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Fuels & Lubricants Discussion all about Fuels & Lubricants. synthetic oil, conventional oil, brands, change intervals, diesel grades, gelling and such debated items like that. Non TDI related postings will be moved or removed. This forum is NOT for the discussion of biodiesel and other alternative fuels.

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Old October 25th, 2005, 09:32   #1
PDJetta
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Default BP gets big lift from big oil prices, Profits Rise

From CNN Money

LONDON (Reuters) - Oil giant BP Plc reported a sharp rise in third-quarter profits, mainly due to high oil prices, but while the results were in line with forecasts some investors were disappointed by a start-up delay at a key oil platform.

The world's second-largest listed oil company said Tuesday that its closely watched adjusted replacement cost profit, which strips out one-off items as well as gains or losses from changes in the value of fuel inventories, jumped 27 percent to $5.33 billion.

The result compared with an average forecast given in a Reuters poll of nine analysts of $5.39 billion, with individual forecasts ranging from $5.0 billion to $5.6 billion.

Profits would have been much higher had it not been for the impact of hurricanes Rita and Katrina, which shut in production of 145,000 barrels of oil equivalent a day in the quarter, BP said.

BP (Research) also said its $1 billion Thunder Horse oil platform in the Gulf of Mexico, which was originally scheduled to come on stream later this year, will now not start production until the second half of 2006.

BP's shares slipped 0.8 percent while the DJ Stoxx European oil and gas sector index was down 0.6 percent.

"The fact Thunder Horse won't be on stream until the end of next year may disappoint some people," said Julian Chillingworth at Rathbone Investment Management.

The semi-submersible platform, 25 percent owned by Exxon Mobil, is the largest facility of its kind in the world and was due to produce 250,000 barrels of oil a day at full capacity.

But in July it was discovered to be tilting precariously after Hurricane Dennis hit the Gulf of Mexico. BP subsequently pushed back its late 2005 startup target but investors still hoped the delay would be six months at the worst.

Repairs to the platform are expected to cost around $250 million, a BP spokesman said.
High oil compensates

The main driver of the profit increase was a bumper result at BP's upstream oil and gas production division, with record oil prices during the quarter more than compensating for a fall in production, largely due to U.S. hurricanes.

Similarly, record refining margins more than compensated for storm-related refinery stoppages on the U.S. Gulf coast.

However, BP said production at its Texas City refinery would not now restart until late in the fourth quarter, with initial gasoline production due in December. Dealers had expected the refinery to restart in October or November.

BP's fuel retailing margins also fell "significantly" compared with a year ago because the firm was unable to fully pass on price rises to customers.

"A common theme throughout the sector has been increased pressure from governments and final customers to keep fuel prices at the pump low," Goldman Sachs said in a research note Monday.
Party not over yet

A gloomy trading statement made by BP earlier this month, in which the firm flagged the hurricane effects, poor marketing margins and a failure to capture the full benefits of soaring benchmark oil price rises, led some analysts to question whether profitability had peaked for oil companies.

However, BP Chief Executive John Browne said on Tuesday: "Prices are expected to be well supported into the winter ... refining margins are likely to remain high."

Oil firms' shares have soared in the past year and many investors saw BP's trading statement as a cue to take profits. But analysts said they believed there was still upside in the sector.

BP's net profit was hit by one-off items of $921 million -- mainly due to an accounting writedown related to the sale of BP's petrochemical unit Innovene.

BP said it would pay a quarterly dividend of 8.925 cents a share, up from 7.1 cents for the same period last year.

See:

http://money.cnn.com/2005/10/25/news...reut/index.htm

--Nate
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Old October 25th, 2005, 21:57   #2
TornadoRed
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Default BP gets big lift from big oil prices, Profits Rise

Quote:
The world's second-largest listed oil company said Tuesday that its closely watched adjusted replacement cost profit, which strips out one-off items as well as gains or losses from changes in the value of fuel inventories, jumped 27 percent to $5.33 billion....
Repairs to the platform are expected to cost around $250 million, a BP spokesman said.
The headlines say "record profits." But then the cost to repair a single platform is buried deep in the article.

Big profits are good. Even if the company earning the profits doesn't invest in new refineries, other people look at those profits and decide they want to get in on the action. Richard Branson, founder of the Virgin empire, is thinking about building a refinery, if only to provide fuel for Virgin Air's planes.

And maybe few or no new refineries will be built in the US. That sucks. But there are dozens of them in the works elsewhere: in the Caribbean, in South America, in Africa, in South Asia, in Indonesia, in Eastern Europe, and probably in Russia.
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