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Wed, Apr 28, 2010 - Page 10 News List

BP first-quarter profits up 135% on higher oil price


BP PLC reported a 135 percent jump in first-quarter net profits, compared with the same period last year, beating all forecasts thanks to higher crude and gas prices.

BP said replacement cost net profit, which strips out unrealized gains related to rises in the value of inventories, was US$5.65 billion in the quarter, after Brent crude rose 72 percent to an average of more than US$76 per barrel.

One dealer said the stock was likely to open up 2 to 3 percent on the results.

BP managed to outperform expectations partly because it also managed to achieve much higher prices for its gas, despite a drop in European benchmark gas prices compared with the first three months of last year.

Higher throughput at its refining unit also allowed the company to outperform expectations in this business, although a halving of margins compared with the first quarter of last year meant the overall result was sharply lower.

The world’s third-largest Western oil major by market value said oil and gas production was broadly flat compared with the same period last year, at 4.01 million barrels of oil equivalent per day — just ahead of forecasts.

BP said it had agreed to buy a 15.7 percent interest in Valhall and a 25 percent interest in Hod, both located in the southern part of the Norwegian continental shelf, from France’s Total for US$991 million in cash.

It was the latest in a string of acquisitions by the oil major in recent months, after it agreed to pay Devon Energy US$7 billion for assets in Brazil, Azerbaijan and the Gulf of Mexico.

The London-based company also said it would pay US$900 million for a 75 percent stake in the oil sands assets of unlisted Canadian company Value Creation.

The tie-up was announced last month, but no details on price or stake size were revealed then.

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