Profits up for Chevron’s refining division

Refining margins for Chevron Corp., the United States’ second largest oil company, are triple what experts predicted due to strong demand for refined products in the Asian and Latin American markets.   Mike Wirth, executive vice president for the company’s refining and chemical business, states, “It is ill advised to believe that any renaissance in margins will sustain for a long period of time.  So we tend to plan and prepare our business for a pretty lean margin environment, which is what the industry has seen on average over the long haul.”  Wirth suggests that as long as countries build refineries, the market for refining crude will remain oversupplied.  Speaking at a recent conference, Wirth states that the downstream business is still pretty tough.  Last year, Chevron restructured its downstream business to be more competitive.  The restructuring included cutting 2,800 jobs and an investment in lubricants and petrochemicals.  Chevron’s earnings were reported as US$6.2 billion, with downstream earnings at US$622 million.  (May 3, 2011)