BP profit rises on higher oil prices

2. February. 2010
Reuters

Oil major BP reported a lower than forecast 33 percent rise in fourth-quarter replacement cost profit as refining margins were squeezed and warned that an operational turnaround could slow this year.

 Europe's largest oil company by market capitalisation said on Tuesday it had addressed a number of areas of investor concern in 2009, lifting production of oil and gas 4 percent, bringing its refineries back up to full capacity and finding more oil than it produced in the year.

 However, Chief Executive Tony Hayward said output was likely to fall in 2010 and refining margins would stay depressed.

 Hayward added that while oil prices, whose recovery was the main driver of BP's quarterly earnings rise, were well supported by OPEC, gas prices would remain volatile.
 One analyst said rising operating costs would mean the $4 billion (2.5 billion pounds) of savings BP achieved in 2009 were unlikely to be repeated.

 BP's experience reflects the recovery in major economies in the United States and Europe, which would be "slow and gradual," the CEO said.

 BP shares traded down 4.1 percent at 570-1/2 pence, lagging a 0.4 percent drop in the DJ Stoxx European oil and gas sector index.

 BP outperformed forecasts by about 50 percent in the third quarter, and the market's disappointment reflected high expectations, as the results were "comparatively strong," Colin Smith oil, analyst at ICAP said.