March 29, 2024

BP Profit Misses Forecasts

LONDON — BP reported a profit in the second quarter Tuesday, saying higher oil and gas prices had made up for lower production and rising costs.

The British company reported profit of $5.6 billion in the April through June period, below the average forecast of $6 billion from 12 analysts polled by Reuters. That compared to a loss of $17 billion in the same period last year, when BP had to set aside billions of dollars to deal with the Gulf of Mexico oil spill.

Profit in the second quarter was 21 percent below the $7.1 billion it generated in the first quarter.

“We expect the momentum of our recovery to build into 2012 and 2013 as new projects come on stream” and as “uncertainties reduce,” BP’s chief executive Robert Dudley said in a statement.

BP said it expects nine new projects to come on stream in 2012 and 2013, including in Angola, the North Sea and the Gulf of Mexico. Mr. Dudley is focusing on BP’s exploration business outside the United States, while still trying to regain permission for new drilling projects in the Gulf of Mexico.

Mr. Dudley, who took over at the helm of BP in October, has increased investments in fields with a bigger growth potential. His plans suffered an embarrassing defeat earlier this year, however, when a cooperation agreement in Russia to explore the Arctic collapsed amid opposition from BP’s existing partners in the country.

A $7 billion exploration deal with Reliance Industries of India has gone ahead, however.

Mr. Dudley is also trying to regain investor confidence after the explosion of the oil rig in the Gulf a year ago, the aftermath of which is still weighing on BP’s share price.

Oil and gas production in the second quarter fell 11 percent to 3.43 million barrels of oil equivalent a day, the company said. The drop followed a suspension of drilling in the Gulf and the sale of some assets.

BP has been selling assets worldwide, aiming to raise $30 billion by the end of this year to help pay for the costs of the spill. It has already sold about $25 billion worth so far, it said Tuesday.

“Shadows from the Gulf spill may have lightened, but the forced disposal program has had an inevitable effect on output,” Richard Hunter, head of U.K. equities at Hargreaves Lansdown Stockbrokers, said. “For the C.E.O., the honeymoon period is over.”

The London-based company said it was on track to meet its target of doubling its investments in exploration and to increase the number of testing wells in areas including Brazil, Trinidad and Australia.

Pretax profit at the exploration and production unit rose to $6.6 billion in the second quarter from $6.2 billion in the same period last year. Refining and marketing’s pretax profit fell to $1.82 billion from $1.85 billion.

BP’s rival Royal Dutch Shell is to report earnings on Thursday.

Article source: http://feeds.nytimes.com/click.phdo?i=153371421349c3f95ec2c0e28af95591

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