By Justin Scheck and Rory Gallivan
LONDON-- BP PLC on Tuesday reported a fall in first-quarter
profit from a year earlier, giving the first glimpse of how low oil
prices through the beginning of 2015 affected the world's biggest
oil companies.
BP's replacement-cost profit--a number similar to the net income
that U.S. oil companies report--was $2.1 billion, down from $3.48
billion a year earlier. Revenue fell to $54.9 billion from $75.1
billion from a year earlier.
Production for the quarter was 8.3% higher than the first
quarter of 2014 at 2.31 billion barrels of oil equivalent a
day.
"Looking ahead, we expect second-quarter 2015 reported
production to be lower than the first quarter, reflecting
significant seasonal turnaround and maintenance activity," the
company said.
Underlying adjusted replacement cost profit in BP's downstream,
or refining, division was up to $2.16 billion from $1.01 billion,
but in the upstream division, which finds and produces new oil and
gas, it was down to $604 million from $4.4 billion.
BP, like other oil producers, has been hit hard by slumping oil
prices since mid-2014.
The weak prices compound BP's already considerable challenges.
For the past five years, the company has been trying to recover
from its fatal 2010 Deepwater Horizon disaster in the Gulf of
Mexico.
On Tuesday the company reported a net pretax charge of $332
million related to the disaster.
BP has sold more than $40 billion in assets to raise cash for
cleanup and legal costs related to the Gulf of Mexico spill. While
those costs are winding down, BP's ability to spend on new reserves
remains limited as it tries to limit spending while oil prices are
low.
In contrast, U.K. rival Royal Dutch Shell PLC is using weak
prices as an opportunity to invest, with a deal to acquire BG Group
PLC for $70 billion.
Write to Justin Scheck at justin.scheck@wsj.com and Rory
Gallivan at rory.gallivan@wsj.com
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