“There has been a disappointing start-up delay and significant overrun of our original planned investment in the clean fuels project primarily due to late delivery of materials and equipment and a shortage of skilled labour,” Reeves said.

“Lower refinery production and increased imports of 2006-standard products and exports of non-2006-standard products due to the Clean Fuels Project delay will negatively affect the 1H2006 earnings.”

Caltex said historical net profit for the 2005 calendar year was $A595 million, up from $A570 million in 2004, and replacement cost operating profit – which factors out changes in oil prices – rose 18% to $A414 million.

Chairman Dick Warburton said the 2005 result was driven by strong operating performance and global market impacts, and Caltex was in a strong position for further growth.

“There is great momentum in the business and we feel very confident that in the years ahead our strategies will achieve a further competitive edge in an external environment that, while always volatile, appears favourable,” he said.

Caltex averaged a refining margin of $US8.40 per barrel over 2005, up from $US6.60 per barrel in 2004.

The company produced 11.6 billion litres of petroleum products in 2005, slightly lower than 2004’s record 11.8 billion litres.

Diesel sales rose 5% while non-fuel income rose 11%.