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Times Online: Tony Hayward attacks BP performance

July 24, 2007

Despite a surging oil price, production problems and refining outtages cut BP’s profits to $6bn between March and June: Steve Hawkes

Tony Hayward admitted today that BP was falling behind its rivals as he delivered a profits fall in his first set of results since taking over as chief executive of the oil giant.

Mr Hayward, who replaced Lord Browne of Madingley in May, said BP’s current operating performance was “not good enough” given a slump in production and continuing problems at its refineries in the US.

The setbacks, at a time of near record crude prices, meant profits across the group fell 1 per cent to $6.09 billion (£2.9 billion) in the three months to June 30.

The result would have been worse but for $741 million of one-off gains, including the disposal of BP’s Coryton Refinery in Essex earlier this year.

Shell is expected to report profits of $6.7 billion on Thursday while Exxon Mobil could hit $11 billion.

Mr Hayward, who dismissed renewed speculation of a possible merger with Shell, refused to put a timetable on BP’s recovery.

But he revealed that two new fields in the Gulf of Mexico and Angola should be up and running by the end of the year.

Texas City refinery should be processing 400,000 barrels a day by the end of the year. The plant is still not back to full capacity following the fatal explosion that ripped through the plant in 2005.

Byron Grote, BP’s finance director, is expected to stay on until Sprin 2009 to help the recovery effort but 100 head office staff will be “redeployed” as part of a cost-cutting move.

Shares in BP, which have climbed nearly 19 per cent since March, fell 1p to 600.5p.

Peter Hitchens, oil analyst at Teather & Greenwood, said the ‘clean’ profits figure once exceptional items had been stripped out was $5.2 billion.

He added: “That is slightly better than expected, but overall these results are pretty dull and boring.

“Long term we still believe that BP has good potential. However it is likely the shares could struggle to outperform the other integrated oil companies in the short term.”

Mr Hayward had been due to take over this month but was forced into the chief executive seat in May following Lord Browne’s shock resignation.

He is not expected to outline his strategy for months except to reiterate a need for BP to get back to basics after a dismal year.

The company has suffered from the fallout to the Texas City blast, a series of pipeline leaks at its Prudhoe Bay field in Alaska and delays to the much-lauded Thunder Horse platform in the Gulf of Mexico.

Production in the second quarter of the year fell 5 per cent to 3.8 million barrels a day, on falling output in Russia and maintenance in the North Sea.

Shareholders will receive a quarterly dividend of 10.825 cents per share, up 10 per cent yet the high pound means the payout for UK shareholders is 5.278p per share, 1 per cent less than a year ago. and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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