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Chevron Corporation has reported net income of $5.17 billion ($2.48 per diluted share) for the first quarter 2008, compared with $4.72 billion ($2.18 per diluted share) in the 2007 first quarter. Earnings in the 2007 period included a $700 million gain on downstream asset sales in Europe.

Sales and other operating revenues in the first quarter 2008 were $65 billion, up from $46 billion a year earlier on higher prices for crude oil, natural gas and refined products.

“Upstream earnings benefited from a significant increase in the price of crude oil from a year ago,” said Chairman and CEO Dave O’Reilly [pictured]. “However, market conditions prevented our downstream business from fully recovering these higher costs through the price of gasoline and other refined products. Downstream results in the United States were essentially break-even in this year’s first quarter.”

U.S. downstream earnings of $4 million decreased $346 million from the 2007 quarter, mainly due to lower margins on the sale of refined products. The margin decline was associated with a sharp increase in the price of crude oil that could not be fully recovered in the sales price of gasoline and other refined products.

Refinery crude-input of 894,000 barrels per day was up 165,000 from the first quarter 2007. The improvement was primarily at the refinery in Richmond, California, which incurred planned and unplanned downtime last year. Input volumes were lower in the 2008 quarter at the refinery in Pascagoula, Mississippi, where a crude unit restarted in February of this year after an extended unplanned outage that began in August of last year.

Refined-product sales volumes were 1.43 million barrels per day in the first quarter 2008, down 1 percent from the year-ago period, primarily due to reduced demand for gasoline and availability of fuel oil. Branded gasoline sales volumes were down 3 percent between quarters to 601,000 barrels per day.

International downstream income of $248 million in the first quarter of 2008 was down more than $1 billion from the year-ago quarter. The 2007 quarter included a $700 million gain on the sale of assets in the Netherlands. Margins on the sale of refined products were lower in most areas, due mainly to an increase in crude-oil feedstock costs. Foreign currency effects benefited earnings by $111 million in the 2008 period, compared with $5 million in the 2007 first quarter.

Total refined-product sales volumes of 2.05 million barrels per day were 1 percent lower than last year’s first quarter. Excluding the impact of the 2007 asset sales in Europe, sales volumes were up 5 percent between quarters on increased trading activity.

Refinery crude-input of 967,000 barrels per day was 10 percent lower than the first quarter of 2007, primarily due to the sale of the company’s interest in the 400,000 barrel-per-day Nerefco Refinery in the Netherlands.