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Business Briefs

Posted: Thursday, May 03, 2001

Tesoro signs agreement with Unocal

Tesoro Petroleum Corp. has signed a nonexclusive license agreement that allows it to make and sell all gasolines subject to patents held by Unocal Corp. subsidiary Union Oil Company of California.

"This agreement removes uncertainty regarding patent royalties as we expand our production and marketing of cleaner-burning gasolines," said Jerry H. Mouser, Tesoro executive vice president for commercial marketing.

The agreement sets a defined royalty for making and selling certain reformulated and California-specification gasolines subject to Union Oil patents.

Fishing closures for sea lions draw disaster relief

The Southwest Alaska Municipal Conference wants to hear from fishers, businesses and communities hurt economically by groundfish closures designed to protect Steller sea lions.

"SWAMC is asking people to fill out a confidential survey that will help determine how $30 million in disaster relief funds will eventually be distributed," a press release said. "This is an information-gathering process and, at this point, is not a claim."

Copies of the survey are available at www.northerneconomics.com on the Internet or by faxing a request to 274-5601. Completed surveys can be faxed back to the same number. Surveys are due by May 5, and results will be presented at the SWAMC spring conference May 10-11 in Unalaska.

BP plans North Slope production boost

BP Exploration (Alaska) Inc. plans to increase its North Slope oil production by a fifth in the next 18 months to 350,000 barrels per day, said company president Richard Campbell.

"We plan to accomplish this through the 2001 startup of Northstar, new exploration in the National Petroleum Reserve Alaska, satellite development and sustaining core production," he said.

BP plans to spend more than $1.4 billion in Alaska this year.

ACS reports rising revenues and first-quarter loss

Alaska Communications Systems Group Inc. reported a first-quarter net loss of $4.9 million, compared with a loss of $3.1 million in the first quarter last year.

However, its first quarter revenues were $81.2 million, up from $78.2 million in the first quarter last year. Its earnings before interest, taxes, depreciation and amortization were $30.7 million, up from $29.8 million in the first quarter last year.

"We are pleased that ACS achieved strong sequential growth in revenues and operating cash flow and feel that 2001 is off to a tremendous start," said Chuck Robinson, chairman and chief executive. "We achieved these results despite the continuing impasse in resolving a number of regulatory issues and a miscue with the Infinite Minutes program, which we have subsequently corrected. We believe that we are the best positioned telecommunications provider in the markets we serve, including our competitive markets."

GCI offers combined e-mail, voice mail and fax

General Communications Inc. has introduced "The Link," a new service that makes the user's e-mail, voice mail and fax messages available in a single "virtual mailbox" accessible from any phone or computer. Users also can receive faxes electronically, store them indefinitely and e-mail them to other addresses.

Phillips reports strong first-quarter earnings

Phillips Petroleum Co. reported first-quarter net income of $490 million, up from $250 million in the first quarter last year.

Jim Mulva, chief executive, credited higher U.S. natural gas prices, increased crude oil production and higher refining, marketing and transportation earnings.

Those gains more than offset higher interest costs and a $39 million net operating loss from Phillips' chemicals segment, represented by Phillips' 50 percent interest in Chevron Phillips Chemical Co. Phillips also lost earnings due to year-end sales of its Zama properties in Canada and its refining and marketing assets in the United Kingdom, and due to first-quarter "turnaround' maintenance at one of its refineries.

"Our first-quarter 2001 average worldwide crude oil sales price was $25.81 per barrel, down from $27.07 in the same period a year ago," Mulva said.

"The company's Lower 48 and foreign natural gas prices averaged $6.41 and $2.83 per thousand cubic feet, respectively, compared with $2.40 and $2.31 in the first quarter of 2000.

"Compared with the fourth quarter of 2000, this quarter's earnings were down 28 percent, primarily as a result of a $3.92 per barrel decline in our average quarterly crude oil price. In addition, the fourth quarter of 2000 benefited from a $66 million inventory liquidation gain in the company's refining, marketing and transportation business."

Phillips is on target to increase production 15 percent this year compared to last, he said.

"We are continuing to move forward with the development of legacy projects, such as the Peng Lai 19-3 oil field in China's Bohai Bay; the Timor Sea liquids, gas and liquefied natural gas projects; and the Hamaca heavy-oil project in Venezuela. We also are continuing to make progress on other important projects, including Alaska North Slope gas resources, the Kashagan oil field in Kazakhstan and opportunities in the Middle East.

"With completion of the pending Tosco acquisition later this year, plus strong cash flows from operations, our balance sheet will continue to strengthen. We expect to reduce our debt-to-capital ratio to 37 percent by the end of 2001."

Soldotna chamber announces speakers

Coming speakers at the Soldotna Chamber of Commerce are Chuck Swener of the Department of Transportation and Public Facilities and Tom Pitt of Quality Asphalt Paving on May 8, Joe Jurco of the VFW Voice of Democracy on May 15, Evy Gebhardt and Emily Aley on the International Year of the Volunteers on May 22, and Alan Heim, Alaska director for the Social Security Administration, on May 29.

Machines could remove pin bones from salmon

The Geophysical Institute machine shop has signed a licensing agreement with the University of Alaska Fairbanks for development of two devices used to remove pin bones from salmon.

Pin bones are tiny bones that conventional salmon-cleaning machines leave behind. One machine, designed for grocery stores, fishers and small-volume producers, fits on a table top. The other, as large as a refrigerator, is meant for high-volume users, such as canneries.

Geophysical Institute machine shop supervisor Larry Kozycki and machinist Ned Manning spent three years perfecting the two machines. Kozycki's goal is to entice another company to manufacture the machines.

The machine shop and the University of Alaska will receive licensing fees.

Tesoro profits booming

Tesoro Petroleum Corp. announced record first-quarter net earnings of $21.7 million, up from $9.3 million in the first quarter last year.

"Stronger earnings were principally due to a combination of higher margins and increased throughput," said Bruce A. Smith, chairman, president and chief executive. "Margins benefited from increasing the amount of lower-cost, heavy crude processed through our refineries. To capture the benefit of the current high-margin environment, we raised refinery throughput 7 percent compared to last year's first quarter."

Operating profit for Tesoro's refining and marketing segment was $53 million, up 75 percent from the first quarter last year. Operating expenses were $119 million, up 14 percent from the first quarter last year due to higher costs for utilities and fuel, higher throughput and increased employee costs.

Smith said he expects margins to remain strong during the second and third quarters but weaken in the fourth. To produce more while margins are high, Tesoro is delaying "turnaround" maintenance at its Anacortes, Wash., refinery until the first quarter of 2002. Smith estimates the company's 2001 production to average from 255,000 to 260,000 barrels per day.

Smith said he has raised his forecast for Tesoro's 2001 earnings from the previous estimate $1.60 to $2 per share to a new estimate of $2.40 to $3 per share.

Tesoro announces dividend

Tesoro Petroleum Corp. has declared a regular quarterly dividend of $.288875 on its 7.25 percent mandatorily convertible preferred stock. It will pay the dividend July 1 to holders of record, on June 15, of premium income equity securities (PIES), each representing a hundredth of a share of preferred stock.

This will be the last dividend paid on Tesoro's PIES, which will automatically convert to common stock on July 1.



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