Inside the Integrateds: Drilling Down on Crude Oil

NEW YORK (TheStreet) -- Integrated oil company earnings are well under way this week, with numbers from the likes of BP(BP), ConocoPhillips(NWSA), Hess(HES), Royal Dutch Shell(RDS.A) and Exxon Mobil(XOM) already in the books. Chevron's(CVX) third-quarter report comes on Friday.

And already, a familiar pattern has emerged: some bettering production output from companies experiencing year-over profit declines, hampered by dour refining margins and down commodity prices compared to last year. Still, major integrated oil operations are Rube Goldberg-esque in their complexity, with everything from geopolitical events to foreign exchanges to commodity prices to technology affecting top and bottom lines.

Given that, we've convened a roundtable of sorts -- a series of excerpts from conversations throughout the week with analysts and experts who follow the integrated sector. While profit figures may garner the headlines, each has their own take on the important items worth keying on during the earnings season.

With cost reductions all the rage, Phil Weiss, a senior analyst at Argus Research, for one, discussed the importance of examining the type of reductions the integrated operations are showing:

"It's not just about taking costs out. In the second quarter, when Conoco talked about all the costs it was taking out, a lot of it wasn't sustainable. It was foreign exchange and energy cost reductions, and those are not controllable," Weiss says. "So if you tell me you reduce cost by $1 billion, but $800 million of it is not sustainable, that doesn't mean as much to me if you don't take out more sustainable costs."

Sven Del Pozzo, senior research analyst at C.K. Cooper, like many, expected upstream operations to look infinitely better than downstream numbers. But he also notes that petrochemical numbers, among other things, may deserve special attention.