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27/10/2009
BP Profits Cut By Half
One of the world's largest oil companies, BP has reported a huge drop in profits. While the 2009 third quarter profits are still more than £3bn, the figure is down a startling 50% on the same period last year.
It is believed that BP's profits were hit by falling oil and gas prices which, when juxtaposed with soaring crude oil prices this time last year - which pushed up the company's profit during the period - has seen a dramatic realignment this year.
The basic price of crude oil has dropped to half the all-time high of $147 a barrel this year, accounting for most of the profit freefall.
It was expected though and analysts are saying that the result was above expectations due to the success of BP's bigger than expected cost cuts.
They were predicting BP's replacement cost profits, used by analysts as a performance indicator for oil and gas groups, would come in at about £1.95bn for the quarter.
BP said unit production costs in the quarter were 18% lower than the third quarter of 2008.
The London-based company said oil and gas production averaged 3.917 million barrels of oil equivalent per day, up 7% compared to the same period in 2008.
BP reduced its headcount by 3,000 last year and is set to lose another 5,000 posts by the end of 2009.
Some of the improved cost savings have been due to currency exchange benefits, while the company has also been negotiating better terms with suppliers.
(BMcC/KMcA)
It is believed that BP's profits were hit by falling oil and gas prices which, when juxtaposed with soaring crude oil prices this time last year - which pushed up the company's profit during the period - has seen a dramatic realignment this year.
The basic price of crude oil has dropped to half the all-time high of $147 a barrel this year, accounting for most of the profit freefall.
It was expected though and analysts are saying that the result was above expectations due to the success of BP's bigger than expected cost cuts.
They were predicting BP's replacement cost profits, used by analysts as a performance indicator for oil and gas groups, would come in at about £1.95bn for the quarter.
BP said unit production costs in the quarter were 18% lower than the third quarter of 2008.
The London-based company said oil and gas production averaged 3.917 million barrels of oil equivalent per day, up 7% compared to the same period in 2008.
BP reduced its headcount by 3,000 last year and is set to lose another 5,000 posts by the end of 2009.
Some of the improved cost savings have been due to currency exchange benefits, while the company has also been negotiating better terms with suppliers.
(BMcC/KMcA)
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