BP's second quarter profit has come in at $3.7 billion, versus last year's $5.7 billion, as weak oil and gas prices took a toll.
Bob Dudley, group chief executive, said he recognised the poor earnings report and warned that as well as sector-wide issues hitting BP, the company's bottom line was impacted by its turnaround project launched after the Gulf of Mexico oil disaster.
'We recognise this was a weak earnings quarter, driven by a combination of factors affecting both the sector and BP specifically. The effects of price movements have impacted our earnings in the quarter. Our extensive turnaround and maintenance programme, which will continue into the third quarter, is also affecting some aspects of our near term results.
'All of this will take time, but it is important investment that will enhance safety and reliability for the long term,' Dudley (pictured) said.
Compared to the previous quarter, BP told investors that its underlying results were depressed by weaker oil and US gas prices, together with reductions in output due to extensive planned maintenance, particularly affecting high-margin production from the Gulf of Mexico, and lower net income from TNK-BP. This was partly offset by a beneficial consolidation adjustment to unrealised profit in inventory.
BP's share of net income from TNK-BP was $700 million lower than the first quarter, driven by the impact of the rapid fall in oil prices amplified by the lag in Russian oil export duty, which is based on earlier higher oil prices. At current Urals prices, net income in the third quarter is expected to show some positive reversal of the duty lag.
At the time, Citywire A-rated Dobell had 0.5% of his £7.9 billion fund in the oil giant. At a breakfast briefing he argued that considering BP was inherently profitable when oil traded at $60 a barrel, the petroleum giant should be doing much better with Brent crude trading at $111, even taking into account its huge difficulties following the 2010 Gulf of Mexico oil spill.
Artemis' Frost, meanwhile, said the company should shrink to become more profitable.