Public ‘Confused’ in Resenting Big Chevron Profits, CEO Says

Chevron Corp. served up cream puffs for breakfast, pasta for lunch and a defense of oil company profits at a briefing for journalists Monday high atop its corporate headquarters here.

“There is a lot of confusion on the part of the American public,” said Chevron’s Chairman and Chief Executive Kenneth T. Derr, resplendent in pin stripes, tasseled loafers and Rolex watch.

Derr said that Chevron’s fourth-quarter profit, expected to be a record at $700 million, was “a one-shot anomaly” based on an average price of crude oil of $32 a barrel during the period.

Indeed, the executive displayed charts demonstrating that the prices Chevron charged for gasoline trailed “woefully” behind the company’s cost of crude when oil prices spiked upward last fall.

“I know it’s complicated,” Derr said, adding that the record profit stemmed from a windfall on the production side of Chevron’s oil and natural gas businesses.

In the event of war, Derr said, world oil inventories are sufficiently plump that “prices should not move up dramatically, but the facts are that they probably will” because of the “high degree of emotion with oil pricing.”

“I sympathize a little bit with the general public, which has trouble understanding,” Derr said, soliciting the assistance of “anybody (who) has a better way (to) explain it.”

But even the best explanation may not convince skeptics, Derr acknowledged.

“I think the American consumer doesn’t like oil companies,” said Derr, bolstered during the briefing by a phalanx of executives and public relations people. “We sort of epitomize bigness.”