Shell, Oxy Profit Up in Quarter; Texaco’s Declines
Texaco Inc. reported a 21% drop in its second-quarter earnings Wednesday due partly to lower production and refinery slowdowns, while Shell Oil Co. and Occidental Petroleum Corp. said their profits rose during the period.
Higher crude oil prices benefited all three firms as did a steep rise in gasoline and other oil product sales prices. But the gains were partially offset by dwindling production.
Texaco’s profit fell to $366 million, from $464 million compared to 1988 results. The second-quarter 1988 results included a restructuring gain of $225 million from the sale of its West German unit. Revenue declined 10% to $8.4 billion.
Higher crude prices benefited Texaco’s exploration and production business, while a steep rise in gas prices in the quarter helped refining and marketing businesses.
But those gains were offset partly by declines in foreign exploration and production earnings stemming from last year’s platform explosion in the North Sea and the sale of Texaco subsidiaries in Canada and West Germany.
Texaco also said its refining margins were reduced by a softening of gasoline prices toward the close of the quarter and scheduled maintenance at three refineries.
White Plains, N.Y.-based Texaco is the nation’s third-largest oil concern behind Exxon Corp. and Mobil Corp.
Los Angeles-based Occidental Petroleum’s earnings rose about 4% from last year to $80 million.
It said quarterly earnings reflected extraordinary losses of $4 million in 1989 and $10 million in 1988 from the early payment of debt. Revenue rose 7% to $5.1 billion from the 1988 quarter.
Occidental’s Piper Alpha oil platform off Aberdeen, Scotland, exploded and burned July 6, 1988, in the North Sea’s worst oil disaster. Texaco and Occidental were two of four companies operating the field, where production has been delayed since the accident.
Occidental said the North Sea accident reduced its exploration and production earnings, but that was partially offset by higher crude oil prices.
Occidental said coal division earnings tumbled to $1 million from $3 million due to strikes by miners in Kentucky and Tennessee , who joined a wildcat strike in sympathy with a walkout against Pittston Coal Group’s operations in Virginia and West Virginia.
Houston-based Shell, the nation’s sixth-largest oil company, said second-quarter earnings soared 61% from a year ago to $440 million. Revenue totaled $5.9 billion, a 9% gain. The company is a unit of Royal Dutch Shell.