EPP posts record profit as others fall

Pipeline operator nets $1.4 billion in Q1; Valero, KBR see red

Houston pipeline and export terminal operator Enterprise Products Partners posted the largest profit in the company’s 52history as record-low oil prices have resulted in multibillion dollar losses for most companies in the energy industry.

Enterprise had net income of $1.4 billion in the first quarter compared with $1.3 billion during the same period in 2019. Revenue, however, fell by nearly 12 percent to $7.5 billion from $8.5 billion in the same period a year earlier.

The company has not posted a loss since the third quarter of 2003, when a $22.5 million reduction in the value of equipment resulted in a $3.3 million loss.

Enterprise’s record profit comes at a time of extreme volatility in the oil and gas industry. A price war between Russia and Saudi Arabia exacerbated a global oil glut while the ongoing coronavirus pandemic slashed demand to the point that storage tanks are filling up. The combination sent West Texas Intermediate, the U.S.

benchmark for crude below zero last week.

Like others in the industry, Enterprise cut its capital spending for 2020, shaving $1.1 billion, but converted tanks used to store ethane, propane, butane and other products to store crude oil, earning a premium on fees while allowing customers to wait for higher prices.

“Our storage is worth its weight in gold,” co-CEO Jim Teague said. oil,

Valero tumbles to loss

Also Wednesday, San Antonio refiner Valero said it swung to a loss in the first quarter as revenues fell amid plunging demand and prices for petroleum products.

Valero said it lost $1.9 billion in the first three months of the year, compared to a profit of $141 million during the same period in 2019. Revenues fell 9 percent to $22.1 billion from $24.3 billion in the first quarter of 2019.

The coronavirus pandemic has battered refiners as social distancing measures keep people at home. The Energy Department reported last week that gasoline demand has plummeted by more than 30 percent from a year ago. Gasoline prices have fallen for nine consecutive weeks and more than $1 gallon over the year to a national average of $1.74, the fuel-price tracking website GasBuddy reported Monday.

Valero reported losses across its refining and biofuel operations. It said it would cut capital spending this year by $400 million to $2.1 billion. The company said it paid out $548 million to shareholders through dividends and stock buybacks.

KBR’s profits run ends

Houston information technology and construction company KBR posted its first loss in more than three years after writing down the value of its oil and gas assets.

The company lost $104 million in the first quarter, a year after it made $40 million in the same quarter of 2019. First-quarter revenue rose 15 percent to $1.5 billion from $1.3 billion the previous year.

KBR makes most of its revenue from military and government contracts, but it also designs and builds refineries, liquefied natural gas plants and other similar facilities. The company reduced the value of its oil and natural gas assets by $178 million because of the energy market downturn.

The last time KBR reported a loss was the fourth quarter of 2016.