ConocoPhillips CEO says record crude prices a foe

By Anna Driver

HOUSTON (Reuters) - The CEO of ConocoPhillips (COP.N), the third-largest U.S. oil company, said on Wednesday world crude oil supplies are adequate and not to blame for record prices, which have taken a toll on the industry.

Big U.S. oil companies have been on the defensive in recent months as consumers and politicians are increasingly blaming them for record gasoline prices.

"High oil prices have not really been our friend as an industry," Chief Executive James Mulva told the company's annual meeting.

Soaring crude oil prices have hurt energy companies by driving up costs for goods and services and by prompting national oil companies to renegotiate the terms of production deals, Mulva told a news conference after the meeting.

Still, in the 2008 first quarter Conoco's net profit rose 17 percent to $4.14 billion.

OPEC nations such as Saudi Arabia and Kuwait have plentiful inventories of crude oil, Mulva told reporters.

Factors influencing oil prices include speculation, geopolitical tensions and rising demand from countries like India and China, Mulva said.

More public attention on environmental matters also has made it more difficult to obtain federal and state permits, which has hindered the company's ability to invest in projects like adding refining capacity, Mulva said.

The energy company chief also said he did not expect any changes to its oil sands joint venture with EnCana Corp (ECA.TO) following the Canadian company's plans to split into a natural gas company and integrated oil sands producer.

Shareholders voted down a number of proposals related to the environment, on issues including global warming, greenhouse gas reduction and the environmental impact of the company's operations.

Even so, Tom Borelli, portfolio manager with the Free Enterprise Action Fund, told Mulva he was fighting a losing battle to change public perception of the oil industry.

"This is a war against fossil fuels and you will not be liked no matter what you do," Borelli said.

To shore up ConocoPhillip's public image, Mulva told the meeting the company needed to talk more to federal and state legislators and talk more to the media.

Shares of ConocoPhillips ended off eight cents at $88.54 on the New York Stock Exchange.

(Editing by Carol Bishopric)