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NEW YORK -- ConocoPhillips reported a 75 percent increase in profit for the second quarter, boosted by rising prices for oil and natural gas and improved margins at U.S. gasoline refineries, reported the Wall Street Journal.
The lofty worldwide energy prices that drove Conoco's earnings also lifted earnings at British oil company BP PLC and should help other major oil producers reporting in the next few days.
In the quarter, Conoco benefited from strong earnings at its large refining business, though three refineries had either unscheduled or unexpectedly long shutdowns that sapped income and increased maintenance costs.
The Houston company reported profit of $2.08 billion, or $2.97 per share, compared with $1.19 billion, or $1.73 per share, a year earlier. Revenue grew 25 percent to $31.89 billion. A significant driver was the high prices realized for the sale of oil and natural gas. Conoco said crude oil prices have averaged $34 per barrel, up 35 percent from $25.19 in last year's second quarter. Natural gas rose 13 percent.
Like many larger energy producers, Conoco has struggled to maintain production levels. In the second quarter, the company produced 913,000 barrels of oil per day and 3.3 billion cubic feet of natural gas per day, down 5.6 percent and 5.5 percent from a year earlier, respectively. Declines in existing oil fields and sales of production assets contributed to the declines. The company said production, excluding asset sales, was flat from a year ago.
In an attempt to reverse the downward trend, the company is close to a deal with Russian oil behemoth OAO Lukoil that could drastically increase production.
While other large oil companies are waiting to see how the struggle between the Kremlin and another large Russian oil company, OAO Yukos, plays out, Conoco is negotiating a deal to purchase a 7.6 percent stake in Lukoil, valued at $1.7 billion, and commit an additional $3 billion in a joint exploration deal.