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Madrid: Repsol YPF, Spain's largest oil company, said profit rose 56 per cent in the fourth quarter as higher oil prices and wider refining margins countered a production slump.
Net income grew to 740 million euros ($1.12 billion) from 473 million euros a year earlier, Madrid-based Repsol said yesterday in a regulatory filing. Profit adjusted to include inventories climbed 19 per cent to 650 million euros, missing the 663 million-euro median estimate of 11 analysts surveyed by Bloomberg News.
Oil traded in New York averaged $88.59 a barrel in the fourth quarter, up from $60.59 a year earlier. That helped make up for a decline in Repsol's oil and natural-gas output, which shrank for the 10th consecutive quarter after the company lost reserves in South America.
"The high price of oil is really helping Repsol turn things around after a couple of years where profit was pretty weak," said Jose Lizan, who helps manage 600 million euros at Nordkapp Inversiones SV in Madrid.
Refining unit
The company's refining unit earned more from converting crude oil into fuels including gasoline. Refining margins widened to $6.30 a barrel from $5.69 a barrel a year earlier. Chairman Antonio Brufau plans to fit Repsol's Spanish refineries with equipment to process lower grades of crude, increasing margins further.
Bolstering production and refining capacity is the thrust of the company's 28 billion-euro investment plan through 2009. Repsol has sold a stake in its Argentine unit YPF, raising funds to explore in the US and North Africa. Brufau will present an updated growth plan through 2012 this week.
Earlier this month, Repsol closed the sale of 15 per cent of YPF to local investor Enrique Eskenazi for $2.2 billion. Before the end of the first half, a further 20 per cent stake is slated to be sold on the stock exchange. The Spanish explorer and refiner bought YPF from Argentina's government in 1999.
Repsol sold five per cent of Cia Logistica de Hidrocarburos SA to Deutsche Bank AG in the fourth quarter for 176.5 million euros. The company also divested its gasoline stations in Chile for $210 million.
New finds
In December, Repsol found gas in Bolivia and joined a project to search for the fuel in Angola. This year, the company has discovered oil in the Peruvian jungle and won licences to explore off Alaska, Mexico and Spain.
Oil and gas production fell to 982,000 barrels of oil equivalent a day from 1.101 million barrels a day a year earlier, after the Bolivian government took control of a majority stake in the nation's reserves and output in Argentina dwindled.
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