• Wednesday, 16 May, 2012

BP production down but profits up

BP: The company has made further moves to consolidate following the Deepwater Horizon incident.

Andrew Hobbs , Andrew Hobbs , Andrew Hobbs , Andrew Hobbs , Andrew Hobbs

 26 July 2011 06:55 GMT

The second quarter profits of UK supermajor BP were up 13% on the previous year to $5.6 billion on the back of higher commodity prices as the company moves to consolidate following the Deepwater Horizon incident.





BP said the profit was partially offset by lower production and higher costs which it said were temporary, brought on by increased levels of turnarounds and maintenance, affecting areas such as the Gulf of Mexico and North Sea in particular.

BP chief executive Bob Dudley said in an announcement to the London Stock Exchange that these effects were expected to continue into the third quarter, saying they were “a near term effect”.

Dudley expected “to see momentum returning as we enter 2012,” the company said.

Oil and gas production in the second quarter was 11% lower than during the same period in 2010, falling to 3.43 million barrels of oil a day on the back of a suspension of drilling in the Gulf of Mexico as well as BP’s continuing divestment programme.

Full year production is expected to be in line with the guidance of 3.4 million bpd given in February, with the company saying its consolidation process was having a near-term effect on volumes.

The company had agreements in place to dispose of assets worth about $25 billion, from its target of $30 billion, while progress was being made on plans to sell the Texas City refinery and the southern part of the West Coast fuels value chain, including the Carson refinery, by the end of 2012.

"We expect the momentum of our recovery to build into 2012 and 2013 as new projects come on stream, particularly in higher-margin areas; as we complete current turnaround activity; as we return to work in the Gulf of Mexico; and as uncertainties reduce,” he said.

The company expected nine new projects in places such as Angola, the North Sea and the Gulf of Mexico to come online during the next two years, as the company announced it was on track to increase the number of wells to test new plays in Brazil, Trinidad, and Australia.

BP had secured new acreage awards in Australia, Indonesia, Azerbaijan, the UK, the South China Sea and Trinidad during the year so far, with acquisitions in Brazil and a deal with Reliance Industries in India boosting company holdings.

"2011 has been an unusually good year for BP in gaining access to new opportunities in the upstream," Dudley said.

Meanwhile, BP was working to implement the recommendations of a company report into the Deepwater Horizon incident, aiming to manage and reduce operational risk.

The company had paid out about $6.8 billion in claims and government payments to fund economic and environmental restoration, with decontamination of all vessels and most of the shoreline cleanup complete.

User

Become an Upstream member!

Membership includes a subscription to our weekly newspaper providing in-depth news from the energy industry, plus full-access to this site and its archives. Still not convinced? Try our free trial.

Already a member?

Login

Upstream share price index

Recruitment
See all available positions
Events
2
06.05.2012

06

May

06.05.2012 -  20th Middle East Petroleum & Gas Conference (MPGC 2012)

MPGC 2012 will be held from 6-8 May and is returning to Bahrain again, on the occasion of its 20th Anniversary. The conference will be held under the Patronage of His Excellency Dr. Abdul Hussain bin Ali Mirza, Minister of Energy-Chairman of National Oil & Gas Authority, Kingdom of Bahrain and with National Oil & Gas Authority (NOGA) & The Bahrain Petroleum Company (Bapco) as hosts.
The Conference Connection Inc
Read more »
07.05.2012

07

May

07.05.2012 -  20th Middle East Petroleum & Gas Conference (MPGC 2012)

MPGC 2012 will be held from 6-8 May and is returning to Bahrain again, on the occasion of its 20th Anniversary. The conference will be held under the Patronage of His Excellency Dr. Abdul Hussain bin Ali Mirza, Minister of Energy-Chairman of National Oil & Gas Authority, Kingdom of Bahrain and with National Oil & Gas Authority (NOGA) & The Bahrain Petroleum Company (Bapco) as hosts.
The Conference Connection Inc
Read more »
08.05.2012

08

May

08.05.2012 -  20th Middle East Petroleum & Gas Conference (MPGC 2012)

MPGC 2012 will be held from 6-8 May and is returning to Bahrain again, on the occasion of its 20th Anniversary. The conference will be held under the Patronage of His Excellency Dr. Abdul Hussain bin Ali Mirza, Minister of Energy-Chairman of National Oil & Gas Authority, Kingdom of Bahrain and with National Oil & Gas Authority (NOGA) & The Bahrain Petroleum Company (Bapco) as hosts.
The Conference Connection Inc
Read more »