RICHMOND -- Chevron has resumed operations at a vital crude oil unit at its Richmond refinery that had been knocked out by a fire, making the disclosure the same day the company posted $6.18 billion in first-quarter profit.
The energy giant has begun feeding petroleum through a crude oil unit crippled by a fire Aug. 6, 2012. It disclosed the restart of the unit during a conference call Friday to discuss the quarterly results with analysts.
"Richmond crude unit is just now taking oil feed," Patricia Yarrington, Chevron's chief financial officer, said Friday. "As we progress through the quarter, you should expect that to be back to full operation."
Full operations at the 244,000-barrel-a-day capacity Richmond refinery could resume within days or weeks.
San Ramon-based Chevron on Friday reported that its profit and revenue declined, due primarily to a slump in oil prices. But the now-completed repairs at the Richmond refinery and downtime for planned repairs at Chevron refineries in Mississippi and the Southern California city of El Segundo contributed to the lower profit and revenue in the January-March quarter.
"U.S. refining should be better in the second quarter than in the first quarter," said Brian Youngberg, an analyst with investment firm Edward Jones.
The $6.18 billion, or $3.27 a share, in earnings that Chevron posted topped Wall Street's expectations. Analysts had predicted a per-share profit of $3.05.
Chevron's revenue of $56.8 billion, however, fell short of Wall Street's expectations.
Buoyed by the profit results, shares of Chevron jumped 1.3 percent Friday and closed at $120.04. Compared with the year-ago first quarter, profit fell 4.5 percent and revenue declined 7.8 percent.
"Our consistent financial performance has enabled us to significantly increase the dividend again, and fund major development projects that are the foundation of the company's future growth in production, earnings and cash flows," CEO John Watson said in a release.
Chevron pointed to ongoing progress in exploration, development and production of crude oil and natural gas. That includes construction on the Gorgon and Wheatstone liquefied natural gas projects in Australia, development of key deep-water projects in the Gulf of Mexico on track to start up in 2014, and exploration efforts in Morocco and China. And Chevron recently approved plans for the largest oil and natural gas development project ever in the Congo.
"The outlook is very strong for Chevron earnings growth," Youngberg said. "Starting in 2014 and for the rest of the decade, things look very good."
Since the fire, the Richmond refinery had been operating at about 60 percent capacity until very recently. The factory wasn't processing crude oil and instead was being used to blend gasoline.
Gasoline prices fell in California and in every part of the Bay Area on Friday compared with Thursday, according to the GasBuddy website. The shutdown of crude oil processing at the Richmond refinery had caused gas prices to spike in the days and weeks after the August fire.
"It's a pretty decent environment for refinery operators to make good profits in the United States," said Tom Kloza, chief oil analyst with GasBuddy. "It will be good for Chevron to get back to full operations and take advantage of this good climate for refining."
Contact George Avalos at 408-373-3556 or 925-977-8477.
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