Tesoro, a refiner and marketer of petroleum products, has reported net loss of $82 million, or $0.60 per share, for the first quarter of 2008, compared to net income of $116 million, or $0.84 per share, for the same period of 2007.
First quarter 2008 segment operating loss was $115 million, versus income of $245 million reported in the same period of 2007.
Declining margins for gasoline and bottom-of-the-barrel products including fuel oil, asphalt and petroleum coke drove West Coast benchmark margins down from $30/barrel (bbl) in the first quarter of 2007 to an average of $14/bbl in the first quarter of 2008. Reported gross refining margins decreased 52% to $6.54/bbl in the first quarter of 2008 compared to $13.50/bbl from the same period of 2007.
Bruce Smith, chairman, president and CEO of Tesoro, said: After our acquisition of the Los Angeles refinery in May of last year, the company announced that it was shifting the focus of its value creation strategy from an external acquisition driven business model to one that pursues internal yield and cost benefits.
This shift was timely as the industry has recently experienced less robust margins. We’ve already developed and initiated changes that are expected to improve profitability in Hawaii and Los Angeles and have accelerated our review of costs and capital commitments across the system in response to the market environment.