Chevron Record Profits Include Downstream

The third-quarter results from the second-largest U.S. oil company on Friday  beat estimates and set another U.S. record for quarterly profits.  While smaller players have been forced to pare back investment, both majors will take advantage of their financial firepower and stick to their plans for capital spending, which totaled $15.8 billion for Chevron in the first nine months of 2008.

U.S. downstream earned $1 billion in the third quarter 2008, compared with a loss of $110 million a year earlier. The recovery in earnings was mainly the result of significantly higher margins on the sale of refined products and improved refinery operations.  International downstream income of $817 million increased $330 million from the 2007 quarter. Margins on the sale of refined products were higher in most areas. Last year’s third quarter included a $265 million gain on asset sales in Europe. Foreign currency effects benefited earnings by $63 million in the 2008 quarter, compared with $5 million a year earlier.

Investors are concerned that the credit crisis will trigger a global recession and cut energy demand, so the oil majors' spending plans are being carefully scrutinized.

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