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BP profit slips as production slows

BP profit slips as production slows

BP (LON:BP.) expects to have eight rigs operating in the Gulf of Mexico before the end of the year, it said today.

The increasing presence in the Gulf reflects growing confidence at BP following the Macondo disaster in the Gulf in 2010 that killed eleven men and sparked the biggest oil spill in US history.

First quarter results today still showed the scars of that disaster, with a payment of $1.2 billion in the three months to March, though this was down from $2.8 billion in the comparable period a year ago.

Profits overall came in below expectations at US$4.93 billion down from US$5.61 billion, some six per cent below market estimates.

Production in the first quarter was also lower than expected at 2,452 million barrels of oil equivalent (mboe), six per cent lower than in the same period last year.

Both BP’s upstream and downstream activities saw lower profits in the three months.

Upstream profit fell to US$6.98 billion, down from US$7.4 billion with higher costs and the impact of BP’s divestment programme also taken a toll.

The company said today it is looking to sell its interests in various non-strategic assets in the Gulf of Mexico such as the Marlin, Horn Mountain, Holstein, Ram Powell and Diana Hoover fields.

During the quarter BP completed the US$1.2 billion sale of gas assets in Kansas and Perenco for US$400 million.

BP said it expects second quarter reported production to be lower and costs to be higher due to normal seasonal turnaround activity in the Gulf of Mexico at Atlantis, Mad Dog and Holstein.

The share price dipped 2.4 per cent to 434 pence in early trade.

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