Edgar Filing: AMERADA HESS CORP

AMENDMENT NO. 1 TO FORM 10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-K/A

Amendment No. 1


	x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)


	OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2003


	o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)


	OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to

Commission File Number 1-1204

Amerada Hess Corporation

(Exact name of Registrant as specified in its charter)

DELAWARE

(State or other jurisdiction of incorporation or organization)

13-4921002

(I.R.S. Employer Identification Number)


1185 AVENUE OF THE AMERICAS, NEW YORK, N.Y. (Address of principal executive offices)		10036 (Zip Code)

(Registrant’s telephone number, including area code, is (212) 997-8500)

Securities registered pursuant to Section 12(b) of the Act:


		Name of Each Exchange
Title of Each Class		on which Registered

Common Stock (par value $1.00)		New York Stock Exchange
7% Mandatory Convertible Preferred Stock		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ü No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes ü No

The aggregate market value of voting stock held by non-affiliates of the Registrant amounted to $3,771,000,000 as of June 30, 2003.

At January 31, 2004, 89,856,630 shares of Common Stock were outstanding.

Certain items in Parts I and II incorporate information by reference from the 2003 Annual Report to Stockholders and Part III is incorporated by reference from the Proxy Statement for the annual meeting of stockholders to be held on May 5, 2004.

Amerada Hess Corporation

Form 10-K/A

Amendment No. 1

Explanatory Note

This Amendment No. 1 on Form 10-K/A to Amerada Hess Corporation’s Annual Report on Form 10-K for the year ended December 31, 2003 is being filed solely to add the financial statements of HOVENSA L.L.C., a 50% owned joint venture. These financial statements (pages H-1 to H-16) were inadvertently omitted by our filing agent during the edgarization process. The Consent of Independent Auditors is included as page H-17.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized.


	AMERADA HESS CORPORATION
	(Registrant)


	By	/s/ JOHN Y. SCHREYER



	(John Y. Schreyer)
	Executive Vice President and
	Chief Financial Officer

Date: March 15, 2004

HOVENSA L.L.C.

FINANCIAL STATEMENTS

As of December 31, 2003

With Report of Independent Auditors

H-1

HOVENSA L.L.C.

Financial Statements

December 31, 2003

Contents


Report of Independent Auditors			H-3
Financial Statements
Balance Sheet			H-4
Statement of Income and Cumulative Earnings			H-5
Statement of Cash Flows			H-6
Statement of Comprehensive Income			H-7
Notes to the Financial Statements			H-8

H-2

REPORT OF INDEPENDENT AUDITORS

Executive Committee and Members
HOVENSA L.L.C.

We have audited the accompanying balance sheet of HOVENSA L.L.C. (the “Company”) as of December 31, 2003 and 2002, and the related statements of income and cumulative earnings, cash flows and comprehensive income (loss) for each of the three years in the period ended December 31, 2003. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of HOVENSA L.L.C. at December 31, 2003 and 2002, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States.

New York, NY

January 27, 2004

H-3

HOVENSA L.L.C.

BALANCE SHEET

at December 31,

(Thousands of Dollars)


			2003			2002


ASSETS
Current Assets
	Cash and cash equivalents		$	341,169		$	11,103
	Debt service reserve fund			15,984			52,657
	Accounts receivable
		Members and affiliates		136,163			67,762
		Trade		61,973			68,823
		Other		884			19,845
	Inventories			277,355			250,349
	Deposits and prepaid expenses			48,222			49,547

		Total Current Assets		881,750			520,086

Property, Plant and Equipment
	Land			19,315			19,315
	Refinery facilities			2,071,668			2,054,994
	Other			42,956			42,880
	Construction in progress			28,890			23,733

		Total — at cost		2,162,829			2,140,922
	Less accumulated depreciation			(344,701	)		(245,936	)

