BP has reported profit of $4.3bn or 23 cents a share for the fourth quarter of fiscal 2009 compared with a loss of $3.3bn or 18 cents a share in the same quarter of the previous year. Production was up 4% to 3.998 million barrels of oil equivalent a day in 2009.
The increase in production was ahead of the company’s expected long-term average growth rate of 1-2% and reflected the ramp-up and start-up of new projects, including the first full year of production from the Thunder Horse field in the US Gulf of Mexico.
BP’s fourth-quarter replacement cost profit was $3.45bn, compared with $2.58bn in the year ago quarter, an increase of 33%. For the full year, replacement cost profit was $13.96bn compared with $25.59bn a year ago, down 45%.
The company said that 2010 production is expected to be slightly lower, reflecting the benefit in 2009 of the absence of a significant hurricane season. This expected level of 2010 production is in line with the guidance given by the company in March last year. Production growth is expected to resume in 2011.
BP said that its refineries were largely restored to their full operating capability, delivering their highest level of availability since 2004.
According to BP, reducing the underlying cost structure of the group remains a management priority in 2010. The company’s drive to streamline and simplify its business, begun in late 2007, has, in addition, resulted in a net headcount reduction of around 7,500.
During the year the company gained access to new resource opportunities such as the Rumaila oilfield in Iraq, coalbed methane in Indonesia and onshore gas in Jordan, and also strengthened its position in existing core areas including the deepwater Gulf of Mexico and Egypt’s Nile Delta. BP also witnessed exploration success with the Tiber discovery and confirmation of the Mad Dog South extension in the Gulf of Mexico, and three further discoveries in block 31 offshore Angola.
In refining and marketing, 2009 earnings were impacted by weak trading conditions, particularly in the fourth quarter. However, operational improvements across all of BP’s refineries resulted in refinery availability of 94%.
Looking forward, the company expects recovery in the major economies of the US and Europe to be ‘slow and gradual’. While oil markets look well supported by OPEC, the company expects gas markets to remain volatile and refining margins to remain depressed for the foreseeable future.
Tony Hayward, group chief executive said 2009 had been a ‘very good’ year for BP.
He added, “Our strategy remains the same: delivering profitable growth in the upstream; driving cost efficiency in the downstream and at the corporate centre; and investing with discipline and focus in alternative energy.”