* Shares up 2 percent
* CEO says reshaping impact will continue into 2013
By Andrew Callus
LONDON, Feb 5 Shrinking British oil company BP
Plc 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
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
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 Feb. 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."
The oil spill, which killed 11 men and leaked 5 million
barrels of crude into the sea, has had a debilitating effect on
BP's share price performance, as has a long-running dispute with
its former partners in Russia which casts a shadow over its
The stock has recovered in recent weeks after the sales to
Rosneft last year, and as investors start to price in closure on
the spill. However, BP shares still trade and just 8.3 times
past earnings per share and 8.6 times predicted earnings per
share compared with 9.3 and 9.2 times respectively on average
among its big rivals Exxon Mobil, Chevron and
The company's stock was up 2.0 percent at 471 pence by 0930
GMT on Tuesday, outperforming Shell which was up 0.5 percent.
BP expects four new major upstream projects to begin
production by the end of 2013 -- Angola LNG, North Rankin 2 in
Australia, Na Kika 3 in the Gulf of Mexico, and the Chirag Oil
project in Azerbaijan.
A further six major projects are expected to come onstream
through 2014. In addition, the major upgrade of the Whiting
refinery in Indiana is expected to come online in the second
half of 2013, BP said.
Like its sector peers, BP is facing rising costs and is
spending fast to keep production growing and to replace
reserves. The company confirmed its prediction from December
that organic capital expenditure would be $24-$25 billion in
2013, up from $23 billion in 2012.
BP's dividend for the quarter was 9 cents, unchanged from
the third quarter.
Exxon Mobil and Chevron reported results on Friday of last
week. Royal Dutch/Shell's figures were released
on Thursday. [ID:nL5N0B032D}