Oil Watchdog

Santa Monica, CA — Chevron looked like a loser to financial markets
today, but even with a 24% drop in profits from the same period the
previous year, its profits for the year are still running above last
year’s record level. That’s due to an all-time record profit of $5.4
billion in the 2nd quarter, much of it on gasoline, said the Foundation
for Taxpayer and Consumer Rights (FTCR).

"No one outside Wall Street can weep for Chevron or any of the
other major oil companies," said Judy Dugan, research director of FTCR
and its OilWatchdog.org project. "The outlandish profits of recent
years, almost entirely on the backs of motorists, allowed them to
ignore the long-term unsustainability of their core business. They
spent tens of billions of dollars buying back their own stock instead
of investing substantially in renewable energy and their existing
refineries."

Chevron is conducting an estimated $15 billion stock buyback this year.

Some analysts predicted that the major oil companies’ ability to
reap exorbitant profits from refining gasoline is drawing to an end
with record crude oil prices and higher operating costs. But, said
FTCR, the only proof of that will be in what happens at the pump,
particularly next spring. National pump prices for regular jumped
nearly three cents today to $2.942, according to AAA, and are up more
than 73 cents a gallon from a year ago. California is at $3.224, nearly
80 cents a gallon above last year at this time.

"If Chevron and others try to regain the refining profits they
reaped last spring of up to $1.00 a gallon for gasoline, motorists will
be paying more than $4.00 by early next year," said Dugan. "U.S. oil
companies have done too little, too late, to expand refining capacity
and level out price spikes like last Spring’s $3.23 national record,
which was unrelated to the price of oil."

Click here for more on refining profits.

To put the quarterly report in perspective, Chevron’s drop to
$3.72 billion in quarterly profit from $5.02 billion last year was its
second-highest third-quarter profit ever, said FTCR. And its nine-month
profit of $13.81 billion was well ahead of last year’s record 9-month
take, $13.37 billion.

One interesting point:

Chevron recorded a quarterly loss of $110 million in its U.S.
refining business. During the quarter the company began a new media PR
campaign called "Human Energy" described by a Chevron executive in the
Washington Post as costing "in the high tens of millions of dollars,"
at least half the amount of the loss. The ads were widely derided as
all image and no evidence of corporate citizenship. Click here for more on the ads.

For more information see: www.OilWatchdog.org.

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