Phillips 66 quarterly profit up on good margins
By Kristen Hays and Anna Driver
HOUSTON (Reuters) - Increased access to cheaper crude oil from the United States and Canada boosted Phillips 66's (PSX.N: Quote) quarterly profits above analyst expectations after the U.S. refining company spun off from ConocoPhillips (COP.N: Quote) earlier this year, the company reported on Wednesday.
More than half of the company's refining capacity is in the central corridor of the U.S. with access to those cheaper crudes in North Dakota, Texas, Kansas and other states, executives told analysts during Phillips 66's third-quarter earnings conference call.
"Our U.S. advantaged crudes increased from 52 percent last year to 61 percent to date in 2012," Chief Financial Officer Greg Maxwell said.
Shares rose 1.4 percent in early trading on the New York Stock Exchange, but later fell less than 1 percent to 47.14.
Those advantages stem from efforts to beef up logistics, such as pipeline and rail connections, to gain access new crude sources, said Tim Taylor, executive vice president of commercial, marketing, transportation and business development.
He said the company was delivering up to 40,000 barrels per day of cheap crude from North Dakota's Bakken shale play by rail to Phillips 66's 238,000 barrels-per-day (bpd) Bayway refinery in Linden, New Jersey, double the amount shipped in the second quarter.
Power was restored at the Bayway plant on Wednesday after it sustained damage and flooding from Hurricane Sandy, but executives had no estimate on when it would restart.
"The water is receding, we've gotten power back this morning and starting to restore that to the various units. But we're still making assessments and we really haven't determined when we can start back up," Taylor told Reuters in an interview. Continued...