U.K. energy giant BP PLC Tuesday posted a more than threefold increase in profit for the first quarter as proceeds from the sale of Russian joint venture TNK-BP offset a fall in oil and gas production and downtime at the company's key Whiting refinery in Indiana.
"These strong first-quarter results demonstrate the progress BP is making...and underpin our commitment to material operating cash flow growth by 2014," said BP Chief Executive Bob Dudley.
The London-based oil and gas company said its replacement cost profit, a figure that excludes gains or losses in the value of inventories and is therefore equivalent to the net profit figure reported by U.S. oil companies, was $16.60 billion in the three months ended March 31, compared with $4.78 billion in the first quarter of 2012.
First-quarter earnings were bolstered by the sale of BP's half of TNK-BP to OAO Rosneft, which completed March 21, for a total consideration of $27.5 billion in cash and Rosneft shares. BP now holds a 19.75% interest in Rosneft. The 11 days of earnings from Rosneft attributable to BP in the first quarter were estimated at $85 million.
The gain on the sale was $15.5 billion, of which $12.5 billion was recognized in the first quarter. The rest of the proceeds will be released to the income statement over time, BP said.
Excluding the proceeds of the TNK-BP sale and other one-off gains, the company's profit was $4.22 billion, down 9.4% on the year and above average expectations of $3.25 billion in a Dow Jones Newswires poll of nine analysts.
Excluding TNK-BP and Rosneft, BP's total oil and gas production was 2.330 million barrels of oil equivalent per day, a 5% decrease on the year due mostly to other asset sales, and slightly above analyst expectations of 2.322 million barrels of oil equivalent a day.
The company announced a quarterly dividend of 9 cents a share to be paid in June. Group revenues were $107.21 billion, compared with $97.42 billion in the first quarter of 2012. Diluted earnings per share were 87.61 cents, compared with 29.97 cents the previous year.
Copyright (c) 2012 Dow Jones & Company, Inc.
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