BP expects "drawn-out" recovery as Q2 profits slump (Roundup)

Jul 28, 2009, 10:04 GMT

London - The global recession and falling crude oil prices have cut profits at oil giant British Petroleum (BP) by more than 50 per cent in the second quarter of the current financial year, the company reported in London Tuesday.

BP said its replacement-cost profit between April and June was 3.1 billion dollars, down by 53 per cent from 6.75 billion dollars during the same period last year.

The results took BP's half-year profits to 5.5 billion dollars, down 57 per cent from the first six months of 2008.

But Tuesday's figure was 30 per cent higher than the results for the first quarter of 2009.

'The overall picture is of energy demand now stabilising following significant falls in the first half of the year. We see little evidence of any growth in demand and expect the recovery to be long and drawn-out,' chief executive Tony Hayward said.

'We are in turbulent times, volatile and uncertain. But we continue to steer a steady course through choppy waters,' he added.

Oil prices have hovered at between 60 and 70 dollars a barrel recently - well below the high of 147 dollars a year ago.

But despite the inevitable impact of falling crude prices on profits, BP had made progress in turning around years of under-performance, particularly in its refining operation, said Hayward.

He cited 'good progress' in the growth of BP's exploration and production business, as well as turning around its downstream operations and improving efficiency.

The company's target for a reduction of 2 billion dollars in costs in 2009 had already been exceeded, with a further 1- billion-dollars saving expected over the rest of the year.

The company cut back staff by 3,000 last year and is planning a further reduction of 5,000 by the end of the year.

'We will continue to push efficiencies into the group and make sure every dollar counts,' Hayward said.