BP posts record first-quarter profits

BP's first-quarter results have revealed record profits, as the war in Iraq and political instability in two other oil producing countries forced up oil prices.

The results showed a $3.73 billion profit in three months, exceeding the previous best quarterly profit posted in 2001.

Aiding BP’s performance were the Iraqi war, where reduced production has initially been diverted to the internal market, continued political tension in Venezuela, where a strike has halted oil exports, and serious civil unrest in Nigeria that stopped oil production.

The resulting boost to BP’s cash flow resulted in a 136% hike in profits on the corresponding period last year up from $1.58 billion. A figure that saw BP raking in around $41 million a day in the three-month period to March this year.

The return on capital investment was 20%, up from 10% a year ago.

BP Group Chief Executive, Lord Browne, said: "This is a strong quarterly result. Strategy continues to be implemented with growth on track and strong performance delivery. Cash flow is robust, providing the opportunity for a good shareholder return through dividends and share buybacks."

Although the group’s chemicals division result was flat compared with last quarter, this was despite higher volumes and lower costs that offset weaker margins due to higher feedstock costs, particularly in Europe.

BP also announced increased share dividends at 6.25 cents per share compared with 5.75 cents per share a year ago - an increase of 8.7%. In sterling terms, however, the quarterly dividend is 3.947 pence per share compared with 4.051 pence per share a year ago, a decrease of 2.6%.

The company repurchased 155 million of its own shares during the quarter, at a cost of $999 million.

(SP)