Oil giant BP reports huge profit rise

October 28th, 2008 - 8:45 pm ICT by IANS  

London, Oct 28 (DPA) Oil giant British Petroleum (BP) saw its profits jump to 6.4 billion pounds ($10 billion) on account of high oil prices in the third quarter of 2008, the company reported Tuesday.Results for the period between July and September were an astonishing 148 percent above the same period last year, BP figures showed.

Its profits came as crude oil prices hit a new peak above $147 a barrel in mid-July.

Oil prices have since fallen by more than half from their July peak to just above $60 a barrel.

“Although it has since fallen away sharply, the high oil price of the third quarter obviously helped our absolute result,” BP chief executive Tony Hayward said.

BP’s share price rose by more than two percent on the news in London, as Labour politicians and trade union leaders repeated their call for a windfall tax on energy giants’ profits.

Despite profiting from the high price of oil, BP said it had also benefited from “very real operational improvements in refining and rigorous cost control across the company”.

Hayward said Tuesday that while he expected oil prices to decline further due to global recession, he believed that BP was “well-positioned to cope with such volatility”.

“We think the current turmoil may in fact create opportunities for us and we will look at those very closely,” he said.

BP’s upstream operations - its oil production business - made an underlying pre-tax profit of $11.5 billion, an increase of 82.5 percent from a year earlier.

This included a profit of $849 million from BP’s troubled TNK-BP Russian joint venture, the company said.

BP’s downstream operations - its refining and petrol sales business - made an underlying pre-tax profit of $1.3 billion, up 70 percent from the same period last year.

BP’s Russian joint venture TNK-BP had been dogged by a power struggle which was resolved earlier this year in an agreement with Russian billionaire shareholders that also saw the departure of former TNK-BP chief executive Robert Dudley.

“These numbers have comfortably surpassed the top end of expectations and reiterate BP’s position as a true oil major,” said analyst Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers, of BP’s performance.

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