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Hess Earnings Down 1.6 Percent After Maintenance

July 27, 2007 — Scheduled maintenance at the St. Croix-based Hovensa oil refinery has affected the bottom line of its parent company, Hess Corp.
The New York-based energy company said its second quarter net income fell 1.6 percent, partially because of the $24 million cost of a 30-day shutdown of part of its local Hovensa refinery, according to Market Watch, a company that offers investment tools and analysis.
Hovensa officials reported in May the company would shut down several processing units for cleaning, inspection and repairs, a process known as a block turnaround and scheduled to last 35 days.
Hess reported profits of $557 million, or $1.75 a share, down from $566 million, or $1.79 a share, a year ago. Revenue climbed 7 percent to $7.4 billion from $6.92 billion a year ago. Analysts polled by Thomson Financial expected the company to earn $1.46 a share, on average, according to published national reports.
Hovensa is a big contributor to the V.I. government. In 2006, the refinery generated approximately $161 million in V.I. tax revenues, which includes $14 million in real property taxes and $102 million in corporate income taxes by refinery owners and contractors, according to Larry Kupfer, Hovensa’s president and chief operating officer.
Hovensa continues to improve and upgrade the refinery's facilities. Several capital improvements are ongoing, including a new laboratory at $12 million, a low-sulfur gasoline unit at $195 million, a gas-turbine power generator at $83 million and Phase II of a wastewater treating unit at $93 million, according to Kupfer.
Hovensa is the 11th-largest refinery in the world, the fourth largest in the western hemisphere and the third largest in the U.S. It has a capacity of 500,000 barrels per day, while the largest mainland refinery has a 563,000-barrels-per-day capacity.
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