OREANDA-NEWS. October 29, 2014. Accumulated net income posted by the Cepsa Group for the nine-month period ended September 30, 2014, on a clean current cost of supplies (CCS) basis which calculates inventory valuation at replacement cost and excludes special items, totaled EUR277 million, down 6% year-on-year.

This earnings performance reflected an operating environment characterized by a steep decline in oil prices in the third quarter, partly offset by a firmer US dollar and an upswing in refining margins (which benefited from the lower cost of oil).

Applying International Financial Reporting Standards (IFRS), which uses the weighted average cost method of accounting for valuing inventory, Cepsa’s net income in the first three quarters of 2014 was EUR 121 million, compared with EUR 236 million in the same period of 2013, impacted significantly by inventory valuation and the slump in crude oil prices.

Highlights of the third quarter include the start-up of production in the Los Angeles-IX well in Block 131 in Peru; the joint venture with Sinar Mas to produce fatty alcohols in Indonesia; and the launch of a low-sulfur marine fuel (0.1%), ahead of new MARPOL Regulations (International Convention for the Prevention of Pollution from Ships, which introduce a 0.10 percent sulfur cap from 2015 on bunker fuels used within Emissions Control Areas).

Capital expenditure in the nine-month period amounted to EUR 2,624 million, largely allocated to the E&P and Petrochemicals businesses.