Oil group reports losses of $12.4m

ConocoPhillips Ireland, the former state-owned oil company, made a loss of $12.4 million last year. The company, which is a subsidiary of the eponymous US oil giant, paid $20 million in 2001 for the assets of Irish National Petroleum. These are now valued at $140 million (€108 million), according to the most recent accounts for the business.

But when a $130 million debt owed to its US multinational parent is taken into account, along with a €8.5 million provision for tax, the net liabilities of the operation are €12.5 million.

The accounts, filed with the Companies Office last month, show the Irish operation had a turnover of $822 million in 2003, up from $689 million in 2002. It made a gross profit of $24.7 million, but this was reduced to a operating loss of $1.25 million after charging administrative expenses of $24.7 million. When restructuring costs and interest are taken into account the loss before tax grew to $12.4 million, compared to $12.2 million in 2002.

A review of the Irish operation was carried out in 2002 following the merger of Conoco and Phillips. This followed the earlier merger of Phillips with Tosco Corporation , who had purchased the business of INPC - including the Whitegate, Co Cork oil refinery and the Whiddy Island storage facility - in 2001.

The review led to the restructuring of the financial, commercial and trading activities of the company in 2002 and 2003. The interest bill of $7.4 million in 2003 related to a unsecured loan of $130 million from its parent company which bears interest at commercial rates, according to notes to the accounts.

Another note points out that "the final financial effect of a number of items arising under the sale and purchase agreement between Irish National Petroleum Company and Tosco Corporation under which business assets, subsidiaries and certain business of INPC were acquired remain to be agreed".

The 2001 deal valued the business at €117 million, with the state agreeing to absorb the debts and the environmental liabilities of the business.

The Minister for Communications, Energy and the Marine, Mr Dempsey told the Dáil last month that to date only €20 million has been received and the payment of another €10 million depends on the settlement of a number of issues including liability for environmental damage.