Chevron’s Q3 profit surpasses a record $5 billion

Chevron Corp., the second-largest U.S. oil company, saw its quarterly profit reach its highest ever, surpassing a record $5 billion. The San Ramon, California-based company said in a statement that their net income climbed to $5.02 billion from $3.59 billion, a year earlier. The profit works out to $2.29 per share, up by 40 percent from the comparable period in 2005.

A net income of $31.5 billion was reported by five of the world's largest oil companies combined, with the results being capped by Chevron during the three months that ended September.

“The July, August time frame -- that's when they made their money”, said Justin Perucki, analyst with Morningstar Research Company. “When everything's operating on all cylinders, it's easy to capitalize on those margins.”

The oil companies benefited from the soaring petroleum prices and extensive profit margins at the gasoline pumps. “They had production growth, and refining and chemicals did well as well,'' said Jack Aydin, an analyst at KeyBanc Capital Markets Inc.

These profits are being used by the critics to attack on Chevron as the Californians are preparing to vote on initiative Proposition 87, a ballot measure that would place a new tax of up to 6 percent on oil produced within the state. The oil-company is trying to beat the measure by showing that it is investing some of its profits into developing new oil fields and expanding two of its gasoline refineries.

Former President Bill Clinton and other Americans who are backing the initiative are flaunting the tax as a way to decrease California's dependence on foreign oil. Steve Crowe, Chevron's chief financial officer, said in a conference that the tax imposed by Proposition 87 could cost about $200 million per year to the company.

Chevron maintained that the worldwide oil prices are affected by everything from terrorism threats to shifting weather forecasts and their control is out of the company’s hands.