|
Alaska’s big refiners show major gains in second quarter Williams revenues grow 20 percent to $2.82 billion, Tesoro doubles its profits, Semco earnings down Allen Baker PNA Contributing Writer
Alaska’s two big refiners had big improvements in their financial performance in the second quarter, mirroring the refining and marketing arms of the major oil companies. Other companies involved in oil-related activities in the state didn’t do so well. Williams gains on refining margins Williams had a big gain in second quarter profits as a result of higher margins and volumes in the refining business, while its energy trading arm continued to contribute. Natural gas production also showed a major increase in earnings, and the sale of convenience stores in the Lower 48 helped the bottom line as well.
Across all the businesses, Williams brought in profits of $339.5 million from continuing operations, up 19 percent from the $286.4 million the company earned same quarter a year ago.
Revenues grew 20 percent to $2.82 billion.
The diverse company’s refining and marketing subsidiary earned $160.2 million in the quarter, compared with $57 million a year earlier.
But that figure was helped by the $72.1 million gain from the sale of 198 convenience stores. Without that, the petroleum services segment still showed a gain of 55 percent.
The company’s North Pole refinery processed an average of 195,800 barrels a day, up from 185,300 daily in the same quarter of 2000. Tesoro doubles profits Tesoro Petroleum doubled its profits to $29.5 million for the second quarter on significantly higher spreads in its refining operations. But a feared summer gasoline shortage didn’t materialize, and executives don’t expect the third quarter to match those numbers.
“Unusually high inventory levels caused July refining margins to fall below the average second quarter 2001 level,” said CEO Bruce A. Smith. “However, recently there have been improvements in the market. If this trend continues ...we expect third-quarter earnings to be in the range of 10 to 25 cents” per share. The per-share figure for the second quarter was 70 cents.
Revenues for the second quarter reached $1.3 billion, up 7 percent.
Tesoro’s refinery spread was $7.74 per barrel in the quarter, up 23 percent from the second quarter of 2000, and refinery throughput was up 3 percent despite a reduction in volume at the Nikiski operation.
The Alaska refinery processed an average of 45,000 barrels a day in the quarter, down from 50,800 barrels in the 2000 quarter.
Tesoro executives expect to close on the purchase of two refineries from BP by the end of the thrid quarter or the beginning of the fourth quarter, and they say the operations are expected to add to earnings immediately. Agrium earnings down Agrium Inc. which operates the Nikiski fertilizer plant, posted earnings of $45 million (Canadian) for the quarter, down from C$51 million a year earlier. The company did show an improvement for the first half of the year.
Since Agrium uses natural gas as feedstock for its nitrogen fertilizer, higher gas prices can be a drag on profits. But Agrium’s fixed-price contract for the Alaska operation and natural gas hedging kept the average gas price to $2.83 per million BTUs, 47 percent of NYMEX prices.
But the company also faced other challenges in the quarter, including poor weather conditions and low grain prices that hurt sales. Semco shows loss for quarter Semco Energy, Michigan-based parent of Enstar, lost $3.3 million in the second quarter, a bit worse than the $3.1 million loss a year earlier.
Seasonal variations, particularly higher use of gas in the winter months, lead to wide swings in Semco’s profits, with the company earning $5.7 million for the first six months, down from $8.9 million a year earlier.
Part of the problem in the second quarter was warmer than usual weather in Southcentral Alaska and Michigan, where the company sells natural gas. Together, those regions were 19 percent warmer than usual, cutting gas sales, Semco said.
Operating income from the gas distribution unit was $4.9 million for the second quarter, down from $5.3 million a year earlier.
Higher gas costs also hurt results.
In addition to selling natural gas, Semco has an engineering and construction business installing pipelines, stores gas, runs pipelines, and distributes propane. Semco also has an information technology subsidiary.
| 