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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.

Image:
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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