07-25-07 by dugan
What’s up with Conoco Phillips reporting a 94% drop in it 2nd
Quarter profit, to a measly $310 million, but analysts were drooling over its record refinery profits, not a $4.5 billion writeoff of Conoco’s oilfields in Venezuela. Conoco’s refinery profits were up 38% ($2.4 billion this year vs.
1.7 billion last year) even
though its refineries produced slightly less gasoline and other
products than in the same quarter last year. It’s the same outlandish refinery profit pattern for all
of Big Oil.
What’s
Conoco doing with its $4.8 billion profit (pre-writeoff)? It recently announced that it would buy back
$15 billion dollars worth of its own stock this year, 11 percent of its
total stock. That’s money in the bank for Conoco, and boosts its stock
price.
The buyback is also money not spent on other important
things, including refinery maintenance, modernization or expansion.
Given constantly increasing profits on every gallon of gasoline its hapless customers buy, it’s not wonder the oil companies refuse collectively to invest enough in U.S.
refineries to alleviate the supply crunch that has disconnected the
price of gasoline from the price of crude oil this sprint. It was low supply that pushed gasoline to a $3.15 a gallon national record in May, not oil prices.
Your gasoline money, therefore, is Conoco’s stock buyback piggy bank. You motorists out there may want to e-mail Conoco president James Mulva and ask for a few shares of stock in compensation.
It’s [email protected], an address that didn’tbounce back when I tried it.