Refining and marketing continues to be an important
profit and cash generator for the Corporation, with growth opportunities
in both retail and energy marketing. In 2003, refining and marketing
achieved its best financial performance in 10 years.
The HOVENSA refinery in the United States
Virgin Islands is jointly owned by the Corporation
and Petroleos de Venezuela (PDVSA). It is one of
the largest refineries in the world. The facility is
strategically located in the Caribbean, allowing
for short crude supply lines from Venezuela, as
well as easy access to U.S. Gulf and East Coast
product markets.
In 2003, the refinery successfully completed the
first year of operation of a 58,000 barrel per day
coking unit. Gross crude runs at the refinery averaged
440,000 barrels per day for 2003, which, combined with improved
refining margins, resulted
in a significant improvement in financial performance
versus 2002.
The Corporation's fluid catalytic cracking unit in
Port Reading, New Jersey produces high-quality,
clean-burning gasoline for northeast markets.
The facility averaged feedstock runs of 54,000 barrels
per day and realized a significant improvement
in gasoline margins over 2002.
Both refining facilities continue
to produce gasoline with specifications that result in emissions
well below the U.S. national average.
Retail
The HESS retail network has become the leading
independent gasoline convenience store marketer
on the East Coast. In 2003, four new locations were
built, while 10 existing sites were upgraded with the
addition of HESS EXPRESS convenience stores.
HESS EXPRESS stores generally feature several
fast food offerings and proprietary coffee/fountain
programs and are major destinations for take-home
bulk beverages. HESS EXPRESS gasoline volumes
and convenience store sales are significantly higher
than industry averages.
In early 2004, WilcoHess, LLC, the joint venture
between Amerada Hess and A.T. Williams Oil
Company, completed the acquisition of 50 retail
facilities from Service Distributing Company,
significantly strengthening our brand position
in the growing North Carolina market. With that
purchase, the total number of Hess branded retail
facilities increased to approximately 1,250.
Energy Marketing
In energy marketing, the Corporation is a major
supplier of natural gas, fuel oil and electricity,
with more than 24,000 commercial and industrial
customer locations primarily on the East Coast.
Cold weather in the first quarter of 2003 resulted
in strong margins and demand for fuel oil and
natural gas, significantly improving financial results
over 2002. Supply & Terminals
The Corporation operates a network of twenty-two
strategically located petroleum terminals on the
East Coast of the United States. In addition to
supply from our refining assets, a well-balanced
combination of term and spot supply contracts
provides the flexibility to manage product inventories
effectively across the network. In 2003, the
Corporation was able to leverage our network to
provide customers superior reliability of supply
during the unusually cold winter weather.
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