ConocoPhillips Output Drops, Hurt by Hurricanes

ConocoPhillips, the third-largest U.S. oil company, said Thursday the hurricanes that swept through the Gulf of Mexico in the third quarter hurt operations at its refineries and weighed on its oil output.

AP

The storms curtailed Conoco's output by about 20,000 barrels of oil equivalent per day, putting its quarterly production at flat to slightly below the second quarter level.

A decline in global refining margins versus the second quarter would be partially offset by an increase in marketing margins, the Houston company said.

Hurricanes Gustav and Ike battered the energy sector during the quarter, shuttering 16 refineries that represent 25 percent of the nation's capacity.

Refining margins on the Gulf Coast rose in the quarter, but storm-related shutdowns "significantly limited the company's ability to capture this margin increase," Conoco said in its interim third quarter report.

A drop in U.S. distillate refining margins outstripped an increase in gasoline margins during the quarter, and would hurt Conoco because of its refinery configuration toward production of distillates such as diesel and heating oil.

Shares in Conoco slipped about 1.2 percent to 69.85 in pre-market trading on the New York Stock Exchange.

Conoco said the storms had cost its refining and marketing arm about $200 million after taxes.

Copyright 2008 Reuters. Click for restrictions.