		Property, Plant and Equipment — Net		1,818,128			1,894,986

Other Assets				36,743			40,353

Total Assets			$	2,736,621		$	2,455,425

LIABILITIES AND MEMBERS’ EQUITY
Current Liabilities
	Accounts payable
		Members and affiliates	$	223,664		$	116,873
		Trade		154,982			148,768
		Other		—			74
	Accrued liabilities			61,050			27,965
	Taxes payable			1,229			1,278
	Current maturities of long-term debt			—			39,500

		Total Current Liabilities		440,925			334,458

Long-Term Debt				391,928			467,253

Other Liabilities				56,215			45,581

Members’ Equity
	Members’ initial investment			1,343,429			1,343,429
	Cumulative earnings			504,124			264,704

		Total Members’ Equity		1,847,553			1,608,133

Total Liabilities and Members’ Equity			$	2,736,621		$	2,455,425

See accompanying notes to financial statements.

H-4

HOVENSA L.L.C.

STATEMENT OF INCOME AND CUMULATIVE EARNINGS

For the Years Ended December 31,

(Thousands of Dollars)


			2003			2002			2001


Sales			$	5,451,330		$	3,783,348		$	4,208,658

Cost of Sales
	Product costs			4,697,426			3,453,026			3,654,980
	Operating expenses			385,254			359,939			365,538
	Depreciation			99,174			65,345			56,647

		Total Cost of Sales		5,181,854			3,878,310			4,077,165

Margin				269,476			(94,962	)		131,493

Other
	Interest expense			(23,050	)		(8,951	)		—
	Other Income (expense)			(7,006	)		15,111			(11,573	)

Net Income (Loss)			$	239,420		$	(88,802	)	$	119,920


Cumulative Earnings
	Opening balance		$	264,704		$	353,506		$	233,586
	Net income (loss)			239,420			(88,802	)		119,920

	Closing balance		$	504,124		$	264,704		$	353,506

See accompanying notes to the financial statements.

H-5

HOVENSA L.L.C.

STATEMENT OF CASH FLOWS

For the Years Ended December 31,

(Thousands of Dollars)


				2003			2002			2001


Cash Flows from Operating Activities
	Net income (loss)			$	239,420		$	(88,802	)	$	119,920
	Adjustments to reconcile net income to net cash provided by operating activities
		Depreciation			99,174			65,345			56,647
		(Increase) decrease in accounts receivable			(42,590	)		(33,259	)		90,743
		(Increase) decrease in inventories			(27,006	)		73,399			(25,039	)
		(Increase) decrease in deposits and prepaid expenses			1,325			(41,243	)		436
		(Increase) decrease in other assets			3,610			(5,391	)		1,624
		Increase (decrease) in accounts payable and accrued liabilities			146,016			37,893			(166,184	)
		Increase (decrease) in taxes payable			(49	)		188			(89	)
		Increase in other liabilities			10,634			22,329			1,012

			Net cash provided by operating activities		430,534			30,459			79,070

Cash Flows from Investing Activities
	Capital expenditures
		Coker			(6,743	)		(85,960	)		(236,982	)
		All other			(15,573	)		(27,874	)		(70,748	)

			Net Cash used in investing activities		(22,316	)		(113,834	)		(307,730	)

Cash Flows from Financing Activities
	Long-term borrowing				74,175			226,753			264,000
	Repayment of long-term debt				(189,000	)		(115,000	)		—
	Repayment of short-term debt				—			—			(2,000	)
	(Increase) decrease in debt service reserve fund				36,673			(42,155	)		(10,502	)

			Net cash provided by (used in) financing activities		(78,152	)		69,598			251,498

Increase (Decrease) in Cash and Cash Equivalents					330,066			(13,777	)		22,838
Cash and Cash Equivalents — Beginning of the Year					11,103			24,880			2,042

Cash and Cash Equivalents — End of the Year				$	341,169		$	11,103		$	24,880

See accompanying notes to financial statements.

H-6

HOVENSA L.L.C.

