BP Profits Lower As Production Falls For 24 Straight Months - AFP

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British oil giant BP announced a fall in net profit in the three months to June following 24 months of continuously falling production despite strong world demand for energy. Net profit on the basis of replacement costs, which excludes the effect of changes in the value of oil and gas inventories, fell by 0.5 percent to 6.087 billion dollars (4.406 billion euros) during the second quarter, compared with the same period in 2006.

The replacement cost figure is closely watched by the market.

BP, the world's third-biggest energy group, was also hit by a slight fall in average oil prices during the second quarter compared with prices 12 months earlier. The results were seen as posing a big challenge to the new head of the group, Tony Hayward, who took over in May after the dramatic resignation of chief executive John Browne. BP said that replacement cost net profit, excluding one-off gains, dropped by 12.5 percent to 5.346 billion dollars during the second quarter.

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BP said on Tuesday that during the second quarter, oil production fell by 5.3 percent to 3.804 million barrels per day, as the group faced disruptions at US refineries.

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http://www.petroleumworld.com/story07072416.htm