BLOOMBERG: BP Third-Quarter Profit Rises 53% on Higher Prices: BP has overtaken Royal Dutch/Shell Group to become the second- largest oil company by market value, by making more than $100 billion of takeovers since 1999. Shell also lost its status after a January disclosure that it had overstated its oil and gas reserves for years.” (ShellNews.net)
Oct. 26 (Bloomberg) -- BP Plc, the world's second-largest publicly traded oil company, reported profit rose 53 percent in the third quarter because of record crude prices.
Net income increased to $3.46 billion, or 18 cents a share, from $2.26 billion, or 13 cents, a year ago, excluding costs of holding inventories, the London-based company said in a statement on the Regulatory News Service. Profit was $3.94 billion excluding amortization and other costs, compared with analyst estimates of $4.17 billion in a Bloomberg survey.
BP is the first of the world's largest oil companies to report a surge in profit in the third quarter because of this year's 68 percent rally in New York oil prices, to more than $55 a barrel. Exxon Mobil Corp. and Royal Dutch/Shell Group also post profits this week.
``The world economy's expansion has continued, despite patches of softer growth in the U.S. and Europe,'' BP Chief Executive John Browne said in the statement. ``Continued growth is expected across the world economy.''
Shares of BP yesterday declined 4.5 pence, or 0.8 percent, to 537.5 pence in London. The stock has gained 19 percent this year, outperforming a 2 percent advance in the FTSE 100 Index of the biggest U.K. companies.
Sales increased 25 percent to $73.9 billion from $59.2 billion in the recent quarter.
Earnings were hurt by $600 million of costs for environmental cleanups and the write-off of an Egyptian gas rig after a fire, BP said in an Oct. 4 preview of the period.
BP produced 3.91 million barrels of oil and gas a day, up from 3.5 million a year earlier, the statement said. It has a target to produce an average of more than 4 million barrels a day this year, which would be up 11 percent from 2003.
Analysts including J.J. Traynor at Deutsche Bank AG said before the results that BP may struggle to reach the target after Hurricane Ivan forced fields to shut down in the U.S. Gulf and the fire at an Egyptian gas platform. BP missed a target for growth of 5.5 percent in 2002, disappointing investors.
At BP, oil and gas production is rising because of the venture in Russia with OAO Tyumen Oil Co., TNK-BP, created in August 2003. While output is higher, BP receives a narrower margin on each barrel it pumps from Russia than in some parts of the world, such as the U.K. North Sea.
At BP's oil refineries, the company benefited from wider margins from making fuels than last year. BP owns or has stakes in 23 refineries worldwide, where it processes about 3.4 million barrels of crude a day, or enough to supply Germany.
BP has overtaken Royal Dutch/Shell Group to become the second- largest oil company by market value, by making more than $100 billion of takeovers since 1999. Shell also lost its status after a January disclosure that it had overstated its oil and gas reserves for years.
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