Leading oil refiner Caltex Australia Ltd.'s marketing outlook remains positive in the second half after marketing delivered strong results in the first half with total fuel volumes up 4.3 percent year-on-year.

"The marketing outlook remains positive. However, despite improvements in the regional supply demand balance, the refiner margin environment continues to be uncertain due to the continuing strong Australian dollar and the size of the light-heavy spread," Caltex said in a company announcement.

It said programs aimed at providing cost and capital efficiency gains will continue to deliver results to the company for the remaining six months of the year.

Caltex has decided to outsource some of its in-house maintenance activities at its Kurnell and Lytton refineries to improve its refining operations.

"A provision of approximately $7 million for associated retrenchment costs will be recognized in the second half of 2011," it said.

The company estimates a cost impact of $5 to $10 million in the first year under the federal government's move to introduce a price on carbon starting around July 2012.

"Caltex will only be responsible for its own emissions and transitional assistance has been announced to help keep Australian refineries on a level playing field with overseas competitors," it said.

Caltex reported that on an historical cost profit basis, its after-tax profit was higher at $270 million compared with $141 million for the first half of 2010.

The $270 million after tax profit includes product and crude oil inventory gains amounting to $157 million after tax due to the significant rise in the crude price during the period as against $8 million worth of product and crude oil inventory losses after tax for the same period in 2010.

Caltex likewise reported that on a replacement cost of sales operating profit (RCOP) basis, its after tax profit reached $113 million for the first half lower than the $163 million for the first half of 2010 (excluding significant items).

"The difference between the 2010 and 2011 result is largely attributable to operational disruptions that negatively impacted production levels, and the impact of abnormal and challenging externalities," it said.

According to Caltex, RCOP represents a clearer picture of the company's operations because it excludes the impact of the fall or rise in oil prices (a key external factor).

Caltex added that refinery availability was lower in the first half, exacerbated by higher cost of imports to replace lost local production, resulted to a lost opportunity cost of $50 million.

The higher Australian dollar, up 16 percent in the first half versus the same period in 2010 negatively impacted Caltex Refiner Margin earnings by $36 million.

Caltex is Australia's leading oil refiner. The combined production at Caltex's Kurnell refinery in Sydney and Lytton refinery in Brisbane comprises of 50 percent petrol, 30 percent diesel and 15 percent jet fuel. The remaining production consists of fuel oil, waxes and lubricants, bitumen, sulphur, LPG and other gases.