Refinery hitchesslash BP profits
OIL giant BP suffered a 45% fall in profits today as production problems continued to blight the business.
The firm’s third-quarter profits of £1.9 billion came in below analysts’ expectations, after ongoing problems at its US refineries.
The company added that third-quarter production levels slipped 4% on last year, after being hit by factors including damage to its Central Area Transmission System (CATS) pipeline in the North Sea - which comes ashore on Teesside.
The City had been braced for the poor results after new chief executive Tony Hayward reportedly described BP’s operating performance as “dreadful” last month.
Operational difficulties at its Whiting refinery - as well as higher maintenance and repair charges - saw profits from BP’s refining and marketing division slump from £736.5m to just £184m.
Despite the poor results, BP hopes to have both its Whiting and Texas City refineries running at full capacity in the first half of next year.
The refining operation’s performance also suffered lower demand for heating oil in Europe due to milder weather, which hit sales slightly.
BP - the world’s third largest oil company - saw a 36% fall in profits at its exploration and production division compared with the same period last year.
Lower gas production and higher maintenance costs added to the profits pressure while last year’s figures were also boosted by asset sales.
But the firm has stuck by full-year production forecasts, saying levels would still be in line with the 3.8 million to 3.9 million barrels of oil equivalent a day guidance given earlier this year.
It added that major exploration projects were “progressing well” and has embarked on the commissioning the Atlantis field in the Gulf of Mexico.
For the nine months of the year so far, BP’s profits are down 22% to £7 bn. The company has around 97,000 staff and a presence in more than 100 countries.
