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HOUSTON -- On the heels of placing fifth on the Fortune 500 list, ConocoPhillips released its first-quarter net income results yesterday -- $4.139 billion. In comparison, last year's same quarter results were $3.546 billion. Revenue also rose from $ 41.3 billion to $54.9 billion.
"Although we delivered solid financial results during the first quarter, unplanned downtime negatively impacted our performance," Jim Mulva, chairman and chief executive officer, said in a released statement. "Our upstream business produced 2.25 million barrels of oil equivalent per day, including our estimated share of Lukoil's production, and we benefited from higher commodity prices. In the downstream business, our worldwide refining crude oil capacity utilization rate was 89 percent and we were impacted by significantly lower realized margins."
The report stated that Exploration and Production (E&P) first-quarter net income was $2.887 billion, up from $2.608 billion in the previous quarter and $2.329 billion in the first quarter of 2007. The increase was primarily due to higher commodity prices, in part set off by higher taxes, lower volumes and a reduced net benefit from asset rationalization efforts, as well as rising operating costs.
Daily production from the E&P segment, including Canadian Syncrude and excluding the Lukoil investment segment, averaged 1.79 million barrels of oil equivalent (BOE) per day, a decrease from 1.84 million BOE per day in the previous quarter and 2.02 million BOE per day in the first quarter of 2007, the company stated.
Decreases in production rates are attributed, in part, to the expropriation of the company's Venezuelan oil projects and ConocoPhillips' exit from Dubai.
The realized decrease in net income from the first quarter of 2007 was primarily due to lower U.S. refining market margins and lower volumes, according to the company. Refining volumes decreased due to unplanned downtime at the company's U.S. Gulf Coast refineries and the ownership interest change in Borger, Texas, refinery while international marketing sales declined as a result of 2007 asset dispositions.
ConocoPhillips' Lukoil investment had first-quarter net income of $710 million, up from $649 million in the previous quarter and $256 million in the first quarter of 2007, the company stated. For the first quarter of 2008, the company's estimated its equity share of Lukoil production was 459,000 BOE per day and its share of Lukoil daily refining crude oil throughput was 222,000 barrels per day.
Looking toward the future, Mulva noted: "We expect to achieve our strategic objectives for 2008, and we are focused on continuous improvement in all of our operations. We will continue to supply crude oil, natural gas and refined product volumes to meet the world's energy needs through the disciplined development and efficient operation of our portfolio of high-quality assets."