STATEMENT OF COMPREHENSIVE INCOME

For the Years Ended December 31,

(Thousands of Dollars)


		2003		2002			2001



Components of Comprehensive Income (Loss)
	Net Income (loss)	$	239,420	$	(88,802	)	$	119,920
	Unrealized losses on cash flow hedges		—		—			(4,045	)
	Reclassification of cash flow hedges to income		—		6,955			—
	FAS 133 transition adjustment		—		—			(2,910	)

Comprehensive Income (Loss)		$	239,420	$	(81,847	)	$	112,965

See accompanying notes to financial statements.

H-7

HOVENSA L.L.C.

NOTES TO THE FINANCIAL STATEMENTS

(Thousands of Dollars)

Note 1: Basis of Financial Statements and Significant Accounting Policies

Nature of Business: HOVENSA L.L.C. (Company) was formed as a joint venture between Petroleos de Venezuela, SA. (PDVSA) and Amerada Hess Corporation (AHC) to own and operate the Company’s refinery. The Company purchases crude oil from PDVSA, AHC and third parties. It manufactures and sells petroleum products primarily to PDVSA and AHC. In preparing financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses in the statement of income. Actual results could differ from those estimates. Estimates made by management include: inventory and other asset valuations, environmental obligations, depreciable lives and turnaround accruals.

The Company is jointly owned by PDVSA V.I., Inc. (PDVSA V.I.), a subsidiary of PDVSA, and Hess Oil Virgin Islands Corp. (HOVIC), a subsidiary of AHC.

A summary of all material transactions between the Company, its members and affiliates follows:


		2003		2002		2001


Sale of petroleum products:
	AHC	$	2,036,641	$	1,283,433	$	1,499,540
	PDVSA		2,031,295		1,346,879		1,498,636
Purchases of crude oil and products:
	AHC		412,582		78,582		109,598
	PDVSA		2,274,860		2,046,769		1,619,781
Freight expenses paid to AHC			58,944		20,036		54,915
Administrative service agreement fee paid to AHC			7,358		7,829		8,737
Marine revenues received from PDVSA and AHC			1,758		1,416		1,443
Bareboat charter of tugs and barges paid to HOVIC			3,442		3,442		3,770

The Company has a product sales agreement with AHC and Petroleum Marketing International (Petromar), a subsidiary of PDVSA. After any sales of refined products by HOVENSA to third parties, Petromar and AHC each must purchase 50% of HOVENSA’s gasoline, distillate, residual fuel and other products at market prices. The Company also has long-term crude oil supply agreements with Petromar, by which Petromar agrees to sell to HOVENSA a monthly average of 155,000 barrels per day of Mesa crude oil and 115,000 barrels per day of Merey crude oil.

H-8

HOVENSA L.L.C.

NOTES TO THE FINANCIAL STATEMENTS

(Thousands of Dollars) — (Continued)

PDVSA and AHC each guarantee the payment of up to 50% of the value of the crude oil purchases from third parties. In addition, PDVSA and AHC have agreed to provide funding (50% each) to the extent that the Company does not have funds to meet its senior debt obligations up to $40,000 each, until completion of construction required to meet final low sulfur fuel regulations, after which the amount becomes $15,000 each.

Cash and Cash Equivalents: Cash equivalents consist of highly liquid investments, which are readily convertible into cash and have maturities of three months or less when acquired.

Debt Service Reserve Fund: Cash held by a trustee that is not available for general corporate purposes.

Inventories: Inventories of crude oil and refined products are valued at the lower of last-in, first-out (LIFO) cost or market. During 2003, a reduction of inventory quantities in a LIFO pool resulted in a liquidation of LIFO inventories carried at below market costs, which increased net income by approximately $9,000. At December 31, 2003, LIFO inventory cost was $185,192 lower than it would have been using the average cost method.

Inventories of materials and supplies are valued at the lower of average cost or market.

Revenue Recognition: The Company recognizes revenues from the sale of petroleum products when title passes to the customer.

Depreciation: Depreciation of refinery facilities is determined principally on the units-of-production method based on estimated production volumes. Depreciation of all other equipment is determined on the straight-line method based on estimated useful lives.

