Oil giant BP Plc (BP,BP.L, BP_UN.TO) Tuesday reported a significant increase in first-quarter profit, helped by a hefty gain from the sale of its interest in TNK-BP to Rosneft on March 21. However, underlying replacement cost profit as well as total oil and gas production declined in the quarter.
Bob Dudley, BP Group Chief Executive, said: "These strong first quarter results demonstrate the progress BP is making in delivering the performance milestones that support our 10-point plan and underpin our commitment to material operating cash flow growth by 2014.''
Profit attributable to BP shareholders surged to $16.86 billion from $5.77 billion. Earnings per share increased to 87.61 cents from 29.97 cents.
BP completed the sale of its interest in TNK-BP to Rosneft on March 21, for a total consideration of $27.5 billion in cash and Rosneft shares. The gain on the disposal was $15.5 billion, of which $12.5 billion was recognised in the first quarter.
Adjusting for inventory holding gains or losses, replacement cost or RC profit more than tripled to $16.6 billion and profit before taxation more than doubled to $19.73 billion. Underlying replacement cost profit fell to $4.2 billion from $4.7 billion.
Total revenues and other income increased to $107.21 billion from $97.42 billion in the prior year.
Sales and other operating revenues slid one percent to $94.11 billion.
Reported production of oil and gas excluding TNK-BP and Rosneft fell 5 percent to 2.33 million barrels of oil equivalent a day, primarily due to divestments.
Upstream revenues fell 6 percent to $18.22 billion, but underlying production of oil and gas rose 2 percent from last year.
Downstream revenues rose marginally to $86.78 billion and the business benefited from a strong contribution from supply and trading operations. BP said good operational performance in the fuels business helped capture the benefits of the favourable refining environment, particularly in the US Mid-West.
Geographically, revenues rose slightly in the U.S. to $35.28 billion while Non-US revenues slid 3 percent to $68.32 billion.
BP expects reported production in the second quarter to be lower as a result of planned seasonal turnaround activity concentrated on higher-margin assets in the Gulf of Mexico and the North Sea, along with the impact of divestments.
The energy giant said it remains on track for the start-up of four new upstream projects in 2013. The company expects to take five final investment decisions during the year.
Updating on the actions after the Gulf of Mexico oil spill, BP said $778 million was paid out of the Deepwater Horizon Oil Spill Trust and qualified settlement funds toward provisions in the first quarter. The pre-tax charge recognized to date related to the disaster stands at $42.2 billion.
Further, BP today announced a dividend of 9 cents per ordinary share, which is expected to be paid in June.
BP.L is currently up 2.5 percent in early morning trading at 468.35 pence.
by RTT Staff Writer
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