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BP profits drop 20% as falling oil and gas prices take their toll
08 November 2001 , 11:25443
Tumbling oil and gas prices put the skids under BP in the third quarter of this year, leaving profits for the period some 20% lower than a year ago.
The company yesterday reported a surplus of $3.049bn (ё2bn) for the three months to the end of September - down from $3.796bn in the same quarter a year ago - but is still showing record returns of almost $11bn for the year to date.
With oil prices having fallen more than 30% to a two-year low since early September, BP could do with some positive news from next week's Opec meeting.
But directors yesterday refused to be drawn on the outcome they would like to see.
The cartel's general secretary has indicated that pro duction cuts of more than 1m barrels a day could be made by Opec members in an attempt to prop up prices.
BP chief executive Lord Browne said the critical issue was whether Opec producers would curb output sufficiently to pull the price of crude back within its target range. He said that while Opec continued to produce beyond its quotas, oil prices had softened since September 11 in the face of weakened demand, particularly for aviation fuel.
BP's latest figures - which fell in the middle of earlier stock market forecasts - show a 26% decline in exploration and production profits where results were "significantly affected" by lower prices for both oil and gas.
Total production was about 3% higher than in the same period last year. But the company received an average of $23.08 a barrel for its oil output during the quarter - 17% less than a year ago. Natural gas returns fell by a similar percentage.
BP's chemicals interests continue to be affected by weakening demand and excess capacity, but refining and marketing notched up a 2% improvement thanks to higher retail margins and volumes. The company, which like other petrol retailers has come under fire over petrol prices in the past, said retail margins had benefited from the falling price of crude.
Lord Browne said the group remained on track to meet its longer-term targets. "Despite global uncertainty and weaker prices pretty much across the board, we've delivered a strong quarter's performance," he told shareholders yesterday. He said production growth remained on target.
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