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The Guardian: High oil prices boost BP profits: “outshone its scandal-hit rival Royal Dutch/Shell this year”

The Guardian: High oil prices boost BP profits: “outshone its scandal-hit rival Royal Dutch/Shell this year”

Posted 28 July 04

Energy giant BP today reported record half-year profits on the back of the highest oil prices for more than 20 years.

BP, the world’s second-biggest oil group – which has outshone its scandal-hit rival Royal Dutch/Shell this year – posted profits of $8.6bn (£4.68bn), up by one fifth from a year ago.

It is the first of the world’s top three oil companies to report second-quarter results. Exxon, the industry leader, and Shell, the world’s third-largest oil group, report later this week.

In January, Shell’s statement that it had overstated oil and gas reserves by 20% shocked financial markets. However, record oil prices and bumper profits by top oil firms buoyed the sector.

Although the world economy slowed during the second quarter, and Opec boosted production, BP said strong demand for oil, and tight capacity, would continue to prop up prices. A barrel of Brent oil averaged $35.3 in the second quarter, and more than $37 during July.

Lord Browne, the BP chief executive, said the company was on track to meet all its targets, and announced a 9% increase in dividends to shareholders. High oil prices had enabled the group to buy back a large tranche of its shares and accelerate growth in dividend payments.

“This has been another strong performance against the backdrop of a robust trading environment,” he said.

He also reassured investors about the strength of the world recovery, pointing out that growth was still above historic levels. Fears of a slowdown have led to volatile movements on stock markets around the world.

Lord Browne noted that the pace of economic activity appeared to be easing in the US, while China had tightened policy to slow domestic demand.

“However, the momentum in Japan has continued, and signs of recovery are emerging within Europe. Continued global economic growth is expected,” he said.,,1270083,00.html

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