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BP posts flagging net profit

28 July 2009 13:18 (UTC +04:00)

Baku - APA-Economics. British energy major BP said Tuesday that second-quarter net profit slumped 53 percent to 4.39 billion dollars (3.07 billion euros) due to falling oil prices and despite higher output.
Stripping out oil inventories held, net profit was also down 53 percent to 3.14 billion dollars in the three months to the end of June, BP said in a results statement.
That compared with 6.75 billion dollars in the same period of 2008 when oil had struck record highs above 147 dollars per barrel. Prices have since tumbled in the global slowdown but in recent weeks have come of their lows to trade close to 69 dollars.
Daily production climbed four percent to 4.005 million barrels of oil and gas in the second quarter, due largely to the startup of the 300,000-barrel-per-day Thunder Horse field in the Gulf of Mexico.
Group revenues fell to 56.56 billion dollars in the second quarter from 110.98 billion dollars.
BP said it has already achieved its goal of cutting costs by 2.0 billion dollars in 2009 -- and expected to slash another 1.0 billion dollars before the end of the year.
Chief Executive Tony Hayward said the group was delivering in very tough conditions.
"We are in turbulent times, volatile and uncertain. But we continue to steer a steady course through choppy waters," Hayward said.
"Despite the current climate, we are making good progress in growing our upstream (operations), turning around our downstream and driving cost-efficiency across the group."
Capital spending in the three months to June was 4.8 billion dollars and 9.4 billion dollars for the six month period, and should be less than 20 billion dollars for the full year, according to BP.
Hayward said a recovery in global energy demand would be sluggish.
"The overall picture is of energy demand now stabilising following significant falls in the first half of the year," Hayward said.
"We see little evidence of any growth in demand and expect the recovery to be long and drawn out."
In late morning trade, BP shares were down 1.26 percent to 512.45 pence on London’s FTSE 100 index of leading shares, which was 0.10 percent higher at 3,374.93 points.
"BP may not be able to control the price of oil but their measures to streamline the business and reduce costs shows the board is in tune with the ebbs and flows of the market," said trader Manoj Ladwa at ETX Capital.
"Looking forward, the price of the stock is likely to be limited on the upside as demand for crude oil remains unpredictable."
At BP, where Hayward has been in charge since 2007, more than 5,000 jobs are being slashed in a bid to reduce costs.
The group’s Anglo-Dutch rival Royal Dutch Shell publishes its second quarter results on Thursday. Source: AFP