Smaller BP's profits down as oil spill trial looms
By Andrew Callus
LONDON (Reuters) - Shrinking British oil company BP Plc (BP.L: Quote) announced quarterly profit down a fifth from a year ago, after it sold assets in preparation for what could be its biggest oil spill payout when the case comes to trial later this month.
BP, the last of the big four western world oil companies to report fourth quarter figures, still beat expectations because of one-off taxes related to its divestments and liability payments, and its shares rose nearly 2 percent.
Once the world No. 2 but now the smallest of the four "oil majors" by market value, BP turned in net profit adjusted for non-operating items and accounting effects of $3.984 billion down from $4.986 billion a year earlier.
Analysts had expected a figure of $3.305 billion, but they had warned that the result was hard to predict given the changing nature of BP, and put the difference down to one-off tax effects. Before tax, underlying profit was $5.098 billion down from $7.179 billion, broadly in line with forecasts.
The company has sold $37.8 billion worth of assets since the Macondo spill and taken a total charge against profits of $42.2 billion - most of which has already been paid out in compensation and fines. It also expects to receive $12.3 billion this year from the sale of its Russian interests to Rosneft (ROSN.MM: Quote) along with a one-fifth stake in the state company.
More billions could flow out of the business this year, either via a settlement with U.S. authorities, or as a result of a civil penalties trial that is due to begin on February 25.
As a result of its trimming, BP's oil and gas output fell by 7 percent in the quarter.
"We will continue to see the impact of this reshaping work in our reported results in 2013," said chief executive Bob Dudley. "By 2014, I expect the underlying financial momentum to be strongly evident." Continued...