updated 5/14/2008 5:27:47 PM ET 2008-05-14T21:27:47

Despite contributing to massive, multibillion profits in recent quarters, record crude prices are not helping the world's big oil companies on many fronts, including some efforts to find more fossil fuel, the chief of ConocoPhillips said Wednesday.

Jim Mulva, speaking at the company's annual shareholder meeting, said the spike in crude prices to historic highs has raised the tab to do business in the oil field dramatically, both for equipment and personnel.

For example, Mulva said, a barrel of oil that might have cost $20 or $30 a barrel to find, produce and transport in the past may now cost the company $70 or $80 barrel.

What's more, some outfits doing business with the oil giant have renegotiated contracts to their benefit.

"High oil prices have not been our friend," Mulva told the roughly 500 shareholders attending.

Many people might have a hard time sympathizing, given ConocoPhillips' $4.14 billion profit in the first three months of 2008, up 17 percent from a year earlier. The results were driven by triple-digit crude prices, which have climbed higher since then.

But gasoline prices have ascended to record heights too, creating financial stress for many Americans.

Light, sweet crude for June delivery fell $1.02 to $124.78 a barrel Wednesday on the New York Mercantile Exchange, a day after reaching a trading record of $126.98 a barrel.

At the same time, the average national price of a gallon of regular gas rose 2.6 cents Wednesday to a record $3.758 a gallon. Gas prices are 67 cents higher than a year ago and are expected to continue rising at least until the Memorial Day weekend.

Mulva said the biggest factor in gasoline prices was the skyrocketing cost of crude. Speaking to reporters after the meeting, Mulva said his prediction late last year for the price of crude in 2008 was somewhere between $85 and $95 a barrel.

He figured the slowing economy would take a toll on demand but acknowledged — like others — that market speculation, geopolitical turmoil and other factors have pushed prices higher.

"I'm frankly surprised oil is $125 a barrel," he said.

Higher crude costs also have squeezed profits at the refining arms of companies like ConocoPhillips, which don't produce enough crude themselves to satisfy their refining operations and have to buy supplies at market prices.

As such, refining margins have been crimped. Those margins reflect the difference between the cost of crude and what the company makes on refined products such as gasoline.

ConocoPhillips is the third-largest U.S. oil company behind Exxon Mobil Corp. and Chevron Corp., respectively. Its shares rose 80 cents to $89.42 in afternoon trading. They've traded in a range of $67.85 to $90.84 in the past year.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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