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Chevron Downstream Decline

Earnings down on lower margins

SAN RAMON, Calif. -- Chevron Corp. has reported net income of $3.7 billion ($1.75 per share diluted) for third-quarter 2007, compared with $5 billion ($2.29 per share diluted) in the year-ago period.

Results for the 2007 quarter included approximately $400 million (19 cents per share) of net charges associated with nonrecurring items, about the same amount recorded for such items a year ago.

For the first nine months of 2007, net income was $13.8 billion ($6.45 per share diluted), compared with $13.4 billion ($6.06 per share diluted) [image-nocss] in the corresponding 2006 period.

"Earnings declined due mainly to weak refining and marketing conditions in the United States," said Dave O'Reilly, chairman and CEO of the San Ramon, Calif.-based oil company. "Margins were squeezed as escalating costs for crude-oil feedstocks could not be fully recovered in a U.S. marketplace that was well-supplied with gasoline and other refined products."

U.S. upstream income of $1.14 billion in third-quarter 2007 decreased $134 million from the same period last year.

U.S. downstream incurred a loss of $110 million in third-quarter 2007, compared with income of $831 million a year earlier. The decline was mainly the result of weaker margins for refined products and refinery downtime. Results for the 2007 quarter included approximately $50 million of charges primarily associated with environmental remediation costs.

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