‘Steady course’ as BP profits fall 53%

Author: By Graeme Evans, Press Association

The haul of 3.14 billion US dollars (£1.9 billion) between April and June was
well down on the 6.75 billion US dollars seen a year ago, a period when oil
prices were approaching record high levels.

However, chief executive Tony Hayward said the figure was 30 per cent higher
than the first quarter of the year, helped by a 4 per cent rise in BP’s
daily production to more than four million barrels of oil equivalent in the
three months.

He added: “We are in turbulent times, volatile and uncertain. But we continue
to steer a steady course through choppy waters.”

Despite the inevitable impact of falling crude prices on profits, BP has shown
signs of progress in turning around years of under-performance, particularly
in its refining operation.

Two years into the turnaround programme, Mr Hayward said BP was making good
progress in growing its exploration and production business, as well as
turning around its downstream operations and improving efficiency.

He added that the company’s target for a reduction of two billion US dollars
(£1.21 billion) in costs in 2009 had already been exceeded, with a further
one billion US dollars (£607 million) saving expected over the rest of the
year.

The company reduced headcount by 3,000 last year and is on track for another
5,000 by the end of 2009.

“We will continue to push efficiencies into the group and make sure every
dollar counts,” Mr Hayward said.

As well as cost savings and production gains, BP’s performance against the
previous quarter has been helped by firmer oil prices amid hopes for a
recovery in the world economy.

Mr Hayward said: “The overall picture is of energy demand now stabilising
following significant falls in the first half of the year. We see little
evidence of any growth in demand and expect the recovery to be long and
drawn-out.”

BP’s rival Royal Dutch Shell is also due to report results this week, with
analysts expecting second quarter profits of around 2.4 billion US dollars
(£1.45 billion).

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