BP reports lower profit for Q1 after oil field disposals to pay for Gulf of Mexico disaster
May 01, 2012 (Menafn - M2 EQUITYBITES via COMTEX) --Oil giant BP BP announced today that its profit fell in the first quarter of 2012 after the company was forced to sell oil fields to pay for the Deepwater Horizon disaster in the Gulf of Mexico, resulting in lower production.
BP's replacement cost net profit, which excludes the effect of oil and other price movements, amounted to USD4.9bn in the first three months of the year, down from USD5.6bn a year ago.
Oil and gas production by the company, excluding its Russian joint venture TNK-BP, declined 6% to 2.45 million barrels of oil equivalent a day (boe/d) in the first quarter and output is expected to continue falling in the second quarter. Production from TNK-BP was 1.02 million boe/d net to BP and in the quarter BP received a cash dividend from TNK-BP of USD690m.
The company noted that all three of its downstream businesses - fuels, lubricants and petrochemicals - achieved higher underlying replacement cost profits than in the previous quarter. Results were impacted adversely by a USD541m consolidation adjustment in respect of unrealised profits in inventory held within the downstream business.
Progress has been made on BP's USD38bn divestment programme during the first quarter, with the USD1.2bn sale of gas assets in Kansas in March, followed by the USD1.7bn sale of the Canadian natural gas liquids business in April. The company also reached an agreement in March to sell its Southern North Sea gas assets to Perenco for USD400m.
Since the start of 2010 BP has announced divestments totalling approximately USD23bn and the company announced today that it has decided to sell its interests in certain non-strategic assets in the Gulf of Mexico, including the Marlin, Horn Mountain, Holstein, Ram Powell and Diana Hoover fields.
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