ConocoPhillips has reported an impressive $5.4 billion second quarter net income, which translates to a net income of $3.50 per share. In response to his company's booming second quarter results, ConocoPhillips chief Jim Mulva issued a few comments to summarize the numbers and shed some light on the firm's short-term future.
“We recently signed an interim agreement with Abu Dhabi National Oil Company (ADNOC) to develop the Shah gas field in Abu Dhabi," said Mulva. "The project will include the construction of a new 1 billion-cubic-feet-per-day natural gas processing plant at Shah, new natural gas and liquid pipelines, and sulfur-exporting facilities at Ruwais, United Arab Emirates.
“Elsewhere in the region, we approved the continued funding for the development of the Yanbu Export Refinery Project. Together with the Saudi Arabian Oil Company (Saudi Aramco), we expect to construct a grassroots, 400,000 BPD, full-conversion refinery in Yanbu Industrial City in The Kingdom of Saudi Arabia.
“We are pleased to be working with both ADNOC and Saudi Aramco on world-class projects that will help meet the growing demand for energy around the globe.
“ConocoPhillips also recently signed a Memorandum of Understanding with Petrobras, the leading Brazilian energy company. Through this agreement, we hope to identify opportunities to work together in oil and gas exploration, production, refining, marketing and transportation projects, as well as sugar-based ethanol production, transportation and marketing projects based on mutual interest and economic feasibility.
“In North America, through our joint ventures with TransCanada, we plan to expand the Keystone crude oil pipeline system and provide additional capacity of 500,000 BPD from Western Canada to the U.S. Gulf Coast. When completed in 2012, this expansion will increase the capacity of the Keystone pipeline system to approximately 1.1 million BPD.
“Looking ahead to the third quarter, we anticipate the company’s E&P segment production will be similar to the second quarter. We expect full-year 2008 production will be consistent with our operating plan. We anticipate exploration expenses to be approximately $375 million for the quarter.
“In our downstream refining business, we expect continued negative impacts on market capture due to secondary product margins. We anticipate our U.S. crude oil capacity utilization will be similar to the second quarter. In international refining, utilization at our Wilhelmshaven refinery will continue to be impacted by hydro-skimming margins. Turnaround costs are expected to be approximately $100 million before-tax for the third quarter.
“Lastly, we anticipate share repurchases will be between $2 billion and $3 billion for the third quarter, which is in line with our $10 billion authorized share repurchase program for 2008.”
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