BP profits soar 42 percent; Q4 figure disappoints
10 February 2004
Agence France Presse
LONDON : British energy giant BP reported record 2003 profits which rose 42 percent helped by high oil prices and a multi-billion dollar joint venture with Russian firm TNK.
But a one-percent rise in fourth-quarter profits missed analyst expectations, fanning investors caution towards the oil sector in the wake of disappointing results from Anglo-Dutch rival Royal Dutch/Shell last week.
BP's profits, excluding one-off items, acquisition costs and changes in the value of the company's oil inventories, rose to 12.38 billion dollars (9.69 billion euros) last year from 8.72 billion in 2002.
In the fourth quarter, the figure increased by a more modest one percent to 2.67 billion dollars, below consensus forecasts of 3.01 billion.
BP shares lost 3.4 percent to 412.25 pence in early deals.
The increased earnings reflected the impact of higher oil and gas prices and a full quarter of profits from TNK-BP, the 7.7-billion-dollar joint venture
sealed last year to create Russia's third-largest oil producer.
"Crude oil prices continued to strengthen in the fourth quarter, adding around one dollar per barrel compared with the third quarter to average 29.43 dollars," said BP chief executive John Browne.
"Underlying oil demand appears to be strong on the back of global economic recovery and the ongoing economic boom in China, and has been growing faster than oil supply outside OPEC," he said in a statement accompanying the results.
The Organisation of Petroleum Exporting Countries appeared to have increased its production modestly in the fourth quarter, despite the 900,000 barrels per day quota cut that it introduced from November 1, Browne added.
"We expect that future oil prices will largely depend on OPECs ability to realign production in line with seasonal requirements."
Browne gave investors some reason to cheer as he announced BP will resume its share buyback programme.
"Our
focus is now on delivering the growth in free cash flow of which we believe our portfolio is capable. We intend to restart our share buyback programme this quarter, subject to market conditions," he said.