Downstream margins boost Chevron earnings

Falling oil prices improved Chevron Corp.'s downstream operations and boosted the company's fourth quarter earnings to $4.9 billion or $2.44/diluted share.

By OGJ editors
HOUSTON, Jan. 30--Falling oil prices improved Chevron Corp.'s downstream operations and boosted the company's fourth quarter earnings to $4.9 billion or $2.44/diluted share from $4.88 billion ($2.32/diluted share) during the same period a year ago.

"We achieved much success in 2008," said Chairman and CEO Dave O'Reilly. "Record earnings and strong cash flows for the year enabled us to invest $23 billion in an attractive portfolio of capital and exploratory projects, buy back $8 billion of our common stock, and increase the dividend payment on our common shares for the 21st consecutive year."

Fourth quarter results included a $600 million gain from the exchange of upstream properties. Foreign currency fluctuations added $478 million, compared with a $2 million reduction in the last quarter of 2007.

Sales and other operating revenues were $43 billion in quarter, down from $60 billion a year earlier. For 2008, sales and other operating revenues were $265 billion, up from $214 billion in 2007.

US upstream income of $1.15 billion in the quarter was down $229 million from a year earlier. International upstream earnings of $2 billion fell $1.46 billion from the last quarter of 2007 due to lower crude prices, reduced sales, and higher depreciation.

US downstream earned $1.03 billion in the latest quarter, compared with a loss of $55 million a year earlier. International downstream income of $1.05 billion was up $788 million from the 2007 quarter due largely to gains from commodity derivatives and improved refinery margins.

Chemical operations earned $28 million in the quarter, down from $69 million a year ago. Earnings were lower for the company's 50% share of Chevron Phillips Chemical Co. LLC, but were partially offset by improved earnings at Chevron's Oronite subsidiary.

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