BP fails to hit oil production target

Oil giant BP said today that its oil production in 2004 was set to be just short of target, despite boosting output by 10%.

The company said it expected to have produced 3.995 billion barrels of oil equivalent per day last year, up a tenth on 2003, but lower than the four billion barrels it had aimed for.

BP said its fourth quarter net profits would take a hit of about $2.3bn (£1.2bn/€1.7bn) from charges on the value of its marketing and petrochemical assets.

It also said its costs would be about $250m (£133m/€188.8m) more than in the third quarter of last year due to higher exploration write-offs, repairs resulting from Hurricane Ivan in the United States, and a blow-out at partner-operated Tesmah in Egypt and other items.

But experts said the charges had been expected and investors reacted neutrally, with the group’s shares rising 0.5p to 508.5p in morning trading.

Analysts are forecasting profits of $16bn (£8.5bn/€12bn) in 2004 - the highest figure ever recorded by a UK company – as BP benefits from sky-high oil prices.