended June 30. That compares with $5.4 billion, or $2.70 per share, in the year-ago period. Revenue increased 31 percent 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. Exxon Mobil Corp.’s earnings rose 41 percent 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 after 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 gasoline, diesel, jet fuel and other fuels also surged, boosting profit margins at refineries.

Chevron said U.S. oil prices increased 46 percent in the U.S. and 51 percent internationally from April to June. Natural gas prices increased 8 percent in the U.S. and 25 percent 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 plowed $7.5 billion into oil exploration and production projects in the quarter, up 69 percent from a year ago. It ramped up oil and natural gas production from new projects in Canada and the United States, and earlier in the year it acquired Atlas Energy Inc.

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.

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