MercoPress. South Atlantic News Agency

Chile's oil company ENAP reports net loss of a billion USD

Chile's government owned oil and gas corporation, ENAP reported a net loss of 958 million US dollars in 2008 after the company's refinery unit lost money on purchasing imported crude oil.

In 2007 ENAP had a net income of 49.6 million US dollars according to a statement on the Web site of Chile's securities regulator. But products refined from oil bought last year when fuel prices were higher caused losses of more than 650 million, the company said in a statement. "That meant buying at high prices and selling refined products at much lower prices, leading to the depreciation in crude stocks and ENAP products," ENAP said in a statement, explaining that the regular business cycle ranges from 45- to 75 days. Oil prices collapsed from highs of 145.3 US dollars per barrel in July to 33.80 per barrel in December 2008. A drought that cut hydropower last year led the company to import more diesel fuel for utilities, leaving it with expensive stockpiles when rainfall returned. Similarly ENAP lost 100 million after Argentine suppliers of natural gas curbed shipments, boosting power costs. Finally a weaker Chilean peso against the US dollar accounted for 128 million of losses, according to the company. ENAP's CEO Rodrigo Azocar named new heads of the company's refinery unit and marketing unit last month in a bid to end losses. Along with refining fuel, the company produces and explores for oil and natural gas and is searching for geothermal energy. The only positive news in ENAP's balance sheet were the operational results of exploration and production by its international branch Enap Sipetrol and Enap Magallanes currently involved in a mini natural gas boom in the extreme south of Chile.