BP Amoco first quarter profits surge

by The Associated Press

BP Amoco PLC credited higher oil prices and fatter refining profits for a 256 percent rise in its first-quarter operating profit to $2.71 billion.

The results for the oil conglomerate do not include exceptional one-time items. BP Amoco earned $761 million during the same period last year.

The results were near the top end of what many analysts had forecast.

BP Amoco completed its acquisition of Los Angeles-based Atlantic Richfield Co. in April. The company is now positioned “to deliver substantial benefits from further cost reductions and margin improvement from new business,” while also maintaining the competitiveness of its existing operations, chief executive John Browne said May 9.

Operating profit for exploration and production, BP Amoco’s biggest line of business, more than quadrupled in the three months ended March 31 to $3.21 billion from $750 million during the first three months of 1999.

The company benefited during that period from the soaring price for crude. It received an average of $24.75 per barrel in the last quarter, compared to $10.45 a year before.

Cost savings and lower exploration expense also helped, the company said.

Operating profit for BP Amoco’s refining and marketing business rose 86 percent to $674 million, from $346 million a year ago. Improved profit margins, particularly in the United States, led the improvement, BP Amoco said.

Higher volumes and cost cutting helped the company’s chemicals business improve its operating profit to $259 million, up 26 percent from its year-ago level of $206 million.

Browne described the outlook for BP Amoco as “broadly positive.” Continued cost cutting and increased investment should lead to further growth, he said.

In trading, BP Amoco shares fell 3.2 percent from May 8 to close at 577.5 pence ($8.84) each, on a bout of profit-taking after the company disclosed the results.