€44m-a-day BP set for record profits

Record profits for a UK company could be set by BP this year after the oil giant revealed today it was taking more than £30m (€44.3m) every day.

BP said rocketing oil prices between June and September meant it was able to post quarterly profits of $4.4bn (€3.7bn) – despite hurricane damage and disruption to rigs and refineries in United States.

This meant the surplus for the first nine months of this year was up 25% at $14.88bn (€12.3bn) – close to its annual profits of $15.4bn (€12.8bn) in 2004.

Analysts expect BP will bank more than £11bn (€16.2bn) in profits this year and a bumper haul is also expected from major rival Royal Dutch Shell, which is due to report on its third-quarter performance on Thursday.

Oil prices are currently a third higher than a year ago and BP scotched hopes of households and motorists that they will spiral lower over the next few months.

Chief executive Lord Browne said prices would remain “well-supported” over winter even though the industry is wrestling with a loss of refining capacity at present.

British motorists who saw pump prices for unleaded climb above £1 (€1.50) per litre for the first time this summer were assured that BP was sharing some of their pain, with margins at its filling stations around the world “significantly lower” than a year before.

BP said it had chosen to absorb some of the blow from higher wholesale fuel prices rather than pass them on in full to its customers.

In addition to the rising cost of crude, BP said its record third-quarter performance was also down to higher gas prices and better refining margins.

But its results would have been better had it not lost profits after hurricanes Katrina and Rita shut down rigs and refineries in the Gulf of Mexico and left many in need of repairs.

Production for the quarter was 2% lower than a year ago because of storm damage in the Gulf and more platforms being shut down in the North Sea for maintenance than expected.

As Hurricane Rita approached the Gulf coast, BP announced the complete closure of its refinery at Texas City where capacity was cut by a fatal fire in March.

BP also disclosed that the cost of repairing damage caused by Hurricane Dennis to its Thunder Horse platform totalled $107m (€88.8m) in the quarter and production was unlikely to restart before the second half of next year.

“The recent hurricanes in the United States have impacted our results,” Lord Browne said.

“However, underlying performance is strong, amplified by high but volatile prices of oil, gas and products.”

Lord Browne said refining capacity had still not returned to normal since the hurricanes struck, increasing the vulnerability of the industry to fresh disruptions or an abnormally cold winter.

Profits from refining and marketing in the third quarter hit a record $1.86bn (€1.5bn), while the nine-month surplus was up 17% on a year ago at $4.57bn (€3.8bn).

Today’s results come a fortnight after BP scrapped a stock market flotation for its Innovene petrochemicals business and sold it for £5bn (€7.4bn) to UK chemicals group Ineos.