BP profit on the skids

Underlying replacement cost profit at integrated oil major BP was down in the first quarter, with the downstream business primarily responsible for the fall-off.

Underlying replacement cost profit after tax in the three months to the end of March came in at $4,799m, down from $5,504m in the first quarter of 2011.

That generated earnings per ordinary share of 25.29 cents, versus 29.25 cents the year before.

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Underlying replacement cost profit before interest and tax was $6,299m for the upstream (oil production) business, compared to $6,684m the year before, and $924m for the downstream (refining) business, compared to $2,196m the year before.

Production for the quarter was 2,452m barrels of oil equivalent per day, 6% lower than the first quarter of 2011. After adjusting for the effect of divestment of assets, and entitlement impacts in its production-sharing agreements, production increased slightly year on year. This primarily reflects stronger performance in Angola and new production from India, offset by production decline in the Gulf of Mexico, which continues to be affected by the drilling moratorium in 2010 and 2011 following the Macondo oil well tragedy.

"Looking ahead, we expect second-quarter reported production to be lower, and costs to be higher, as a result of normal seasonal turnaround activity concentrated on high-margin production in the Gulf of Mexico at Atlantis, Mad Dog and Holstein," the company said.

Net debt at the end of the quarter was $31.2bn, compared with $27.5bn a year ago. The ratio of net debt to net debt plus equity was 20.7% compared with 21.0% a year ago.

Total capital expenditure for the first quarter was $5.6bn, almost all of which was organic. Disposal proceeds were $1.3bn for the quarter. Since the start of 2010, BP has announced disposals for a total of around $23bn.

The first quarter dividend is the same as the 8 cents paid in the preceding quarter.

JH