(Reuters) - Marathon Petroleum Corp posted a 56 percent jump in the number of barrels of crude it processed per day during the fourth quarter and the refiner’s margins rose, helped by access to cheap oil from Canada and its purchase of rival Andeavor.
At its refineries in the U.S. Midwest, Marathon has been processing large amounts of Canadian crude, which has turned cheaper relative to the benchmark West Texas Intermediate
because of transport bottlenecks and a storage glut in Canada.
Refiners such as Marathon process crude into diesel, gasoline and other products. Some of them faced here challenges after the United States imposed sweeping sanctions on Venezuela's state oil company PDVSA.
In November, Marathon Chief Executive Officer Gary Heminger said the company was importing more than 500,000 barrels per day of Canadian crude.
On Thursday, the Findlay, Ohio-based company said refining and marketing margin per barrel of oil jumped about 15 percent in the fourth quarter. Crude oil throughput rose to about 3 million barrels per day from 1.84 million barrels last year, helped by its acquisition of Andeavor.
Marathon agreed to buy Andeavor for more than $23 billion last year, to become one of the world’s largest refiners. The deal was closed in October.
“We have realized $160 million of synergies in just three months and continue to expect total annual gross run-rate synergies of up to $600 million at year-end 2019,” CEO Heminger said in a statement.
Income from its retail unit, which includes Speedway gas stations and convenience stores, rose more than four times to $613 million.
The company made a margin of 32.35 cents per gallon at its stores, compared with 17.72 cents last year.
“Relative to our estimate, the beat was roughly split between refining and retail, two areas that benefited from the extreme drop in crude prices in the quarter,” analysts at Tudor, Pickering and Holt said.
Marathon’s adjusted profit of $2.41 per share beat the energy investment firm’s estimate of $2.24 per share.
Net income attributable to Marathon fell to $951 million, or $1.38 per share, in the fourth quarter ended Dec. 31, from $2.02 billion, or $4.13 per share, a year earlier.
In the year-ago quarter, the company recorded a $1.5 billion gain related to the U.S. tax overhaul.
Total revenue rose to $32.54 billion from $21.24 billion.
Shares of Marathon were up almost a percent amid a drop in oil prices on Thursday.
Reporting by John Benny in Bengaluru; Editing by Maju Samuel