Chevron Paid O'Reilly $31.6 Million in 2006 as Profit Soared

Chevron Corp., the second-largest U.S. oil company, paid Chief Executive Officer David O'Reilly $31.6 million last year after record oil prices boosted the company's annual profit to an all-time high.

O'Reilly's salary rose 4.5 percent to $1.62 million from $1.55 million in 2005, the San Ramon, California-based company said today in a U.S. Securities and Exchange Commission filing. His bonus was unchanged at $3.5 million.

The 60-year-old chief executive also received $13 million in stock awards and stock options valued at $6.92 million, both representing shares earned over a four-year period. The fair value of O'Reilly's 2006 stock awards was $3.03 million, and stock options granted last year were valued at $5.1 million.

A change the value of O'Reilly's retirement plan represented another $6.32 million, while other compensation, including the use of the company's aircraft and financial counseling, totaled $228,617.

The company's shares had their best performance in three years, rising 30 percent. O'Reilly plans to spend $20 billion this year to expand the search for new oil and gas fields in the Gulf of Mexico, Australia, Azerbaijan and the Canadian Arctic.

The company's output probably will fall 2.5 percent this year, O'Reilly said during a Feb. 2 conference call, after Venezuela unilaterally slashed Chevron's stake in two oil fields and a labor dispute delayed a $5.6 billion project in Kazakhstan.

Unocal Wells

Among the world's five largest oil companies, Chevron had the biggest profit gain last year at 22 percent, followed by Exxon Mobil Corp.'s 9.4 percent increase. Annual net income declined for Hague-based Royal Dutch Shell Plc, BP Plc of London and France's Total SA.

Chevron had the benefit of a full-year of production from wells acquired in the company's $17.8 billion purchase of Unocal Corp. in August 2005. The company spent almost $70 billion on acquisitions since O'Reilly became CEO in 2000, including the $45.8 billion purchase of Texaco Inc. in 2001.

A shortage of offshore drilling rigs forced the company to halt work in September in the $3 billion Jack prospect in the Gulf of Mexico. Costs for drilling wells and expanding refineries jumped 50 percent last year to $16.6 billion.

The company plans to sell $1 billion to $3 billion in assets this year as it increases the pace of shedding old oil and gas fields, O'Reilly said during the Feb. 2 conference call.

source:www.bloomberg.com