BP net profits plunged in the first quarter compared with the outcome a year ago when the group sold its stake in a Russian joint venture, the British energy giant says.
Underlying earnings were hit also by a one-off loss related to the group’s shale energy interests, while the firm also experienced falling revenues and lower oil production.
Net profit stood at $US3.528 billion ($A3.82 billion) in the first three months of 2014 compared with profit after tax of $US16.863 billion in the first quarter one year earlier, BP said in an earnings statement on Tuesday.
BP – still seeking to reposition itself after the Gulf of Mexico oil spill disaster in 2010 which has cost it tens of billions of dollars in compensation and fines – has since sold its 50-per-cent stake in joint venture TNK-BP to Rosneft.
This in turn has given BP a near 20-per-cent holding in the Russian energy company.
“First quarter 2013 included a $US12.5-billion gain relating to the disposal of our interest in TNK-BP,” the British company said in Tuesday’s statement, explaining the main reason for the heavy fall to net profit.
The results were published one day after Washington imposed sanctions against Rosneft chief executive Igor Sechin.
But BP had insisted on Monday that it remained committed to Rosneft, despite Sechin being named on a new list of seven senior officials facing punitive measures over President Vladimir Putin’s stance on Ukraine.
BP’s first-quarter performance was meanwhile affected also by a $US521-million write-off relating to its decision not to develop the Utica shale energy acreage in the US.
Stripping out the one-off gains and losses, as well as changes to the value of its oil and gas inventories, BP said that profit after tax dropped to $US3.225 billion in the first quarter – which was also lower compared with market expectations.
Analysts’ consensus had been for so-called underlying replacement cost profit of $US5.42 billion, according to a survey from Dow Jones Newswires.
Production fell 8.5 per cent to 2.13 million barrels of oil and gas per day in the reporting period, while total revenue dipped to $US91.71 billion from $US94.11 billion.
BP warned that output would fall further in the second quarter owing to planned maintenance on facilities in the North Sea and Gulf of Mexico.