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BP profits not slick

Tuesday, July 31, 2012 - 01:24

July 31 - The UK oil company BP reported a nose dive in profits in their quarterly results, citing weak oil prices and the Gulf of Mexico spill as the main causes. Joanne Nicholson reports

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BP's profits were far worse than analysts predicted Profits plummeted to $3.7 billion dollars in the second quarter. That's an enormous drop from 5.7 billion in the same period last year. It's the worst of a poor set of results among the top oil companies who've all been affected by weaker oil and gas prices. BP is still weighed down by the Gulf of Mexico oil spill. The clean up, and litigation is costing them $38 billion dollars, which equates to two years profit at current prices. And planned maintenance had cut production in the Gulf of Mexico. It's had to slash $5 billion off the value of its U.S assets to compensate. Manoj Ladwa is a senior trader at TJ Markets: (SOUNDBITE) (English) MANOJ LADWA, SENIOR TRADER, TJ MARKETS: "Instead of owning assets across the entire supply chain from the well to the pump it's a much more lean and mean machine, therefore revenues were expected to be down but not down this much." Shale gas assets are among those BP has sold off, as well as some of its refineries. They also suspended their Liberty project in Alaska after realising the offshore drilling would cost more than the $1.5 billion dollars set aside. And, BP also saw reduced output from their joint Russian venture - TNK BP. The UK company's share price fell 4.3 percent on the news of the results. Joanne Nicholson, Reuters

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BP profits not slick

Tuesday, July 31, 2012 - 01:24