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    Chevron Touts 11 Percent Income Increase

    Upstream operations increase while downstream suffers.

    SAN RAMON, Calif. -- Chevron Corp. released its second quarter report underscoring a net income of $6 billion, compared to the same period last year when the company reported $5.4 billion. Earnings included a net gain of approximately $500 million on the sale of an investment and redemption of debt, the report noted.

    "Earnings for our upstream operations benefited from prices for crude oil that were significantly higher than a year ago," Chairman and CEO Dave O'Reilly said in statement. "Natural gas prices also increased between periods, contributing to a doubling of upstream profits from last year's second quarter."

    O'Reilly noted sales and other operating revenues were $81 billion, compared with $54 billion this time last year. First-half 2008 sales and other operating revenues were $146 billion, versus $101 billion in the corresponding 2007 period, he explained. "In our downstream business, the increase in the price of crude oil had an opposite effect," O'Reilly said in a statement.

    "The higher cost of crude oil used in the refining process was not fully recovered in the price of gasoline and other refined products," he said. "As a result, our downstream operations incurred a loss in the second quarter, with most of the loss taking place in the United States." According to O'Reilly, the effects of planned refinery downtime also contributed to the U.S. loss in the period.

    Due to positive cash flows, the company has been engaged in record-level investments. Major development projects include the previously announced start-up of the 68-percent-owned Agbami Field in Nigeria. O'Reilly explained the total maximum oil-equivalent production at Agbami is estimated at 250,000 barrels per day by the end of 2009.

    The report noted worldwide oil-equivalent production was 2.54 million barrels per day in the second quarter 2008, compared with 2.63 million barrels per day in the
    second quarter of 2007. Refinery crude-input was 816,000 barrels per day in the second quarter 2008 which was 65,000 barrels lower than this time last year.

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