Royal Dutch Shell Plc  .com Rotating Header Image

International Herald Tribune: Russia aids 35% profit rise at BP

International Herald Tribune: Russia aids 35% profit rise at BP

Bloomberg News Tuesday, July 27, 2004

Higher prices also lift quarter’s results

LONDON BP, Europe’s largest oil company, said Tuesday that its second-quarter profit increased 35 percent, helped by record oil and gasoline prices and a jump in Russian production.

Net income rose to $3.43 billion, or 15.7 cents a share, from $2.54 billion, or 11.5 cents, a year earlier, the company said. The profit, the second-highest in the company’s history, foreshadows profit reports due on Thursday from Royal Dutch/Shell Group and Exxon Mobil. BP, Shell and Exxon are thought to have earned a combined $13.63 billion last quarter, according to analysts at Deutsche Bank.

The BP chief executive, John Browne, predicted in an interview that oil prices would stay high because of concern that supplies may be disrupted. The New York benchmark crude price was at $41.57 early Tuesday, up 13 cents. Crude oil in New York averaged $38.24 a barrel in the latest quarter, compared with $28.94 a year earlier.

“Refining has been very strong; headline oil prices have been very strong as well,” said Ruben Mikkers, a portfolio manager at Robeco Group in Rotterdam. “I can’t see much more upside, unless there is big political turmoil somewhere.”.

BP expects capital investment of about $14 billion this year, higher than its previous forecast, because of a drop in the dollar. The company said it would continue to buy back shares after spending $3.25 billion on repurchases in the first half.

The quarterly dividend was raised to 7.1 cents a share from 6.5 cents a share. For investors in Britain, the payout declined 4.4 percent because of a drop in the dollar.

BP shares were down 1.4 percent at 483 pence in midday trading.

BP’s most profitable business is pumping oil and natural gas, where the company benefited from both an increase in production and higher prices. Oil and gas output rose 18 percent from a year earlier, to 3.97 million barrels a day, in the quarter.

BP acquired new supply last year with a $6.35 billion venture, TNK-BP, with Russia’s Tyumen Oil. It expanded that investment in January with an agreement to include Russian oil producer Slavneft in the plan.

BP is facing higher taxes in Russia, where a yearlong investigation by Russian authorities of Yukos Oil and its biggest shareholder, Mikhail Khodorkovsky, has increased the perception of risk regarding Russia.

At BP’s refining and marketing unit, the company’s second-biggest division, profit rose 43 percent to $1.56 million, helped by wider margins. BP refined about 3.02 million barrels of crude a day, equal to Germany’s entire consumption.

royaldutchshellplc.com and its also non-profit sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

0 Comments on “International Herald Tribune: Russia aids 35% profit rise at BP”

Leave a Comment

%d bloggers like this: