Wednesday, May 21, 2008 at 16:28
Also saw this story that might interest you..........cheers
08:56 21May08 RTRS-INTERVIEW-Crude oil is culprit behind pump prices-Chevron
By Chris Baltimore
WASHINGTON, May 20 (Reuters) - The day before facing a grilling from U.S. lawmakers about record-high gasoline prices, a top executive with No. 2 U.S. oil company Chevron Corp on Tuesday said that crude oil prices near $130 a barrel are the true culprit behind soaring pump prices.
"It seems like we are in the political season," said Peter Robertson, vice chairman of Chevron, one of five oil company executives slated to appear before the Senate Judiciary Committee on Wednesday.
"Perhaps they are looking desperately for someone to blame," Robertson told Reuters in an interview.
U.S. crude oil futures hit a record $129.60 a barrel on Tuesday, and have risen sixfold since 2002 as surging demand in China and other developing economies strained supplies
Though gasoline prices this week hit an average $3.79 a gallon and many U.S. politicians seek to blame Big Oil for the plight of U.S. drivers, oil companies are struggling to even turn a profit on producing gasoline, Robertson said.
"The issue is not with refining and retail marketers -- it is really about crude oil prices," Robertson said, pointing out that Chevron broke even on its U.S. domestic refining and marketing operations in the first quarter of 2008.
Low profit margins for gasoline show no signs of abating, Robertson said, pointing to swelling U.S. inventories.
"We ... have not seen any real relief yet in terms of downstream, so we are going to continue to struggle in the U.S.," he said.
That hasn't stopped Democrats in the Senate from pursuing punitive measures like higher taxes on the five companies who will appear at the hearing, which also include Exxon
Mobil Corp , the biggest U.S. oil company, as
well as ConocoPhillips and the U.S. subsidiaries of BP Plc and Royal Dutch
Shell .
Earlier this month, lawmakers unveiled a new energy package that would revoke $17 billion in tax breaks extended to big oil companies and slap a 25 percent windfall profits tax on firms that don't invest in new energy sources.
Specifically, the tax proposal singles out the biggest five U.S. oil companies for higher taxes, which will inevitably cause domestic oil production to decline, Robertson said.
"It seems like the Congress is focused on hobbling American companies in favor of others and that doesn't make any sense," he said.
For example, under the Democratic tax scheme, Valero Energy Corp. -- the biggest U.S. refiner -- would pay lower taxes than oil companies like Exxon and Chevron, he said.
And Norway's Statoil , Chevron's partner in the giant Tahiti field in the deepwater Gulf of Mexico along with France's Total , would pay lower taxes on its share of oil produced there, Robertson said.
The $3.5 billion Tahiti project, delayed due to problems with the moorings securing the facility to the sea floor, is expected to begin production in the middle of 2009, he said.
And the Blind Faith project in the deepwater Gulf of Mexico, also delayed due to mooring problems, is expected to start production in the second half of 2008, he said.
Chevron is the operator of the project and holds a 75 percent interest. Partner Anadarko Petroleum Corp has a 25 percent interest.
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