Crude and costly

31 January 2013 By Christopher Swann

ConocoPhillips and Occidental both reported 2012 core profit down more than 15 pct from 2011. That’s despite a record price for Brent crude of $112 a barrel during the year. High production costs are a worry for investors and suggest the floor under oil prices is rising.

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ConocoPhillips, America’s largest oil and gas exploration and production company, said on Jan. 31 that adjusted earnings for 2012 fell to $6.7 billion from $8 billion in 2011.
The figure excludes the contribution from the company’s refinery and chemical operations, which were spun off on April 30 last year to become Phillips 66, and other one-off items.
Occidental Petroleum, the second largest independent producer, said on Jan. 31 that core earnings from its oil and gas operations, which exclude certain charges, fell to $8.8 billion in 2012 from $10.3 billion in 2011.
The average price of Brent crude in 2012 was a record $112 per barrel, topping the $111 average price in 2011. In 2008, when Brent hit a peak daily price of $147, the average price through the year was just $72.
ConocoPhillips said its overall realized crude oil price in 2012 increased to $105.72 per barrel from $105.52 in 2011. Occidental’s realized price for crude was $99.87 per barrel in 2012, compared with $97.92 in 2011.

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