Profit forecast missed but BP has good year

Feb 3 2010 by Iain Laing, The Journal

OIL firm BP said it has seen a very good 2009 despite missing City profits forecasts for the last three months of the year.

The UK firm, which saw annual profits slump by almost half amid lower oil prices, said its final quarter surplus rose 33% to £2.16bn.

The firm has seen a jump in production over the year, but its refining business was hit by extremely weak trading conditions, particularly in the last months of 2009.

Chief executive Tony Hayward said the firm had exceeded many of its own expectations during the year, despite the global economic downturn.

He said recovery in the major economies of the US and Europe was expected to be slow and gradual.

While he saw stability in the oil market because of the actions of cartel Opec, he warned that gas markets were predicted to remain volatile and refining margins would remain depressed for the foreseeable future.

BP reported a full-year surplus of £8.75bn in the year to December 31 – down 45% on 2008.

Oil prices slumped in 2009 from their peak of US$147 a barrel during the previous year and BP said a lack of a significant hurricane season helped a 4% growth in production in 2009.

As a result it expects 2010 to be at a lower level, but the firm said its long-term production guidance was unchanged at between 1% and 2%.

The increased production was particularly helped by the mild season in the Gulf of Mexico, resulting in relatively few disruptions to oil and gas production.

The firm’s major new Thunder Horse field saw its first full year of activity in the region in 2009.

During last year, BP said it gained access to significant new production sites, such as the Rumaila oilfield in Iraq, which it said was one of the great oilfields in the world.