The refinery has a book value of about US$1.3bn, but El Paso expects to receive "significantly" less than that, which means the company will record a charge some time in 2003, Scott said. Aruba is currently producing at about 200,000b/d, and produced an average of 169,000b/d during the first quarter - about 50% below capacity, Scott said.
El Paso did not invest significant working capital to increase production at Aruba during the first quarter because international oil prices were high as a result of the strike in Venezuela and war in Iraq, Scott said. "We still expect to have positive margins at Aruba going forward," Scott said.
Aruba is part of El Paso's Merchant Energy Group. El Paso reported a net loss of US$394mn, or US$0.66 per share, for the first quarter of 2003, compared with earnings of US$383mn, or US$0.72 per diluted share, in the first quarter of 2002.
El Paso will also divest its US Telecom business and expects asset sales and cost-cutting measures to reduce debt and other obligations by approximately US$7.5bn to US$17.5bn by mid-2005.
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