FINDLAY, Ohio — A drop in fuel demand and low oil prices have battered Marathon Petroleum Corp. during the coronavirus pandemic.
The Findlay-based company announced Tuesday it had cut spending and was borrowing money after losing $9.2 billion during the first quarter.
“As everyone is aware, the global pandemic became the focus in the quarter and that continues today with our immediate priority on safely operating our assets to supply product to the market, protecting the health and safety of our employees and customers and supporting the communities in which we operate,” Marathon’s new President and CEO Michael J. Hennigan said during a conference call with investors.
Marathon operates 16 refineries across the country, including one in Canton. The company also runs Speedway convenience stores and controls MPLX, a company that gathers, processes and transports oil and natural gas in the Utica Shale and other regions.
Stay-at-home orders during the pandemic drastically reduced demand for fuel as schools and business closed and commuters worked from home. States have just started to lift some of those restrictions.
Marathon’s loss works out to $14.25 per share, compared to its loss of 1 cent per share during the same quarter last year.
Hennigan said Marathon’s midstream and retail operations had strong results, but the refining sector struggled. Most of the $9.2 billion loss involved a write-down in the value of assets.
Hennigan said Marathon would cut its capital spending for the year by $1.4 billion and planned to trim operating expenses by $950 million.
Marathon has temporarily idled refineries in Martinez, California, and Gallup, New Mexico, and suspended stock repurchases.
Hennigan said Marathon has $1.6 billion in cash and has borrowed $3.5 billion, leaving it with $6.75 billion in credit remaining.
The company still plans to spin off of its Speedway stores in the fourth quarter, although the pandemic could change that timing.
Marathon donated 575,000 N95 masks to 45 hospitals and the Marathon Petroleum Foundation gave $1 million to the American Red Cross to assist with pandemic response, Hennigan said.