"We have had a tremendous response from our employees," said ConocoPhillips Chairman and CEO James J. Mulva. "Our employees are working hard to assist their co-workers while bringing our facilities back online to help meet our country's energy needs. Our top priority remains the safety and welfare of our employees in the impacted area as we continue our efforts to contact them."
“ConocoPhillips does not tolerate price gouging and has exhibited strong restraint on pricing in the aftermath of both Hurricane Rita and Hurricane Katrina”
Production
In the Gulf of Mexico, assessment teams have returned to the four fields that ConocoPhillips operates offshore. The company's largest offshore asset in the Gulf of Mexico, Magnolia, has minimal damage and production is expected to resume shortly, contingent on resumption of operations at related onshore infrastructure such as pipelines and utilities. Initial assessments at three smaller fields have identified damage, but the production impact is not expected to be significant.
Physical inspections at onshore fields in the path of the storm indicate little or no damage. Operations are expected to resume once water and power are restored. Operations at our South Texas gas fields not in the path of the storm were curtailed as gas processing facilities to receive the gas were shut down. These fields are restarting as the gas processing facilities reopen.
Refining
Last week, in preparation for Hurricane Rita, ConocoPhillips conducted safe, orderly shutdowns of its 229,000 barrel-per-day Sweeny refinery in Old Ocean, Texas, and the company's 239,000 barrel-per-day Lake Charles refinery in Westlake, La.
The Sweeny refinery did not sustain any damage due to Hurricane Rita. Personnel at Sweeny began the process of safely restarting units over the weekend and expect to return to normal operations later this week.
ConocoPhillips teams are on site at the Lake Charles refinery and area terminals, conducting assessments of the facilities. Floodwaters did not reach the refinery and wind damage is not expected to significantly impact resumption of operations. We expect to begin restart operations by the middle of October.
Marketing and Supply
ConocoPhillips continues working to ensure reliable crude supplies for refinery operations and expects to have adequate crude supplies to keep our available refineries running at capacity.
Refined products supply, including gasoline and diesel, has been significantly impacted by the refinery shut downs caused by Hurricanes Katrina and Rita. ConocoPhillips employees are working diligently to maximize the capabilities of the company's refineries and transportation system as well as importing refined products to supply our customers. Due to the significant number of refineries shut down by the hurricanes, we expect overall U.S. processed refined products will be constrained throughout the remainder of this year compared to similar periods in prior years.
Following Hurricane Rita, the company reopened its Houston-area terminal in Pasadena, Texas, last Saturday and has been providing fuels to the retail sites it supplies in the greater Houston market.
"ConocoPhillips does not tolerate price gouging and has exhibited strong restraint on pricing in the aftermath of both Hurricane Rita and Hurricane Katrina," said Jim Mulva. The company froze wholesale gasoline prices to branded customers in Louisiana, Mississippi and Alabama immediately following Hurricane Katrina and kept wholesale prices to branded customers flat in eastern Texas and Louisiana following Hurricane Rita. Furthermore, the company reacted with substantially lower price increases in other Gulf Coast markets to our branded wholesale customers compared to the increase in the spot commodity markets. Prior to the landfall of Hurricanes Katrina and Rita, we contacted our gasoline distributors and requested their support in our efforts to act responsibly in the communities we serve. ConocoPhillips markets gasoline through approximately 300 company-owned outlets and approximately 12,000 branded franchise outlets.
Energy Challenges
"The country is facing a significant energy challenge and all of us must do our part to meet this challenge," Jim Mulva added. "This is both a short and long-term issue. All citizens should try to conserve energy use. We must all be proactive in improving energy efficiency. ConocoPhillips, along with our industry and other related industries, need to make new investments in our traditional business and infrastructure as well as alternative fuels. Regulatory assistance could be helpful in this area, including streamlining the permitting process for expanding existing capacity and siting new refineries. Fuel specification requirements should also be reviewed to determine if they can be modified to increase efficiency while maintaining current environmental standards. I look forward to meeting with government and other industry leaders to work together to meet the country's energy needs."
Assistance
ConocoPhillips has been operating a toll free phone number, 888-766-1100, for employees since before Hurricane Rita. Employees are encouraged to call this number to update the company on their welfare and status. In addition, the company is offering financial assistance to employees displaced by the hurricane.
The company is also donating fuel to municipalities and public safety agencies in areas hit hardest by the storm.
ConocoPhillips is an integrated petroleum company with interests around the world. For more information, go to www.conocophillips.com.
CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that contain projections about our revenues, income, earnings and other financial items, our plans and objectives for the future, future economic performance, or other projections or estimates about our assumptions relating to these types of statements. These statements usually relate to future events and anticipated revenues, earnings, business strategies, competitive position or other aspects of our operations or operating results. In many cases you can identify forward-looking statements by terminology such as "anticipate," "estimate," "believe," "continue," "could," "intend," "may," "plan," "potential," "predict," "should," "will," "expect," "objective," "projection," "forecast," "goal," "guidance," "outlook," "effort," "target" and other similar words. However, the absence of these words does not mean that the statements are not forward-looking. The forward-looking statements are based on management's expectations, estimates and projections about ConocoPhillips and the petroleum industry in general on the date this statement was released. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Economic, business, competitive and regulatory factors that may affect ConocoPhillips' business are generally as set forth in ConocoPhillips' filings with the Securities and Exchange Commission (SEC). ConocoPhillips is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements whether as a result of new information, future events or otherwise.
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