H-9

HOVENSA L.L.C.

NOTES TO THE FINANCIAL STATEMENTS

(Thousands of Dollars) — (Continued)

Maintenance and Repairs: The estimated cost of major maintenance (turnarounds) is accrued. Other expenditures for maintenance and repairs are charged against income as incurred. Renewals and improvements are treated as additions to property, plant and equipment, and items replaced are treated as retirements.

Environmental Policy: The Company capitalizes environmental expenditures that increase the life or efficiency of property or that reduce or prevent environmental contamination. The Company accrues environmental expenses resulting from existing conditions that relate to past operations when the future costs are probable and reasonably estimable.

Income Taxes: The Company is a limited liability company and, as a result, income taxes are the responsibility of the members.

Interest Hedges: In 2001, under the terms of its bank credit agreement, the Company was required to use interest rate collars to reduce the effects of fluctuations in interest expense related to long-term debt. These derivatives were designated as hedges of future cash flow (cash flow hedges) and the gains or losses were recorded in other comprehensive income until the related transactions were expensed in 2002. The company’s obligation to maintain these hedges was completed in 2002.

Note 2: Inventories as of December 31 were as follows:


		2003			2002


Crude oil		$	140,171		$	148,540
Refined and other finished products			264,933			224,496
Less: LIFO adjustment			(185,192	)		(178,803	)

			219,912			194,233
Materials and supplies			57,443			56,116

	Total	$	277,355		$	250,349

H-10

HOVENSA L.L.C.

NOTES TO THE FINANCIAL STATEMENTS

(Thousands of Dollars) — (Continued)

Note 3: Other income and expense in the income statement included the following:


		2003			2002			2001


Business interruption insurance settlements		$	4,000		$	23,100		$	—
Settlement of crude quality claims			—			13,400			—
Repairs related to 2002 FCC outage			—			(14,320	)		—
Repairs related to 2001 fire damage			—			—			(9,000	)
V.I. gross receipts tax & export fee			(5,548	)		(4,626	)		(5,303	)
Write off of finance costs upon prepayment of debt			(2,540	)		—			—
Other			(2,918	)		(2,443	)		2,730

	Total other income (expense)	$	(7,006	)	$	15,111		$	(11,573	)

Note 4: Long-Term Debt

Long-term debt at December 31 was as follows:


	2003		2002


Term loan facility with banks, weighted average rate of 4.34%	$	191,000	$	350,000
General purpose revolving credit facility with banks		—		30,000
Tax-exempt revenue bonds (issued in 2002) at a rate of 6.50%		126,753		126,753
Tax-exempt revenue bonds (issued in 2003) at a rate of 6.125%		74,175		—

		391,928		506,753
Less amount included in current maturities		—		(39,500	)

	$	391,928	$	467,253

The Company has a $ 341,000 credit agreement with banks at December 31, 2003. This agreement consists of a $ 191,000 term loan facility used to finance the construction of a 58,000 barrel per day delayed coking unit and related facilities. The term debt is scheduled to be repaid in semi-annual installments beginning in 2006 and is scheduled to be fully amortized by June 2008. The agreement also includes a $150,000 general purpose revolving credit facility, which is undrawn at December 31, 2003. This facility will be reduced by $ 50,000 on December 31 of each of 2005, 2006 and 2007. Borrowings under this agreement bear interest at a margin of 3.25% above the London Interbank Offered Rate (LIBOR). The agreement is collateralized by the physical assets and certain material contracts of the Company.

H-11

HOVENSA L.L.C.

NOTES TO THE FINANCIAL STATEMENTS

(Thousands of Dollars) — (Continued)

In November 2002, the Company issued $ 126,753 of Senior Secured Tax-Exempt Revenue Bonds under the authority of the Government of the U.S. Virgin Islands and the Virgin Islands Public Finance Authority. The principal payments on the Bonds commence in 2014 and will be fully paid by July 1, 2021.

