Oil Industry Defends Big Profits

“Consumers are not going to cheer oil industry profits when gasoline prices are high, everybody knows that,” Bob Tippee, editor of Houston-based Oil and Gas Journal, said. “But in fact, those profits will go into the development of future supply that consumers need.”

While some of the money earned by oil companies is paid to shareholders through dividends, much of it is reinvested into exploration, acquisition and production. At its annual meeting here in Houston Wednesday, the directors of the Chevron corporation announced a 15.5-percent increase in the dividend, but also outlined plans for increased spending in development. Company executives say production can be expected to increase by three percent a year over the next five years as a result of new discoveries and ongoing development projects.

Voice of America