Chevron Q3 production rises, downstream flat

SAN FRANCISCO (Reuters) - Chevron Corp (CVX.N) said higher oil prices would lead to significantly better profits from exploration and production in the third quarter than the previous one.

The second-largest U.S. oil company said on Thursday its downstream results, on the other hand, would be flat, with depressed refining margins holding broadly steady overall.

Chevron's U.S. oil-equivalent production in July and August rose 6 percent to 741,000 barrels per day from 700,000 a quarter before, while international output fell 24,000 bpd to 1.946 million.

The total of nearly 2.69 million bpd is ahead of Chevron's increased 2009 output forecast of 2.66 million bpd in July.

About half the international output decline was due to civil unrest in Nigeria, while the U.S. growth was driven by the startup of its Tahiti platform in the Gulf of Mexico.

Benchmark U.S. crude oil futures prices averaged $68 per barrel in the quarter, up from nearly $60 in the second quarter, but down from $118 in the same quarter a year ago.

Chevron anticipated "unfavorable" foreign currency effects in its results, as the dollar fell by 4 percent versus a basket of currencies .DXY over the third quarter.

But the company said upstream results would benefit from $400 million connected with project approval and sales of interests in its $37 billion Gorgon gas project in Australia.

Chevron reports third-quarter results on October 30. Prior to Thursday's update, analysts had expected a profit of $2.7 billion, or $1.39 per share, on revenue of $46.2 billion, according to Thomson Reuters I/B/E/S.

That's up from 87 cents per share last quarter, but a far cry from the $79 billion in revenue and $3.85 per share earned by the San Ramon, California-based company in the third quarter last year, when oil futures prices hit record highs.

DOWN BY THE BAY

Chevron's U.S. refinery crude-input fell 55,000 bpd, or 6 percent, mainly due to maintenance at its San Francisco Bay refinery.

Third-quarter refining margins rose on the U.S. West Coast by nearly a dollar a barrel, but fell on the Gulf Coast by about the same amount. They are squeezed across the industry as rising prices for the input, oil, are not matched by growth in demand for what refiners produce, due to economic weakness.

Rival ConocoPhillips (COP.N) warned last Friday that its results would take a hit from low North American natural gas prices, though that was expected and its plans for a higher dividend and asset sales lifted its shares in the past two days.

Chevron shares rose 0.8 percent to as high as $72 in after-hours trading Thursday, after closing 1.3 percent higher at $71.45, on a day when Conoco jumped 3.4 percent and Exxon Mobil Corp (XOM.N) rose 0.6 percent.

Chevron's stock is down 3 percent in 2009, compared with a 14 percent rise for the Chicago Board Options Exchange index of oil companies .OIX, with energy production-focused rivals faring better than those in the slumping refinery business.

(Reporting by Braden Reddall; Editing by Tim Dobbyn)