UK: BP Reports Q1 Results

BP Reports Q1 Result

BP today reported its financial results for the first quarter of 2012.

Underlying replacement cost profit, adjusted for non-operating items and fair value accounting effects, was $4.8 billion for the quarter, compared to $5.0 billion in the previous quarter. The quarter’s result was impacted adversely by a $541 million consolidation adjustment in respect of unrealised profits in inventory held within the downstream business.

The company also said that it is making good progress towards the operational milestones that it expects to meet in 2012 – advancing the development of major new projects, continuing to gain promising new exploration access, and continuing its $38 billion divestment programme.

Group chief executive Bob Dudley said: “We have made a good start against our strategic priorities for 2012. During the quarter we gained access to significant new deepwater and US shale exploration acreage, our ongoing divestment programme has reached $23 billion, and we have five deepwater rigs at work in the Gulf of Mexico. This operational progress will underpin the financial momentum we expect to come through as we move into 2013 and 2014.”

Operating cash flow for the quarter was $3.4 billion, compared to $2.4 billion in the first quarter of 2011. The net cash outflow relating to the Gulf of Mexico oil spill was $1.2 billion for the quarter compared to $2.8 billion a year earlier. The quarter’s cash flow was adversely affected by an increase of around $3 billion in net working capital as inventory levels and prices increased. At the end of the quarter, gearing was 20.7 per cent and BP held just over $14 billion in cash. The company today announced a dividend of 8c per share for the first quarter of 2012.

Underlying replacement cost profit in the upstream improved compared to the previous quarter, due to the better environment, a higher contribution from gas marketing and trading and lower costs.

BP reported oil and gas production, excluding TNK-BP, in the first quarter of 2.45 million barrels of oil equivalent a day (boe/d). Reported production in the second quarter is expected to be lower, affected by the normal seasonal increase in turnaround activity. TNK-BP production was 1.02 million boe/d net to BP and in the quarter BP received a cash dividend from TNK-BP of $690 million.

Despite a challenging external environment, all three downstream businesses – fuels, lubricants and petrochemicals – delivered higher underlying replacement cost profits than in the previous quarter.

LNG World News Staff, May 1, 2012

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