BP Oil earnings up 30% - more Oil companies to report earnings next week

Tuesday, July 25, 2006
By: Oil Boom Profits
http://energyupdate.firez.org/

BP Plc, Europe's biggest oil company, reported a 30 percent jump in second-quarter profit to a record as crude prices surged and refining earnings increased.

Net income rose to $7.27 billion, or 35.6 cents a share, from $5.6 billion, or 25.9 cents, a year earlier, the London-based company said today in a statement. Revenue climbed 24 percent to $72.4 billion.

Chief Executive Officer John Browne today said he will boost 2006 capital spending by as much as $1 billion to $16 billion to raise production and gain ground on bigger rival Exxon Mobil Corp., which plans to spend $20 billion. His target to increase output 4 percent a year is being tested by a yearlong delay in the start of the Thunder Horse platform in the Gulf of Mexico.

BP is ``struggling to capture the benefits of the stronger oil price background,'' said Ivor Pether, who helps manage about $12 billion at Royal London Asset Management, including BP shares. The shares are ``dull'' today partly because the profit gains ``are not down to exceptionally good performance'' from the company's units.

Shares of BP slipped 0.1 percent to 633 pence as of 3:32 p.m. in London, valuing the company at 125.9 billion pounds ($232 billion). BP said the start of its $1 billion Thunder Horse platform would be delayed until next year. It was initially forecast to start late 2005.

Output Decline

BP shares have added 2.3 percent this year, less than a 17 percent increase by Exxon Mobil and a 4.5 percent gain in Royal Dutch Shell Plc's stock.Second-quarter oil and gas output fell 2.3 percent from a year earlier, the fourth consecutive decline in production, BP said today.

BP's 17.6 billion barrels of oil and gas reserves are valued at $13.21 each, according to data compiled by Bloomberg. That's less than for Exxon Mobil, whose 21.6 billion barrels are valued on the stock exchange at $18.27 each.

Browne, 58, said he plans to retire when he reaches 60 in 2008 and hand over to one of several candidates.

``There are more than three,'' he said in an interview today in London.

Chairman Peter Sutherland asked Browne to make clear he will retire in 18 months, the Financial Times said today, citing an unidentified person close to the board. Browne is ``very upset'' and is resisting Sutherland's demand, the newspaper said.

`No Rift'

Browne today denied there was a falling out with the chairman. ``There is no rift,'' Browne said.

Browne oversaw BP's acquisition of Amoco Corp. in 1999 and Atlantic Richfield Co. in 2000. He established a Russian joint venture, OAO TNK-BP, in 2003, allowing BP to surpass Shell in production ...

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