ConocoPhillips and Valero Earnings Are Up as Top Five Oil Companies Have High Expectations

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BP and ConocoPhillips announced their first quarter earnings today, in a week when the biggest oil companies have begun to release their 2011 profits. With rising gas and oil prices, analysts expect the five biggest oil companies to report that they are swimming in revenue.

ConocoPhillips announced that its first quarter earnings increased 43 percent to $3 billion from $2.1 billion in the same period last year. BP's first quarter earnings dipped this year -- $5.48 billion compared with $5.60 billion during the first quarter a year ago -- including a charge of $384 million related to the oil spill in the Gulf of Mexico.

Valero Energy, based in San Antonio, Texas, and the largest independent U.S. refiner, announced Tuesday a first quarter profit of $98 million "primarily due to higher margins for diesel and jet fuel," compared to a first quarter loss last year of $113 million.

Energy behemoth Exxon Mobil is scheduled to release its earnings Thursday while Chevron is slated for Friday. Marathon Oil, based in Houston Texas, will announce its earnings Tuesday.

"Given what we saw with rising crude oil prices in the first quarter, we can expect to see rather large increases in oil company revenues," said Stephen Shorck, publisher of the Shorck Report, an industry newsletter for the energy markets.

The price of light, sweet, crude oil futures settled Tuesday at $112.21 a barrel. Many analysts are waiting to see if oil prices will break the most recent high of Sept. 22, 2008, when oil settled at $120.92 a barrel.

But Shorck said motor gas receipts are decreasing at the pump, as drivers purchase less gas. Shorck said the decrease in driving could be a result of inclement weather, which is typical in the winter months, or drivers are beginning to alter their behavior.

The national average for regular gas is $3.88 a gallon, the highest since August 2008, according to the Department of Energy this week.

At a certain point, there is an inability for producers to pass along these higher costs to consumers, Shorck said.

"This will really come to roost in the second quarter for oil companies," Shorck said. "Sales will be higher, but net income will likely lag."

Whether the CEOs of the major companies receive a larger payout is yet to be seen. ExxonMobil's CEO Rex Tillerson has the spot of the highest paid energy executive for 2010, according to Equilar, an executive compensation data firm.

James Mulva of ConocoPhillips and John Watson of Chevron follow behind.

2010 CEO Compensation of Major Oil Companies, from Equilar

1. Rex Tillerson (Exxon Mobil): $21.5 million

2. James Mulva (ConocoPhillips): $17.9 million

3. John Watson (Chevron): $14.0 million

4. Peter Voser (Shell): $12.8 million

5. William Kleese (Valero Energy): $9.8 million

6. Clarence Cazalot (Marathon Oil): $8.8 million

7. Robert Dudley (BP): $6.8 million

The top three paid CEOs of U.S. oil companies are managing the second, third and sixth largest companies in Fortune's 2010 list of America's biggest companies.

2010 Revenue and Profits, Fortune's list of America's Largest Petroleum Refining Companies

2. Exxon Mobil, $284.7 billion; $19.3 billion

3. Chevron, $163.5 billion; $10.5 billion

6. ConocoPhillips, $139.5 billion; $4.9 billion

26. Valero Energy $70.0 billion; $-2.0 billion

41. Marathon Oil, $49.4 billion; $1.5 billion

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