NEW YORK -- The major oil companies continue to climb back from the recession, with higher fuel prices driving up earnings.
After setting record profits in 2008, the oil industry suffered last year as the global economic downturn caused a dramatic drop in oil and natural gas prices. On Thursday, Exxon Mobil said it earned $7.56 billion in the second quarter, its best result since the last three months of 2008. Royal Dutch Shell Group posted a 15 percent gain in net income. A day earlier, ConocoPhillips said net income nearly tripled in the second quarter.
The jump in profits comes as oil companies wait out a ban on deepwater drilling in the Gulf of Mexico that is scheduled to last until Nov. 30. Shell took a $56 million charge for idling its rigs while Exxon halted work on an appraisal well and suspended operations at one of its Gulf platforms.
But their operations are so vast that the effect is likely to be minimal. And both remain committed to drilling in deep water around the globe, including the Gulf. Exxon continues to explore the deep waters off countries like Indonesia and the Philippines.
"Slight delay in the Gulf, but we're proceeding full speed ahead in the rest of the world," Exxon Mobil Vice President David Rosenthal said in a conference call with investors.
Shell said it plans to wait out America's six-month ban on exploratory drilling.
"We are just trying to keep the rigs warm, ready to start up again," Shell Chief Financial Officer Simon Henry said.
For BP, of course, the Gulf is paramount at the moment. It will be paying for years for the oil spill set off in April when the Deepwater Horizon rig exploded and sank. The British oil company took a charge of $32.2 billion to cover the costs that it can reliably estimate at this time. On Tuesday, it reported a record quarterly loss of $17 billion.
Despite its small footprint in the Gulf, Exxon is taking the lead in an industry effort to handle future oil spills and persuade the government to lift the moratorium. Exxon, Shell, Conoco and Chevron plan to build a $1 billion network of emergency responders that can fix offshore oil spills in water as deep as 10,000 feet.
The industry is anticipating changes in how business is done in the Gulf. The moratorium and the chance that Congress may eliminate the current liability cap for oil spills could cause smaller companies to drill elsewhere. That would leave openings for the bigger players.
ConocoPhillips CEO Jim Mulva told investors on Wednesday that he'd love to expand in the Gulf of Mexico, replacing smaller companies that might be scared away by tougher regulations.
"So if smaller companies don't want to continue to participate, and we see the risk-reward and the rules and regulations as OK, we would like to do more in the Gulf of Mexico," Mulva said.
