War and strife help BP to record first-quarter profit

  • Business
  • Thursday, 01 May 2003

LONDON: British energy giant BP plc has produced record profits for the first quarter as a result of war, strikes and unrest in key oil nations that lit a fire under crude and fuel prices during the period. 

BP’s net profit adjusted for exceptional items and to reflect the current cost of supplies grew 136% from a year ago to US$3.73bil for the three months to March. 

The result of Britain’s biggest company and the world's No. 3 oil firm was at the top end of analysts’ expectations and came ahead of similar bumper earnings hauls set to be announced by rivals later this week. 

Supply concerns linked to the war in Iraq, strikes in Venezuela and civil unrest in Nigeria – all key hydrocarbon nations – sent the average price of crude to a 12-year high in the first quarter. 

The Venezuela strike also shut in significant exports to the United States, pushing the price of fuel higher around the world and offering BP and its rivals some of the best refining profit margins in recent years. 

High US natural gas prices in a cold snap also helped. After acquisitions in recent years, BP has become the dominant supplier of natural gas in the United States. 

BP’s profits last peaked in the first quarter 2001, when a similar conjunction of strong energy prices helped deliver an adjusted net profit of US$3.71bil. 

Chief executive John Browne was unapologetic about the record profit amid war and economic hardship. 

“We do it in service of our shareholders,” he said. “Our shareholders are in bulk the institutions which manage the pension funds for people in this country and elsewhere.” – Reuters 


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