US Valero Q2 net income rises 27.6% to $744m on margins, volumes

26 July 2011 14:13  [Source: ICIS news]

HOUSTON (ICIS)--Valero’s second-quarter net income rose 27.6% year on year to $744m (€521m), driven by improved margins and higher volumes, the US-based refiner said on Tuesday.

Valero’s operating revenues for the three months ending on 30 June rose 52% year on year to $31.3bn, from $20.6bn in the 2010 second quarter. Second-quarter operating income was up 44% year on year to $1.3bn.

Valero’s throughput margin rose $1.84/bbl, primarily due to higher margins for gasoline, diesel and jet fuel, as well as wider discounts for heavy-sour feedstocks on the US Gulf coast and light-sweet crude oil in the mid-continent, the company said.

Volumes rose by 136,000 bbl/day, mainly due to Valero operating its Aruba refinery, which was not in operation during the second quarter of 2010, the company said.

"In the second quarter, refining industry margins and feedstock discounts in our markets expanded from the strong first-quarter levels as global refined product demand continued to grow,” CEO Bill Klesse said.

“To take advantage of this demand growth, we increased refining throughput volumes to our highest utilisation rate in three years – despite the impact of an apparent lightning strike to a critical motor at our Port Arthur refinery in early June,” he added.

Klesse also said that Valero’s McKee, Ardmore, and Three Rivers refineries continued to benefit from processing West Texas Intermediate (WTI)-type and Eagle Ford crude oils, which have been pricing at a significant discount to light-sweet crude oils such as Brent.

“We continued to increase our processing of discounted Eagle Ford crude oil at our Three Rivers refinery, and we plan to process additional volume there and at our Corpus Christi refinery in the third quarter,” he said.

Klesse added that Valero expects to close its planned acquisition of Chevron’s Pembroke refinery in Wales on 1 August.

($1 = €0.70)

For more on Valero and other producers visit ICIS company intelligence

By: Stefan Baumgarten
+1 713 525 2653

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