Exxon’s Unit Halves 2012 Dividend on French Oil Inventory Tax
Esso SAF, the French refinery operator owned by Exxon Mobil Corp. (XOM), cut its 2012 dividend in half because of a tax on oil inventories.
Esso will propose a payout of 2 euros a share compared with 4 euros a share for 2011, according to a statement. The dividend has dropped steadily from 8.5 euros a share in 2009.
France imposed a one-time 4 percent levy on the value of fuel inventories held by refiners, distributors and other businesses last year to raise about 550 million euros ($710 million). The move, part of President Francois Hollande’s bid to lower the deficit, was criticized by industry lobby Union Francaise des Industries Petrolieres for hurting the competitiveness of local refineries.
“The tax is unfair and aberrant,” Francis Duseux, chief executive officer of Esso SAF (ES), said today at a press conference in Paris. “We would probably have kept the dividend at the same level as 2011 if it hadn’t been for the tax.”
The tax cost Esso, which operates two refineries in France as well as a service-station network, 33 million euros last year while dividend payments for 2012 will amount to 26 million euros, he said.
The Port-Jerome-Gravenchon refinery halted units with total capacity of about 70,000 barrels a day, or about a third of the plant, at the end of February for six or seven weeks of maintenance, Duseux said. The site had a utilization rate of 74 percent last year, compared with 90 percent at Fos-sur-Mer, because of maintenance work.
Esso reported a net profit of 63 million euros last year compared with 46 million euros in 2011, according to the company. Refining margins averaged 34 euros a metric ton, ranging from 14 to 63 euros a ton in the period, according to French environment ministry data.
Esso is seeking to sell its service stations to “more agile” operators through a type of franchise system, retaining supply contracts for 10 years, Duseux said.
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