Question-and-Answer Session
Operator
(Operator Instructions). Your first question comes from Douglas Terreson – ISI Group.
Douglas Terreson – ISI Group
My question has to do with some of Mike's comment on costs and specifically how the operating actions that you guys have taken in the last couple of months are likely to affect the non-energy component of operating expenses in coming quarters or whether you feel we've already seen the majority of those benefits.
And also, whether some of the asset reviews you guys have undertaken elsewhere in the system have uncovered significant opportunities on the cost side either operating or SG&A, and so just any update on the hope for cost improvement over the next couple of quarters would be appreciated.
Mike Ciskowski
Well, on a year-to-date basis on the resigning OpEx on the $200 million, a big piece of that was due to lower maintenance expenses which a lot of that is less contractors at our refineries. The salaries, wages and benefits has also been reduced over our refining system by about $50 million and that's nine months.
Professional fees and outside services has also been reduced by about $20 million, so a lot of little things like this that I think Rich and his organization are focusing on to reduce the cost at the refineries.
Richard Marcogliese
Yes, Doug, let me add a little more color onto that. We've initiated a number of improvement activities and I would say bottom-line where we are today, we've probably taken $150 million a year of cost out of our system and it relates to a number of categories. We're being a lot closer on prioritization of maintenance work and contractor resources, so we're working that aggressively.
We're working non-capital related energy utilization improvements through stewardship and just tighter operations. We're controlling plant overtime and we are also taking a look at our refineries where they are out of line with efficient staffing levels and we are implementing reduction programs.
As was noted, we're taking out about 150 people from Delaware City and have plans to take out about 100 positions in Paulsboro, and those efforts are under way currently. So though a lot of intense expense focus self-help kind of items, I think we feel good about eliminating about $150 million per year in cost.
Douglas Terreson – ISI Group
And just to clarify, that's over and above or that's already included in some of the gains you guys have made non-energy so far?
- To read the full transcript on Seeking Alpha, click here »
