The oil company said profit excluding non-operating items and accounting effects for the first three months of 2015 fell 20% to $2.6bn (£1.7bn). The figure was double the $1.3bn expected by City analysts.
The profit fall was caused by an earnings collapse at BP’s exploration and production business, where profit fell to $604m from $4.4bn. But the group’s refining business performed better than expected.
Profit at the division more than doubled to $2.2bn from $1bn, reflecting a stronger market for refining and improved efficiency and marketing, BP said.
Analysts had expected stronger refining margins to provide only a slight respite from the plunge in the oil price. The price of Brent crude oil halved to $54 a barrel from a year earlier – a low not seen since the depths of the global recession five years earlier.
BP announced a quarterly dividend of 10 cents a share, unchanged from the previous quarter and up from 9.5 cents a share a year earlier.
The chief executive, Bob Dudley, said: “The dividend is the first priority within our financial framework and the board is committed to maintaining it, as we have today. We can sustain this by successfully resetting our capital and cost base and rebalancing our sources and uses of cash in the prevailing oil price environment.”
BP was forced to cut its dividend, relied on by savers and pension funds, after the 2010 Gulf of Mexico oil spill. It said the total charge at the end of the quarter for the environmental disaster was $43.8bn.
The results could provide some relief for Dudley, who is trying to restore the company to full health after it was weakened financially and operationally by the Gulf of Mexico incident.
The government has made it clear that it would oppose a foreign bid for BP, with some analysts tipping the company as a takeover target after Royal Dutch Shell’s agreed deal to buy BG Group for £42bn.
BP has cut capital spending and is selling $10bn of assets to cope with an expected prolonged low oil price. It announced its latest sell-off last week – a major North Sea pipeline system for £320m.
This article was written by Sean Farrell, for theguardian.com on Tuesday 28th April 2015 08.52 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010