Marathon net up on refining

Allen Baker

Refining and marketing operations powered USX-Marathon Group to a net income of $193 million for the third quarter, up 60 percent from the 2000 quarter. But the company showed a profit decline before special items were factored in.

Revenue dropped 10 percent to $8.34 billion, from $9.2 billion a year earlier and in the second quarter.

Special items had a big impact on reported profits in both the 2001 and 2000 quarters. This year, the company took a charge of $126 million on the sale of heavy oil assets in Canada as part of its realignment strategy there.

In the 2000 quarter, the big item was a deferred tax charge of $235 million. Before those adjustments, profits were $319 million in the 2001 quarter, down 10 percent from $356 million. Second quarter profits were $478 million.

“Our downstream refining and marketing segment continued to perform very well this quarter and upstream production levels surpassed our third-quarter production targets,” said USX Corp. Chairman Thomas J. Usher.

Still, upstream income dropped by nearly a third in the U.S., to $210 million from $305 million a year earlier as prices plunged. International upstream operations chipped in $49 million, not even a third of the $160 million booked a year ago. Liquids production rose to 200,200 barrels a day, from 198,500 a year earlier. Natural gas production was up a bit also, to 1,172 million cubic feet daily, from 1,167 million cubic feet in the 2000 quarter.

Refinery throughput rose 4 percent to 961,100 barrels daily from 928,400 a year earlier as the refining, marketing an transportation segment showed a profit of $575 million in the quarter, up from $299 million a year earlier.

That 92 percent increase was a result of higher refining and wholesale margins, the company said. But the results were a far cry from the downstream profits of $842 million in the second quarter of this year.