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BP profit hit by low oil prices

LONDON, Feb 2 – British energy giant BP on Tuesday announced net profit of 4.295 billion dollars (3.1 billion euros) for the fourth quarter as it ramped up production and slashed costs.

BP, which recently overtook Royal Dutch Shell to become Europe\’s biggest energy group by market value, posted a loss 3.34 billion dollars in the final quarter of 2008 owing to tumbling oil prices.

BP said in an earnings statement that net profit dropped almost 22 percent to 16.578 billion dollars for 2009 from 21.7 billion dollars in 2008.

Stripping out exceptional items and changes to the value of oil inventories, BP\’s profit soared 68 percent to 4.38 billion dollars in the fourth quarter. However it missed analyst expectations of profit totalling 4.7 billion dollars.

Energy production meanwhile rose four percent to 3.998 million barrels of oil equivalent a day in 2009.

"The increase in production was well ahead of the company\’s expected long-term average growth rate of 1-2 percent and reflected the ramp-up and start-up of major new projects, including the first full year of production from the Thunder Horse field in the US Gulf of Mexico," BP said.

Cash costs for 2009 were more than 4.0 billion dollars lower compared with 2008.

"Reducing the underlying cost structure of the group remains a management priority in 2010," BP said.

"The company\’s drive to streamline and simplify its business, begun in late 2007, has, in addition, resulted in a net headcount reduction of around 7,500."

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BP chief executive Tony Hayward said 2009 had been "one of the best years for BP and its shareholders" in recent times.

"But we are not resting on our laurels. There\’s a lot more to be done," he insisted.

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