Although most of the attention lately has been on the high price of oil and gasoline, U.S. oil companies got a boost from chemicals in the second quarter. For five major oil producers that also make chemicals, earnings from chemical operations increased an aggregate 44.0% to a total of $809.0 million. Most of the companies do not break out sales for their chemical segments.
At ExxonMobil, the largest oil company and the largest chemical producer among the group, earnings from chemicals rose 38.3% to $607.0 million. Chairman Lee R. Raymond attributes the increase to “higher worldwide margins and record sales volumes.”
The largest percentage increase was ConocoPhillips’ 283.3% earnings jump to $46.0 million. According to the company, the increase reflects higher volumes at Chevron Phillips Chemical, its joint venture with ChevronTexaco, particularly in the olefins business line.
ChevronTexaco’s chemical earnings rose 73.5% to $59.0 million. The company says results from its Oronite subsidiary improved on higher margins for lubricant additives. ChevronTexaco also saw increased sales volumes and higher equity income from Chevron Phillips.
Occidental Petroleum earned $85.0 million, up 26.9% from earnings excluding one-time items in the same period last year. The company notes higher sales volumes for all major products and higher prices for vinyl chloride, polyvinyl chloride, ethylene dichloride, and chlorine, partially offset by lower caustic soda prices and higher ethylene and energy costs.
And at Sunoco, earnings rose 20.0% to $12.0 million as sales volumes rose 3% for phenol and related products and for polypropylene.
For the first six months of 2004, chemical earnings at the five oil companies rose 80.0% to $1.55 billion.