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BP Q1 profits down as downstream unit struggles

BP Q1 profits down as downstream unit struggles

BP PLC said Tuesday that first-quarter net profit was down 18 percent largely due to a big drop in returns from its downstream business selling fuels, lubricants and fertilizer.
The company also announced that it intended to sell its stakes in several assets in the Gulf of Mexico which it regards as non-strategic.
For the three months ending March 31, BP said its net profit was $5.9 billion compared to $7.3 billion a year earlier.
Replacement cost profit, a closely watched industry measure, was down 12 percent at $4.9 billion from $5.6 billion a year earlier.
The big difference came in the downstream category, where underlying replacement cost profit fell 58 percent to $924 million compared to $2.2 billion a year earlier. Within downstream, the underlying profit in the fuels business was down 63 percent at $487 million.
Within downstream, the underlying profit in the fuels business was down 63 percent to $487 million because of a much weaker performance from supply and trading, unfavorable local crude differentials in Europe, weaker demand, and the temporary shutdown of the Cherry Point refinery in the U.S. state of Washington following a fire in February, BP said.
BP shares were down 2.1 percent at 435.5 pence in early trading.
Despite a downbeat quarter, CEO Bob Dudley said the company had made a good start on strategic priorities.
"During the quarter we gained access to significant new deep water and U.S. shale exploration acreage, our ongoing divestment program has reached $23 billion, and we have five deep water rigs at work in the Gulf of Mexico," Dudley said.
"This operational progress will underpin the financial momentum we expect to come through as we move into 2013 and 2014."
BP said it was putting its stake in several Gulf of Mexico assets up for sale, including the Marlin, Horn Mountain, Holstein, Ram Powell and Diana Hoover fields.
The company expects to have eight rigs working in the Gulf by the end of the year.
BP said it expected no change to the total cost of the Gulf of Mexico spill which it estimates at $37.2 billion. During the quarter, the company reached agreements to resolve the majority of private economic loss and medical claims.


Updated : 2021-08-01 08:30 GMT+08:00