In December 2003, the Company issued $ 74,175 of Senior Secured Tax-Exempt Revenue Bonds under the authority of the Virgin Islands Public Finance Authority. The principal payments on the Bonds commence in 2015 and will be fully paid by July 1, 2022. The proceeds from this issue were used to pre-pay principal installments under the bank term loan facility.

In addition, the Company has $ 50,000 in uncommitted credit facilities with two financial institutions, which were undrawn as of December 31, 2003.

The debt agreements contain various restrictions and conditions with respect to incurrence of additional debt as well as cash distributions. Cash distributions are restricted based on cash flow coverage ratio covenants.

In accordance with the debt agreements, long-term debt is scheduled to be repaid as follows:


		Debt
Year		Repayment


2004		$	—
2005			—
2006			65,000
2007			76,500
2008			49,500
Subsequent years			200,928

	Totals	$	391,928

In 2002, the Company capitalized interest of $ 18,901 on the delayed coker unit. The interest paid (net of amounts capitalized) was $ 24,584 in 2003, $ 8,619 in 2002 and, $ 0 in 2001.

H-12

HOVENSA L.L.C.

NOTES TO THE FINANCIAL STATEMENTS

(Thousands of Dollars) — (Continued)

Note 5: Pension Plan

The Company has a noncontributory, defined benefit pension plan for substantially all of its employees. The plan provides defined benefits based on years of service and final average salary. The Company uses December 31 as the measurement date for its plan.

The following table reconciles the benefit obligation and fair value of plan assets and shows the funded status of the pension plan:


			2003			2002


Reconciliation of pension benefit obligation
	Benefit obligation at January 1		$	15,721		$	9,858
	Service costs			3,649			3,293
	Interest costs			1,085			756
	Actuarial loss			2,150			1,889
	Benefit payments			(130	)		(75	)

		Pension benefit obligation at December 31		22,475			15,721

Reconciliation of fair value of plan assets
	Fair value of plan assets at December 31			8,296			6,216
	Actual return on plan assets			1,887			(781	)
	Employer contributions			3,302			2,936
	Benefit payments			(130	)		(75	)

		Fair value of plan assets at December 31		13,355			8,296
Funded status (plan assets less than benefit obligations)				(9,120	)		(7,425	)
	Unrecognized net actuarial loss			5,489			4,904

		Net amount recognized	$	(3,631	)	$	(2,521	)

The accumulated benefit obligation was $17,309 at December 31, 2003 and $11,147 at December 31, 2002.

H-13

HOVENSA L.L.C.

NOTES TO THE FINANCIAL STATEMENTS

(Thousands of Dollars) — (Continued)

Components of funded pension expense consist of the following:


		2003			2002			2002


Service cost		$	3,649		$	3,293		$	2,879
Interest cost			1,085			756			473
Expected return on plan assets			(854	)		(709	)		(411	)
Amortization of net loss			452			136			53

	Net periodic benefit cost	$	4,332		$	3,476		$	2,994

Prior service costs and gains and losses in excess of 10% of the greater of the benefit obligation or the market value of assets are amortized over the average remaining service period of active employees.

The actuarial assumptions used in the Company’s pension plan were as follows:


		2003			2002			2001


Assumptions used to determine benefit obligations at December 31
	Discount rate		6.25	%		6.75	%		7.25	%
	Rate of compensation increase		4.50	%		4.50	%		4.50	%
Assumptions used to determine net costs for years ended December 31
	Discount rate		6.75	%		7.25	%		7.25	%
	Expected return on plan assets		8.50	%		9.00	%		9.00	%
	Rate of compensation increase		4.50	%		4.50	%		4.50	%

HOVENSA’s pension asset allocation is similar to that of one of its members. The pension plan’s assumed long-term rate of return is consistent with the long-term rate of return on plan assets of the member’s plan with a similar asset allocation. The member’s long-term rate of return is based on historical long-term returns, adjusted downward slightly to reflect lower prevailing interest rates.

H-14

HOVENSA L.L.C.

