Profits Up at Calumet, S-Oil


Independent refiner Calumet Specialty Products Partners LP said it increased profits during the second quarter, while South Korean refiner S-Oil reported an upswing in profits for its lubricants segment during the first half of 2007.

Calumet reported net income of $37.4 million for the quarter ending June 30, up 59 percent from $23.5 million in the same period in 2006. Sales revenue for the quarter declined 2 percent to $421.7 million.

The Indianapolis-based company said the partnerships performance for the second quarter was positively impactedby improvements in both specialty and fuel products margins per barrel, partially offset by decreased sales volume of specialty products. The decrease in sales volume compared to the same period in the prior year was primarily due to unscheduled downtime on certain operating units at our Shreveport refinery during the quarter, said Bill Grube, Calumet president and chief executive officer.

Calumet produced slightly less specialty products – base oils, waxes, solvents and asphalt – in the second quarter compared to the year-earlier period. Specialty products production volume declined 10 percent to 26,571 barrels per day from 29,521 b/d a year earlier. Specialty products sales volume fell 8 percent to 24,692 b/d for the quarter ending June 30. Base oil output fell 5 percent to 11,495 b/d, compared the year-ago period.

Grube said progress continues on the Shreveport refinery capacity expansion project, which Calumet expects to have substantially completed in the third quarter, with production ramping up during the fourth quarter of 2007. The company expects the project, with an estimated total cost of $200 million, to increase the refinerys capacity by about 40 percent over current levels, from 42,000 b/d to 57,000 b/d. We have spent a total of $155 million in capital expenditures related to the project as of June 30, 2007, Grube said.

Earlier this year, Calumet said the expansion project would add 6,000 b/d of Group II base oil production plus 1,000 b/d of new wax volume.

According to an Aug. 2 investor relations presentation on S-Oils first half 2007 performance, its lubricants business segment posted operating income of 163 billion South Korean won (U.S. $176.4 million) for the first half, up 20 percent from 136 billion during the first half of 2006. For the second quarter, lubricant operating income reached 78 billion won.

Overall, Seoul-based S-Oil reported operating income of 709 billion won for 2007s first half, up more than 40 percent from 505 billion won during the year-ago first half.

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