At first glance, BP's figures looked good. Fourth-quarter profits rose 70% compared with 12 months ago. But that missed the City's forecasts, while 2009 as a whole saw a 45% profit fall.
The recovery from recession will be "slow and gradual", said BP boss Tony Hayward. BP's output is likely to be "slightly lower" in 2010, given this year's unusually benign hurricane season. The shares fell by almost 5% after the report.
What the commentators said
BP's problem "lay almost solely with refining and marketing operations, which barely broke even during the fourth quarter", said Lex in the FT. Margins have slumped due to the recession and a gradual shift away from petrol among Western consumers amid the rise of biofuels and electric vehicles.
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It hardly helps that there are "too many oil refineries in North America and Europe", said Nils Pratley in The Guardian. "Thank heavens for Opec, which has kept its production quota discipline" and thus propped up oil prices. When prices are consistently above $60/barrel, shareholders can stop sweating about the safety of their dividend."
Longer term, the market wants to see BP convert more of its cash into profit, said Damian Reece in The Daily Telegraph. "That's where Hayward's cost savings and cultural changes come in." Indeed, until Europe's largest oil firm changes, it won't put up a "real contest with the big daddy of the business, ExxonMobil", said David Wighton in The Times.
Although in 2009 BP pumped about 70,000 barrels per day more oil, "Exxon is still much more efficient and profitable and worth almost double BP. That shows the scale of the challenge and the opportunity."
BP: 576p; 12m change 18%
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