BP posts disappointing quarterly results

BP has posted disappointing quarterly results for the April-June period of this year, citing weaker oil and gas prices and reductions in output as the reason for this slump.

The fuel giant reported that its underlying cost profit for the quarter was $3.7 billion (£2.3 billion), compared to the $5.7 billion logged at the same time last year.

BP told investors that its lower output is due to expensive planned maintenance initiatives, particularly affecting high-margin production from the Gulf of Mexico and lower net income TNK-BP, which was offset in part by a beneficial adjustment to unrealised profit in the company's inventory.

Non-operating items totalled $4.8 billion on a pre-tax basis, with this lower figure due to significant setbacks such as the reductions in value of US shale and gas assets, specific refineries and the decision to suspending one of its offshore projects in Alaska.

Operating cash flow for the second quarter was $4.4 billion, compared to $3.4 billion in the first three months of the year.

BP expects to increase this by 50 per cent from 2011 levels in 2014 and anticipates this will be achieved by the completion of contributions into the Gulf of Mexico Trust Fund and the delivery of 15 major projects.

Six of these are due to be completed this year, while two based in the Gulf of Mexico and off the coast of Angola are now in action.

Six new rigs are now operational in the Gulf of Mexico and eight more ace expected to be in place by the end of the year.

BP group chief executive Bob Dudley commented: "It is important investment that will enhance safety and reliability for the long term. As we deliver this major transformation, we are also committed to generating sustainable efficiencies in our operations.

"Rebuilding trust with our shareholders and other stakeholders is vitally important."

At 11:20 BST, BP was down 4.1 per cent on the London Stock Exchange to 425.8p per share.