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BP's 2012 net profits drop drastically

Feb 05 2013 10:50 AFP
BP gulf oil spill

(File, AP)

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London - BP said Tuesday that net profits slumped by more than half last year, hit by asset sales and after it agreed to pay billions of dollars to the US government to settle criminal charges over a 2010 oil spill.

Earnings after taxation tumbled 54 percent to $11.582bn (€8.6bn) in 2012, compared with $25.7bn in 2011, the British energy giant said in a results statement.

Replacement cost profit, which strips out fluctuations in the value of energy inventories, plunged by almost 50% to $11.993bn last year from $23.900 last time around.

The London-listed group added that it took a pre-tax charge of $4.1bn for the fourth quarter in relation to the Gulf of Mexico catastrophe, taking its total bill to $42.2bn.

Profits were also hit by the sale of BP's 50% stake in the troubled Russian joint venture TNK-BP to the main Russian oil producer Rosneft.

"We have moved past many milestones in 2012, repositioning BP through divestments and bringing on new projects. This lays a solid foundation for growth into the long term," said chief executive Bob Dudley.

"Moving through 2013 we will deliver further operational milestones and remain on track for delivery of our ten-point strategic plan, including our target for operating cash flow growth, by 2014."

The results were issued one week after a US judge approved a $4.5bn deal in which BP pleaded guilty to criminal charges from the 2010 Gulf of Mexico oil spill.

The devastating blast on the BP-leased Deepwater Horizon drilling rig on April 20, 2010 killed 11 people and unleashed some 4.9 million barrels of oil into the Gulf.

Later this month, BP will face a mammoth trial consolidating scores of remaining lawsuits stemming from the worst environmental disaster to strike the United States.

It must also still resolve a civil case on environmental fines which could amount to as much as $18 billion if gross negligence is found. It also remains on the hook for billions in economic damages, including the cost of environmental rehabilitation.

Tuesday's earnings were also published three weeks after a deadly Islamist attack on the BP-operated In Amenas gas facility in Algeria, in a hostage-taking siege that ended with the deaths of almost 40 captives, mostly foreigners.

BP stressed again that the company remained committed to Algeria. The In Amenas gas field is a joint venture between BP, Norwegian group Statoil and Algerian state-owned oil firm Sonatrach.

"We are working with our partners to assess the impact of the incident and intend to resume activities when it is safe to do so," the company added.

"BP remains committed to operating in Algeria, where we have high-quality assets and have been present for over 60 years."

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