By the OGJ Online Staff
HOUSTON, July 24 -- Chevron Corp. Tuesday reported record net income of $1.32 billion for the second quarter, compared with $1.11 billion for the same quarter last year.
Excluding the effects of charges for special items in both quarters, earnings on an operational basis increased 21% to $1.384 billion.
For the first half 2001, Chevron reported record net income of $2.92 billion, compared with $2.16 billion in the 2000 period. Operating earnings were $2.98 billion for the 6 months, compared with $2.247 billion for the same half last year.
Dave O'Reilly, chairman and CEO, said, "We had an excellent second quarter. Nearly $1.4 billion in operating earnings for the period contributed to achieving a 23% return on capital employed for the past 12 months.
"Our upstream business -- exploration and production -- continues to be the major contributor to overall profits," O'Reilly added. "However, the improvement in earnings from the year-ago quarter was largely driven by our US downstream operations -- refining, marketing and transportation."
He said, "Capacity utilization at our refineries was higher than in last year's quarter, allowing us to benefit from the improved industry market conditions."
O'Reilly said financial results for the Caltex Petroleum Co. affiliate in the Asia-Pacific region remained depressed due to excess supply conditions and weakened demand.
"We boosted net oil-equivalent production in both the second quarter and first half of 2001 by 3% compared with the same periods last year. I'm especially pleased that natural gas production in the US rose 2% from the 2000 second quarter, the result of a focused drilling effort in the Gulf of Mexico. This production increase came at a time when our average US natural gas realization improved 65% from last year's second quarter to $5.52/MMcf."
He said average US crude oil realization of $23.87/bbl was down 6%.
O'Reilly said Chevron's merger with Texaco Inc. still is on track and is expected within the original 12-month time frame.
He said discussions continue with the US Federal Trade Commission and "Work teams from Chevron, Texaco, and Caltex have designed an organization that will move quickly to capture the significant savings from operating synergies offered by the merger."