BP Warns on Oil Output as Profit Falls

From Market Watch

LONDON– BP PLC reported a fall in first-quarter profit as the energy giant continues to reshape itself in the aftermath of the Deepwater Horizon explosion and oil spill.

BP’s production for the three months ended March 31 fell 8.5% to 2.13 million barrels of oil a day and the company warned that second-quarter production will be lower, mainly because of planned maintenance in the higher-margin North Sea and Gulf of Mexico regions.

BP said underlying first-quarter replacement-cost profit, which strips out inventory gains or losses, fell to $3.23 billion, from $4.22 billion last year. Replacement-cost profit is similar to net profit, according to U.S. generally accepted accounting principles.

Revenue slipped to $91.71 billion, from $94.11 billion a year earlier. Net profit was $3.53 billion, from $16.86 billion a year earlier, which was boosted by a $12.5 billion gain the sale of its stake in TNK-BP.

BP increased its first-quarter dividend to 9.75 cents a share, from 9 cents a share last year.

Since the 2010 Deepwater Horizon disaster, BP has booked write-downs of about $42 billion for legal settlements and cleanup costs related to the Gulf of Mexico incident, which killed 11 workers. BP continues to face uncertainty in U.S. courts, where it awaits penalties under the Clean Water Act. To pay its legal costs, BP has shed billions of dollars worth of assets as part of a plan to become smaller and more profitable.

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