Home world BP slips into the red as hurricane impact and lower prices hit bottom line


BP slips into the red as hurricane impact and lower prices hit bottom line

by ace
BP's Chief Executive Bob Dudley speaks to the media after year-end results were announced at the energy company's headquarters in London February 1, 2011

BP dropped to a loss of $ 351 million in the third quarter after lower oil and gas prices, a major hurricane and large one-off charges related to the sale of parts of the company took their toll.

The loss in the three months to the end of September compares with a profit of $ 3.09 billion (£ 2.37 billion) in the same period last year.

Excluding one-off charges, profits still fell more than 40 percent, although performance exceeded market expectations.

Shares fell about 1% at the start of trading.

Chief Executive Bob Dudley said: "BP delivered strong operating cash flow and underlying earnings in a quarter that saw lower oil and gas prices and significant hurricane impacts."

The UK-based oil giant – whose shares are a staple of many pension funds – said production levels were hit by the impact of Hurricane Barry on operations in the Gulf of Mexico.

Lower prices also affected, with Brent oil barrel at $ 62 in the period, compared to $ 69 in the second quarter and $ 75 in the third quarter last year.

Hurricane Barry affected Gulf of Mexico oil production

Meanwhile, BP has assumed an accounting charge of $ 3.32 billion (£ 2.55 billion), largely related to the disposal of US gas assets and the sale of its Alaska business.

The group had already warned investors earlier this month that it expected to receive a multi-billion dollar blow to the deals.

The results came after BP announced that Dudley would step down as chief executive next year after a decade in charge.

He will be replaced by Bernard Looney, who currently heads the company's upstream division – covering exploration and production.

CMC Markets chief market analyst Michael Hewson said: "Today's Q3 figures are not expected to come close to levels seen in Q2 results given the fall in oil prices since then.

"However, they still show a more agile and more efficient company than it was a decade ago."


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