As oil prices continue at a high level, so oil companies continue to enjoy healthy profits. Such has been the case for British Petroleum, which has reported a 29% rise in profits for the first quarter of 2005.
BP beat analyst forecasts as it achieved a $4.96 billion profit for the three-month period, excluding non-operating items, an improvement on its profits in the same period a year ago of $3.5 billion. Net profit, taking into account asset sales including the Ormen Lange gas field in Norway, reached $5.49 billion.
Not surprisingly, BP’s oil and gas exploration and production division delivered the bulk of the profits as increased production and major price increases for oil enabled it to double income.
Production for the quarter was 4.1 million barrels of oil equivalent per day, an increase achieved through the development of new sources including increased volumes from the company’s Russian joint venture, TNK-BP
BP will welcome the strong revenues as they will go towards minimizing the impact of Russian government plans to help itself to a significant portion of BP’s income via a hefty tax bill recently issued to TNK-BP.
Earlier in the month Russian authorities handed TNK-BP a tax demand for near to $1 billion for taxes dating back to 2001. Following the surprise move, BP boss Lord Browne met with Russian leader Vladimir Putin last week to discuss a number of issues, with the tax bill likely to have been one. BP has said that its dialogue with the Russian government is ongoing.