PBF to take big writedown on value of oil inventories

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PBF crude oil unloading site near Delaware City.
PBF crude oil unloading site near Delaware City.

Delaware City Refining Co. owner PBF Energy Inc.announced  that it expects to record a non-cash, pre-tax income statement charge related to the recent plunge in oil prices.

The charge for the reduction in the value of the inventory would range $650 million and $750 million for 2014 for crude oil that is being held for refining.

PBF, after acquiring  its refineries in 2010 and 2011, had inventories valued at levels that made them susceptible to the recent decline in commodity prices, a release stated.

The actual adjustment will be determined considering many factors including any change in commodity prices that may occur prior to completing  year-end 2014 financial results.

PBF’s stock price has risen to $27 a share as it is believed that the company will ultimately profit from the lower oil prices at its refineries in Ohio, Delaware and New Jersey.

PBF has also applied for a Coastal Zone Permit for a $100 million project at the Delaware that would produce low-sulfur fuels.

Shareholders also receive  a 4 percent dividend.

PBF has profited on discounted crude oil prices coming out of Canada and North Dakota, using rail transport to feed its refineries with the North American crude.

The company can also accept shipments from Saudi Arabia and other overseas producers through its facilities in Delaware City.

 

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