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BP profits slip 46 percent; London giant follows industry trend
Allen Baker PNA Contributing Writer
BP p.l.c reported sharply lower profits for the fourth quarter, in line with the industry pattern as prices pushed down earnings. London-based BP said its pro forma earnings for the quarter totaled $2.2 billion, down 46 percent from the figure a year earlier. By comparison, fellow oil giant ExxonMobil showed a 49 percent profit decline.
“General economic slowdown, and a sharp fall in oil and gas prices, certainly made for tough going,” commented BP’s chief executive, John Browne.
For the year, BP had profits of $13.2 billion, down 7 percent from 2000’s $14.2 billion. That came despite an increase of nearly $2.5 billion in capital spending, for a total of $8.9 billion invested.
BP did lift more oil and gas in the quarter than a year ago.
Overall, 2001 production was up 5.5 percent from a year earlier (2 percent after adjusting for acquisitions), with the fourth-quarter results showing a 4 percent gain after adjusting for properties that were bought or sold.
Average daily liquids flow in the fourth quarter was 2,017,000 barrels, up 4 percent from a year ago and a 7 percent jump from the third quarter, when BP pumped 1,883,000 barrels each day.
Liquids production had been declining, but new oil from the offshore Northstar oil field in Alaska, as well as Girassol in Angola and Qinghangdao in China, helped the results. U.S. production was 3,621,000 barrels a day, up from 3,577,000 in the third quarter and 3,403,000 barrels a year ago. Gas production up 13 percent Gas production worldwide was 19,727 million cubic feet a day, up 13 percent from a year ago and 7 percent above the third quarter figure. U.S. production was down slightly, however, 8,094,000 million cubic feet daily, a decline of 1 percent from a year ago but a drop of 7 percent from the third quarter.
Overall, exploration and production activities generated $2.4 billion in pro forma earnings for the quarter, just half of the figure a year ago.
Lower prices were the culprit, as they were across the industry. Crude brought an average of $17.72 a barrel, down 37 percent from a year earlier. Gas sales grossed $2.28 per thousand cubic feet, down 39 percent.
Refining and marketing added $392 million in earnings for the quarter on a replacement cost basis, about half the $792 million brought in a year ago. That segment showed a profit of $1 billion in the third quarter before adjustments.
Refinery throughput was 2,847,000 barrels daily, an 8 percent decline from a year earlier as the company sold refineries in North Dakota and Utah to Tesoro Petroleum.
Operating loss from the chemicals business, on a replacement cost basis, came to $67 million, an improvement from the $82 million loss in the 2000 fourth quarter, but not from the profits of $105 million from that segment in the third quarter of this year. No big changes in 2002 As for 2002, chief executive Browne sees no big changes: “Demand for oil and gas is weaker than last year because of the global economy, a mild U.S. winter and reduced jet fuel demand following the events of 11 September,” he noted in a statement.
“The crude oil market looks broadly balanced for the first half of 2002, if OPEC’s latest round of quota reductions offset current demand weakness. Additional OPEC oil may be required in the second half of the year to balance the market if demand improves in line with an economic recovery,” Browne said.
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