BP Q2 refining/marketing profit up on US margins

24 July 2007 07:54  [Source: ICIS news]

By Jeanne Lim

SINGAPORE (ICIS news)--BP’s refining and marketing business, which includes much of its remaining chemical activities, saw a 47.6% year-on-year rise in second quarter replacement cost profit before interest and tax due to stronger refining margins particularly in the US, it said on Tuesday.

The British major added that it expected to resume operations at its Whiting refinery in the US by end-2007.

Profit for the segment, which rose to $2.7bn (€1.94m) from $1.9bn in the second quarter of 2006, included disposal gains of $1bn primarily related to the sale of the Coryton refinery and the sale of the US West Texas pipeline system to Occidental Petroleum Corp, it said in a statement.

The latter sale, however, was partially offset by an impairment charge of $258m, it added.

The segment’s second quarter results benefited from significantly stronger refining margins, particularly in the US, where marketing margins were also stronger, BP said.

"However, these benefits were more than offset by the impact of operational issues and scheduled turnarounds at a number of our refineries in the US," it added.

Compared with 2006, the second quarter results reflect higher integrity management and refinery turnaround costs as well as lower supply optimisation benefits, partially offset by a positive impact from non-operating items.

BP’s refining throughputs in the second quarter of 2007 were lower; at 2,128m bbl/day compared with 2,289m bbl/day the same quarter last year, mainly due to the outages at its Mid West US refineries and were only partially offset by the benefits of the ongoing recommissioning at its Texas City refinery.

Operational issues at its Whiting refinery have limited the site’s throughput and ability to make low-sulphur gasoline from sour crude oil.

"Repairs are ongoing and we expect to resume sour crude processing in the fourth quarter of 2007 and to restore the refinery to its full flexibility and crude capacity in the first half of 2008," BP said.

Its global chemicals production fell 3.9% year-on-year to 3.4m tonnes in the second quarter.

Meanwhile, lower profits from the segment and other divisions such as exploration and production, and gas, power and renewables affected BP’s overall performance.

At group level, the company’s first quarter replacement cost profit fell 0.5% year-on-year to $6.1bn.

($1=€0.72)

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Author: Jeanne Lim
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