Oil giant BP revealed a dip in profits yesterday as its commitment to sell off billions of pounds of assets in the wake of the Gulf of Mexico disaster hit production.
The group reported underlying replacement cost profits of $4.8 billion (€5.87bn) in the first quarter, compared with $4.98bn in the previous quarter and expectations of $5bn.
The group reported a 6% decline in oil and gas production to 2.45 million barrels of oil a day as itsprogramme of asset disposals since 2010 hit $23bn. BP sold businesses in the US, Canada and the North Sea in the period.
BP said the total charge taken to cover the impact of the fatal DeepwaterHorizon explosion in April 2010 remained at $37.2bn in the period.
Shares in BP fell nearly 3% after the update.
Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said: “For BP, the Gulf of Mexico accident continues to overhang, with asset sales impacting production.
“On the upside, planned asset sales are 60% complete, new exploration projects continue to be pursued, while the costs, at least for now, for the Macondo accident are reducing.”
BP said it is making good progress towards the “operational milestones” that it expects to meet this year, including moves towards its pledge to sell $38bn of assets.
BP completed the sale of gas assets in Kansas,Canadian natural gas liquids business and its Southern North Sea gas assets in the period.
The group is now looking to sell “non-strategic” assets in the Gulf of Mexico, including the Marlin, Horn Mountain, Holstein, Ram Powell and Diana Hoover fields.
BP entered into concessions with oil firm Petrobras in Brazil in the period, as well as deepening its interests in offshore Namibia and being awarded three new blocks offshore Uruguay.
BP said it remains on track to start up six newmajor upstream projects in 2012.
The oil giant’s payments into Gulf of Mexico oil disaster trust total $16.6bn and it expects its payments to end in the fourth quarter of this year.
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