Phillips Petroleum Co., which holds down fifth place on the list of oil and gas companies worldwide, said its second quarter profits were up more than expected, jumping 37% on crude oil, natural gas and gasoline commodity pricing. Phillips, in the process of acquiring Tosco Corp., said income excluding special items was up to $601 million, or $2.33 a share, compared with $439 million, or $1.72 a share for the second quarter of 2000. However, revenues were lower, falling to $5 billion from $5.4 billion a year ago.

CEO Jim Mulva credited increased crude oil production, higher U.S. natural. gas prices and “significantly improved refining, marketing and transportation results,” which showed a 19% increase over a year ago, for the stellar performance. Exploration and production earnings also rose, mostly because of high commodities prices. However, production alone jumped 21% in the quarter over a year ago.

“During the quarter, we continued to strengthen and grow our upstream portfolio,” said Mulva. “In Alaska, we announced several successful exploratory wells.” He said daily production on a boe basis increased to 823,000, up 21% over the same period a year ago. The increase mostly was attributed to higher crude oil production in Alaska, however; overall, U.S. crude production was up 61%, with non-U.S. production only up 2%. E&P net operating income was $504 million, up from $396 million from a year earlier.

Mulva also credited strong results from Phillips’ gas gathering, processing and marketing segment, which he said had lower operating costs. “Natural gas liquids prices were slightly higher than a year ago, but declined from average prices in the first quarter.”

Refining and marketing operating income jumped to $196 million from $86 million, mostly because of skyrocketing gasoline prices early in the quarter. Once the Tosco acquisition closes, the Bartlesville, OK-based company said it will add about 1.3 MMbbl/d of refining capacity to the business. It now runs three refineries with a capacity of 360,000 bbl/d.

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