BP quarterly profit hit by falling oil prices

Oil giant BP has announced a sharp fall in quarterly profits due to lower oil prices.

Although oil prices have increased recently to around the $80 a barrel mark, prices are still way off the peak of $147 set in July 2008.

BP said third quarter profits were $4.98 billion (£3 billion) - down 50% on the same period last year.

This time last year, the company benefited from surging crude oil prices, which fuelled the company’s profit during the period.

However, despite the fall in profits, today’s results still exceeded analysts’ expectations.

The company has implemented a cost-cutting exercise which saw it slash its workforce by 3,000 last year and is set to lose a further 5,000 positions by the end of the year.

Meanwhile, the company said unit production costs were 18% lower compared with the same period in 2008, while oil and gas production was up 7% on last year.

Net income at its Russian joint venture TNK-BP rose 34% to $1.7 billion.

Last month, the oil giant received a boost by discovering a deep oil well in the Gulf of Mexico - large enough to supply US consumption for almost a year.

Discuss this in the Finance Markets forums

Story link: BP quarterly profit hit by falling oil prices