Occidental Petroleum Corp. (OXY) on Monday said second-quarter earnings surged 55 percent as worries about tight supplies and disruptions in oil-exporting countries drove energy prices to new highs, while new projects helped it set production records.

The company also said its president and global head of energy exploration and production will retire at year's end.

The Los Angeles-based energy and chemicals producer reported net income of $581 million, or $1.48 a share, in the quarter, its largest profit for any quarter. That's up from $374 million, or 98 cents, in the year-ago period.

The most recent results exceeded the average analyst estimate by 10 cents, or 7 percent.

Shares of Occidental slipped 57 cents, or 1.1 percent, at $49.90 Monday on the New York Stock Exchange (search).

Soaring demand and higher prices for oil, natural gas and refined products during the period combined to deliver a record quarter for the industry, analysts said. Even chemicals, long a drag on results, have benefited from global economic recovery.

Occidental's net sales of oil, gas and chemicals surged 21 percent to $2.75 billion during the quarter.

Energy production rose about 6 percent to the equivalent of 574,000 barrels per day, also a record for the company. The biggest gains came from properties in the Texas Permian Basin, the Gulf of Mexico, Ecuador and Oman.

Though oil has fallen back from a record high of $42.45 a barrel on June 2, prices are nearly double historic levels. Benchmark oil prices averaged $38.28 a barrel during the quarter, up 8.6 percent from the first quarter and 23 percent higher than last year's average.

Beyond the usual concerns about slipping output from older fields and rising consumption, energy prices have jumped on worries about attacks on oil facilities in Iraq and Saudi Arabia, unrest in Venezuela and Nigeria, and a strike in Norway.

Despite recent vows by Saudi Arabia and other OPEC members to ramp up production, and evidence of building inventories, prices have stayed high, generating windfall corporate profits.

North American natural gas prices, likewise, have remained stubbornly strong amid worries local supplies are dwindling, even as the number of oil and gas wells near all-time highs.

Gas prices averaged $6.16 per million BTUs in the quarter, up 9 percent from 2003 and up a dizzying 85 percent from 2002.

Occidental said gains from commodity prices and output were partly offset by increased operating costs and higher depreciation, depletion and amortization expenses. Capital expenditures fell 6.4 percent to $461 million.

Still lofty energy prices have produced gushers of cash, letting the company pay off $1 billion in debt-like obligations this year. Slashing debt will help Occidental pursue expansion plans in places like Libya, which has seen relations improve with the United States.

Separately, the company said Dale Laurance, its president and global head of energy exploration and production, will retire on Dec. 31 after 21 years with the company, citing health reasons. Occidental said Chairman and Chief Executive Ray Irani will assume the title of president on Jan. 1, 2005.

John Morgan, responsible for worldwide production and engineering operations, will immediately succeed Laurance as president of Occidental's flagship oil and gas division. Chief Financial Officer Stephen Chazen, promoted to senior executive vice president, now will also oversee the chemicals business.

In the first half, Occidental stock rose 15 percent, outperforming the Standard & Poor's integrated oil companies index, which gained 10 percent.