London - British energy giant BP said on Tuesday that its first quarter net profit slumped 18% due to a large accounting provision and falling output which more than offset higher oil prices.
Earnings after tax fell to $5.92bn in the three months to March from $7.25bn in the 2011 period, BP said in a results statement.
Adjusted earnings, which strip out movements in the value of inventories and other non-operating items, sank 12.8% to $4.8bn, falling short of analyst forecasts for $5.10bn, according to Dow Jones Newswires.
Revenues were up 9.0% to $96.70bn.
BP said total first quarter production fell three percent to 3.47 million barrels of oil equivalent per day, hit by asset sales that are aimed at meeting the clean-up bill for the devastating Gulf of Mexico oil spill.
The group has now sold $23bn of assets as part of its ongoing $38bn divestment programme.
BP's fortunes were ravaged two years ago by an explosion on the BP-leased Deepwater Horizon rig that killed 11 workers, sent millions of barrels of oil spewing into the sea and left it with huge compensation costs.
The blast on April 20, 2010, sparked what was been widely acknowledged to be the worst environmental catastrophe in US history.
The troubled energy major returned to profit last year with net earnings of $23.9bn.