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BP's Profit Rises Despite Lower Output

July 26, 2006|From the Associated Press

LONDON — Soaring oil and gasoline prices propelled BP to a $7.3-billion net income in the second quarter, a 30% increase from last year despite reduced output and rising costs.

BP's performance exceeded the expectations of Wall Street analysts, who forecast that second-quarter profits from the world's six largest publicly traded oil companies will surpass $36 billion. The next major integrated oil company to release quarterly earnings is ConocoPhillips. Its results are expected today.

Chief Executive John Browne, who announced Tuesday that he would step down at the end of 2008, said higher tax rates cut into the company's profitability.

BP has been plagued by operational problems across the U.S., including hurricane damage and a refinery explosion.

The company's U.S.-traded shares fell 23 cents to $69.51.

The effect of damaged platforms in the Gulf of Mexico after last year's hurricane season showed in the slowing of oil and natural gas production in the quarter to 4.02 million barrels of oil equivalent a day. That compared with 4.11 million in the same period last year.

BP's refining business suffered lower throughput. Its massive Texas City, Texas, refinery operated at sharply reduced rates because of damage after a March 2005 explosion, as well as from last year's hurricanes.

Despite operational snags, BP's revenue surged 24% to $73.5 billion as its global sale price for crude oil averaged $65.96 a barrel, compared with $47.79 a year earlier.

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