Oil Companies Reap Rewards of Higher Prices for Crude

By <a href=www.nytimes.com>BLOOMBERG NEWS

oyal Dutch/Shell and ChevronTexaco said yesterday that their first-quarter earnings more than doubled, capping a series of strong results for the industry as the price of crude oil rose.

Earlier this week, Exxon Mobil and BP reported sharp gains for the quarter, when crude oil prices climbed to a 12-year high and refining margins widened. Prices have since fallen by a third, signaling lower earnings over the rest of the year.

"This may be a high-water mark for the oil companies," said Timothy R. Ghriskey, who manages $100 million in assets, including an undisclosed number of ChevronTexaco and Exxon Mobil shares, at Ghriskey Capital Management. "Oil prices have already dropped, and you are likely to see second-quarter profits lower."

Shell, the British-Dutch giant, said net income jumped to $5.33 billion from $2.26 billion a year ago.

At ChevronTexaco, the next biggest oil company after Exxon Mobil, profit rose to $1.92 billion from $725 million. Sales climbed 53 percent at Shell and 46 percent at ChevronTexaco.

ChevronTexaco's profit was the highest since the company was formed through Chevron's acquisition of Texaco Inc. in 2001. The company's exploration and production earnings rose 73 percent from a year earlier, to $1.97 billion. Profit from oil refining was $315 million after a $61 million loss a year earlier.

Higher natural gas prices contributed to the profit gains.

In the first quarter, crude oil futures averaged $33.80 a barrel, up 56 percent from a year earlier. Prices have since fallen to about $26, with forces led by the United States taking control of Iraq and oil shipments resuming in Venezuela after a national strike. In addition, Shell and other producers have restarted wells in Nigeria that had been idle because of fighting between government and opposition forces.