BP reports quarterly profit of $5.3bn

BP

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BP made profits of $5.3bn (£3.2bn) in the three months to 30 June as higher oil prices offset lower production.

The results were worse than expected, sending BP's share price down during morning trading.

The replacement cost profit compares with a loss of $17.0bn in the same quarter of 2010, when the company took a big charge relating to the oil spill in the Gulf of Mexico.

In the first quarter of 2011, BP made a profit of $5.5bn.

BP has paid $6.8bn in damages to firms, individuals and government departments since the oil spill.

Falling production

BP's oil production was 11% down on the same period of 2010 due to the suspension of drilling in the Gulf of Mexico, maintenance work on some wells and the sell off of some operations.

The effects of the lower production were partially offset by the higher oil price, which was inflated by political unrest in oil-producing countries such as Libya.

BP has sold $25bn worth of assets in the US, Argentina, Egypt, Venezuela, Vietnam and Colombia - partly to pay for the clean-up operation in the Gulf.

Start Quote

We are committed to seeing the true value of the business more strongly reflected in the share price”

End Quote Bob Dudley BP, chief executive

The oil firm's chief executive, Bob Dudley has been criticised by some investors for failing to increase production.

In May BP abandoned a proposed deal with Russian's Rosneft to exploit oil reserves in the Arctic.

"Other companies have clearly re-defined their strategies over the last 12 to 24 months," said Dougie Youngson an oil analyst at Arbuthnot.

"Exxonmobil continues to build it's shale gas business in the US and Shell is focussed on mega gas projects. What is BP doing?"

Investors have also suggested that the share price has not recovered sufficiently from the Gulf spill.

"BP is a company that is changing rapidly. We are committed to seeing the true value of the business more strongly reflected in the share price," Mr Dudley told investors.

Continuing clean-up

An explosion at the Deepwater Horizon rig in April last year killed 11 people and caused a massive oil leak.

In an update on the clean-up operation, BP said it had continued limited work to clean some marshes and barrier islands, having finished its work on the coastline in the previous three months.

The company is pursuing some of the other companies involved with the Macondo oil well to try to secure contributions to the amounts it is having to pay out in damages and clean-up costs.

In April, BP sued Transocean, the owner of the oil rig that exploded, for $40bn in damages.

It has also sued Cameron International, the company that supplied the blowout preventer, alleging the device failed to stop the huge oil spill that followed the explosion.

In May, BP reached a settlement with MOEX Offshore, one of the owners of the Macondo well, which paid $1.065bn towards the trust that is paying out damages.

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