* Q1 underlying replacement cost net profit $4.22 bln
* Beats analysts' forecast of around $3.27 bln
* Helped by two new oilfields, trading division
* Shares climb 2.3 percent
By Andrew Callus
LONDON, April 30 BP Plc profits beat
analyst expectations by almost $1 billion in the first quarter,
helped by two new oilfields and a strong performance from its
The British oil company - still fighting multi-billion
dollar lawsuits over its Gulf of Mexico oil spill of three years
ago - turned in underlying replacement cost net profit of $4.22
billion for the quarter.
That was down from $4.65 billion a year ago mainly due to
asset sales, but it beat analysts' forecasts of around $3.27
billion and the company's shares climbed 2.3 percent to 467.5
pence in early Tuesday trade, their highest since late January.
"It's a very good number. They beat consensus materially.
The way I look at it I strip out what I think are non-recurring
things like trading gains, positive consolidation," said Societe
Generale analyst Irene Himona. "Even if you strip all that out
you find that the adjusted profit in Q1 was still about 7
percent ahead of consensus, so clearly a strong operational
performance that's very encouraging."
BP has been flagging for some time that its new production
might deliver better profitability. The quarter included a full
three months of production from its Skarv field in the North Sea
and from its PSVM facility in Angola, which both started
producing at the end of last year.
Lower unplanned downtime in the refining part of the
business and lower costs also contributed to the earnings
surprise. Trading of oil and gas is not separated out in BP's
figures, with oil trading buried in a refining and marketing
result that was twice as strong as a year ago, and gas trading
hidden within the upstream oil and gas production section which
was down slightly.
The lower overall profit versus a year ago tracks the
group's shrinking earning power after the sale of its holding in
Russian venture TNK-BP, and the disposal of other producing
assets to pay its oil spill liabilities.
Ten days of earnings from its newly-acquired stake in
Russia's top oil firm Rosneft and the profitable extra
output failed to make up the difference.
BP's rivals Exxon Mobil and Chevron also
reported better-than-expected first-quarter profits last week,
although the scale of BP's earnings surprise is bigger.
BP's chief executive Bob Dudley, who has been under pressure
from investors to deliver a turnaround for the company, said the
completion of a $38 billion post-spill divestment programme
along with the revamp of its Russian activities which was
completed ahead of deadline earlier this year and produced an $8
billion share buyback, were steps in that direction.
"We have really simplified and focused down the portfolio,"
he said in a company video. We've got a lot still to do this
year but it's off to a good start."