NOTES TO THE FINANCIAL STATEMENTS

(Thousands of Dollars) — (Continued)

The Company’s pension plan assets by category are as follows:


Asset Category		2003			2002



Equity securities			56	%		53	%
Debt securities			44	%		47	%
	Total		100	%		100	%

The target investment allocations for the plan assets are 55% equity securities and 45% debt securities. Asset allocations are rebalanced on a regular basis throughout the year to bring assets to within 2-3% range of target levels. Target allocations take into account analyses performed by the Company’s pension consultant to optimize long term risk/return relationships. All assets are highly liquid and may be readily adjusted to provide liquidity for current benefit payment requirements.

The Company expects to contribute approximately $ 7 million to its pension plan in 2004.

Note 6: Interest Hedges

On January 1, 2001, the Company adopted FAS No. 133, Accounting for Derivative Instruments and Hedging Activities. This statement required that the Company recognize all derivatives on the balance sheet at fair value and established criteria for using derivatives as hedges.

The Company used interest rate collars to reduce the effects of fluctuations in interest expense related to long-term debt.

The January 1, 2001 transition adjustment from adopting FAS No. 133 resulted from these hedges and was a cumulative decrease in accumulated other comprehensive income of $ 2,910. The adoption of FAS No. 133 did not affect net income or cumulative earnings.

The interest rate collars and the hedged transactions matured in 2002. These interest rate collars were designated as hedges of expected future cash flows (cash flow hedges), and the losses were recorded in other comprehensive income until the hedged interest was recognized. At December 31, 2001, deferred losses from interest hedging were $ 6,955.

The Company reclassified hedging gains and losses on interest rate collars from accumulated other comprehensive income to interest expense (portions of which were capitalized) over the period hedged. Hedging increased interest expense in 2001 by $ 3,415 (including $ 1,360 associated with the transition adjustment at the beginning of the year) and $ 6,955 in 2002. The ineffective portion of hedges is included in current earnings. The amount of hedge ineffectiveness was not material.

H-15

HOVENSA L.L.C.

NOTES TO THE FINANCIAL STATEMENTS

(Thousands of Dollars) — (Continued)

Note 7: Environmental Requirements

In December 1999, the United States Environmental Protection Agency (EPA) adopted rules that phase in limitations on the sulfur content of gasoline beginning in 2004. In December 2000, the EPA adopted regulations to reduce substantially the allowable sulfur content of diesel fuel by 2006. The EPA is also considering restriction or a prohibition on the use of MTBE (New York and Connecticut have banned it effective January 1, 2004), a gasoline additive that the Company produces and uses to meet United States regulations requiring oxygenation of reformulated gasoline.

The Company is reviewing options to determine the most cost effective compliance strategies for these new fuel regulations. The costs to comply will depend on a variety of factors, including the availability of suitable technology and contractors and whether the minimum oxygen content requirement for reformulated gasoline remains in place if MTBE is banned. Capital expenditures necessary to comply with the low sulfur gasoline and diesel fuel requirements are estimated to be $ 446,000 (including approximately $ 8,850 already incurred) and are expected to be completed by 2006.

Note 8: Contingencies

The Company is party to litigation arising out of the normal course of its business. In the opinion of management, all matters are adequately covered by insurance or reserves or, if not covered or reserved for, are not likely to have a material adverse effect on the financial position of the Company.

H-16

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in Registration Statements (Form S-8, Nos. 333-94851, 333-43569 and 333-43571, and Form S-3, No. 333-110294) pertaining to the Amerada Hess Corporation Employees’ Savings and Stock Bonus Plan, Amerada Hess Corporation Savings and Stock Bonus Plan for Retail Operations Employees, Amended and Restated 1995 Long-Term Incentive Plan and the Amerada Hess Corporation Registration Statement of our report dated January 27, 2004 with respect to the financial statements of HOVENSA L.L.C. included in the Amerada Hess Corporation Form 10-K/A, Amendment No. 1, for the year ended December 31, 2003.

New York, NY

March 12, 2004

H-17