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New Zealand Refining, operator of the country's only oil refinery, said its average profit from processing crude oil in the past two months fell 58 per cent from a year earlier.
Its refining margin fell to US$4.06 a barrel in September and October, down from US$9.78 a year earlier and US$10.40 in July and August.
"High crude and product inventories around the world in conjunction with a reduction in geopolitical tensions" contributed to the drop in margins, said a company statement to the New Zealand stock exchange.
The refinery at Marsden Pt is controlled by the local units of Chevron, Royal Dutch Shell, Exxon Mobil and BP. Those customers do not pay more than an average US$9 a barrel a year for processing under a 1996 agreement.
Margins for November and December are likely to average US$4 to US$6 a barrel.
The company said this should leave processing income for the year similar to last year's total.
