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Earnings for U.S. majors up 34 percent Higher gas prices, foreign earnings, refinery profits power 23 firms Allen Baker Petroleum News Contributing Writer
The third quarter of last year was a great one for big U.S. oil companies, with a new government study showing just how much their combined profits rose.
Bottom line: $9 billion in earnings, up 34 percent from the 2002 quarter.
Major factors for the 23 big firms were higher prices for natural gas and a huge jump in refining earnings, according to the Energy Information Administration.
The companies in the EIA compilation span a broad range — from vertically integrated majors such as ExxonMobil and ChevronTexaco to smaller specialized operations including Tesoro and XTO Energy. Upstream improves Higher prices gave upstream operations a 61 percent gain in profits, to $4.9 billion, even though domestic production of both oil and gas declined by more than 3.5 percent for the listed companies. The major companies said that asset divestitures, often to smaller firms, and natural field declines caused the reduction.
Add foreign operations and the overall upstream gain was 56 percent, to $10.7 billion, as foreign earnings continued to run ahead of domestic profits.
Foreign production was 7 percent higher for oil and 3.1 percent higher for natural gas, and the companies that report separate foreign upstream showed a profit gain in that arena of 19 percent.
Foreign oil production represented 56 percent of the total crude flow for the big companies, while domestic natural gas amounted to 59 percent of the total gas production.
Domestic natural gas was a big profit driver, with U.S. wellhead prices rising 65 percent from the third quarter of 2002 to the same period in 2003. The 2003 quarter was the fourth straight period of rising prices for gas, after five consecutive quarters of falling prices, with the numbers compared to the year-earlier period.
The world crude price rose 6 percent from the third quarter of 2002 to the third period of 2003, averaging $27.37 a barrel in the 2003 quarter compared with $25.91 a year earlier. Those figures are based on the average U.S. refiner cost for imported crude. Refining net skyrockets Refinery throughput rose nearly 8 percent domestically and close to 4 percent internationally. But it was higher margins that more than quadrupled profits to $3.1 billion from $650 million a year earlier.
Looking at domestic refining alone, third-quarter 2002 profits rose 362 percent to nearly $2.2 billion from $467 million in the same quarter a year earlier.
Chemical operations of the majors were the laggard, with profits declining by 43 percent as the companies had to pay more for their feedstocks. Revenues rose 27 percent to $180 billion for the 23 companies, up from about $142 billion in the 2002 quarter. The Energy Department agency subtracted unusual items from the totals in its compilations.
The full report is available at www.eia.doe.gov/emeu/perfpro/news_m/index.html.
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