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BP profit hit as production drops further
AFP
LONDON
Petroleumworld.com 04 25 07British oil giant BP on Tuesday reported a 17-percent slide in first-quarter net earnings on lower crude prices and a fall in production.
BP said net profit in the January-March period fell 17 percent from the same quarter of 2006 to 4.664 billion dollars (3.440 billion euros).
First quarter oil output declined 3.0 percent to 3.912 million barrels per day from the first three months of 2006, the company said in a statement. Production has now fallen for the last seven quarters.
First quarter results were also hurt by weakening oil prices, with the average price of a barrel of Brent North Sea crude coming to 57.76 dollars in the first quarter against 61.79 dollars in the same period a year earlier.
On the London Stock Exchanges BP shares lost 1.56 percent over the day to close at 568.50 pence.
The company did not release a commentary on its prospects, which usually accompanies quarterly results.
"BP continues its dogged fight to recapture former glories," said Hargreaves Lansdown Stockbrokers in a note, while at Citigroup analysts described the results as "uninspiring" and said they could trigger weakness in BP's share price in the short term.
"With no extensive outlook statement, the market is left to wonder about operational recovery," Citigroup said.
BP has been struggling to regain investor confidence after a traumatic two years, highlighted by a fatal explosion at the Texas City refinery in the United States that left 15 people dead and the partial shutdown of its 400,000-barrel per day Prudhoe Bay field in Alaska following a leak in poorly maintained pipelines.
Some analysts have said the setbacks hastened the retirement of chief executive Lord Browne, who is leaving in July, over a year ahead of schedule. Browne will be replaced by Tony Hayward, currently in charge of the exploration and production business.
Lower output and increased costs reduced earnings at the group's exploration and production business by 11 percent to 6.034 billion dollars. The group made a one-time gain of 748 million dollars in the quarter from disposals, against a charge of 386 million dollars previously.
Earnings at the refining and marketing unit were nearly halved to 838 million dollars after a one-time charge of 229 million dollars linked to asset writedowns and operational problems at its US refineries.
Repairs to a refinery in the US midwestern state of Indiana, where output has has been halved to around 200,000 barrels a day, are continuing, BP said.
"It's not going to be a quick fix," acknowledged a BP spokesman, adding that the work would take several weeks to complete.
Despite weak profits, however, BP raised dividends for the quarter to 10.325 cents a share from 9.375 cents previously, in line with expectations.
bur/nh/adp
AFP 24 1613 GMT 04 07
Copyright© 2007 AFP. All Rights Reserved.
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