ConocoPhillips Brings Quarterly Net Income of $5.19 Billion Despite Reduced Production

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Researched by Industrial Info Resources (Sugar Land, Texas)--On October 22, ConocoPhillips (NYSE:COP) (Houston, Texas) announced its earnings for the third quarter of 2008. The company reported a net income of $5.19 billion, compared with $3.67 billion for the third quarter of 2007. ConocoPhillips' largest business segment, the Exploration & Production segment, showed a 53% rise from last year's third quarter. The segment had a net income of $3.93 billion this quarter, compared with $2.08 billion in 3Q07. This was slightly down from the revenues of 2Q08, which brought a net income of just less than $4 billion. In a conference call regarding the earnings, CEO Jim Mulva, pointed to recent decreases in the price of crude oil and natural gas for this lowered income.

Despite a decrease in production volume estimated at $128 million, the company's Refining & Marketing segment showed an increase of $185 million from last quarter. The decrease in production volume was primarily because of Hurricanes Gustav and Ike, which caused downtime at some of ConocoPhillips' refineries. Because of the loss of production caused by the hurricanes in the third quarter, Mulva said that the company anticipates higher production volumes for 4Q08.

One of ConocoPhillips largest projects in the U.S. involves the upgrades, additions and expansions of its Wood River refinery and terminal in Roxana, Illinois, which ConocoPhillips jointly owns with the Encana Corporation. Industrial Info is currently monitoring 19 different expansions, upgrades and restarts at the facility with a combined estimated total investment value of $1.4 billion. Individual projects of the entire facility upgrade include the addition of a 65,000-barrel-per-day delayed coker unit, as well as a $50 million coke handling system to support the unit. Other aspects of the project include petroleum and ethanol tank additions, wet gas scrubber additions and upgrades to various units of the refinery.

In a press release regarding the earnings, ConocoPhillips noted that the company had recently received a key permit involving the expansion project. "Upon completion," stated the report, "the expansion project will supply an additional 3.2 million gallons per day of clean gasoline and diesel in the region. In addition, the project provides significant environmental benefits, including a 95% reduction in sulfur dioxide emissions and a 25% reduction in nitrogen oxide emissions."

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