26 July 2011 08:37 [Source: ICIS news]
SINGAPORE (ICIS)--UK-based oil giant BP reported on Tuesday a 55.1% year-on-year drop in replacement cost profit before interest and tax at its refining and marketing division to $1.34bn (€938m) in the second quarter of 2011 because of higher non-operating charges.
The segment’s profit before interest and tax slipped by 1.62% year on year to $1.82bn in the second quarter of this year, BP said in a statement.
“The 2011 results included net non-operating charges of $218m for the second quarter and $235m for the half year, mainly comprising impairment charges, primarily associated with our US divestment programme, partly offset by gains on disposal,” the statement said.
Compared with a year earlier, the second-quarter result reflected an improved refining environment, which was more than offset by the swing to a slight loss in supply and trading, reduced utilisation at the Texas City refinery, higher turnaround activities and certain one-off charges, it said.
In the second quarter, refining throughputs in the firm’s fuels value chains were reduced by over 170m bbl/day compared with the same period last year mainly due to operational issues following the recent power outage at the Texas City refinery, the company said.
Meanwhile, overall petrochemicals production volumes were lower in the second quarter by about 8% compared with the same period last year, driven primarily by shutdowns following the power outage at the Texas City petrochemicals site, a tornado strike at the Decatur plant and a scheduled turnaround at the Cooper River plant, the company said.
For the first half of 2011, BP’s replacement cost profit before interest and tax rose by 21.9% year on year to $3.42bn, while its profit before interest and tax surged by 90% to $6.19bn.
Looking ahead, the company said it expects a “typical seasonal decline” in refining margins in the third quarter of 2011.
“Throughput at the Texas City refinery has been largely restored and we expect the last of the impacted units to return to full capacity during August,” it said.
“We expect petrochemicals production volumes to improve compared with the second quarter following the recent full recovery of operations at our Decatur, Texas City and Cooper River petrochemicals sites,” the company added.
Meanwhile, BP's overall second quarter replacement cost profit was $5.31bn, compared with a loss of $17bn a year ago. For the half year, replacement cost profit was $10.8bn, compared with a loss of $11.4bn a year ago.
The company takes into account inventory holding gains or losses, as well as taxes, in the computation of replacement cost profit.
In the second quarter, BP booked $311m in inventory holding losses, which were deducted from the net profit of $5.62bn.
($1 = €0.70)
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