Oil giant BP swings into profit

London - British energy major BP on Tuesday announced net profit of $4.295bn for fourth quarter 2009 after a loss a year earlier as it ramped up production and slashed costs.

BP, which recently overtook Royal Dutch Shell to become Europe's biggest energy group by market value, posted a loss $3.34bn in the final quarter of 2008 owing to tumbling oil prices.

Group chief executive Tony Hayward said 2009 had been "one of the best years for BP and its shareholders" in recent times.

"But we are not resting on our laurels. There's a lot more to be done," added Hayward, who has overseen a major cost-cutting programme and increase in BP's oil output since becoming chief executive in mid-2007.

BP said in an earnings statement that net profit dropped almost 22% to $16.578bn for all of 2009 from $21.7bn in 2008.

Stripping out exceptional items and changes to the value of oil inventories, BP's profit soared 68% to $4.38bn in the fourth quarter. However it missed analyst expectations of profit totalling $4.7bn, leading to a 4% drop in BP's share price in early London trading.

Energy production meanwhile rose 4% to 3.998 million barrels of oil equivalent a day in 2009.

"The increase in production was well ahead of the company's expected long-term average growth rate of 1%-2% and reflected the ramp-up and start-up of major new projects, including the first full year of production from the Thunder Horse field in the US Gulf of Mexico," BP said.

Cash costs for 2009 were more than $4.0bn lower compared with 2008.

"Reducing the underlying cost structure of the group remains a management priority in 2010," BP said.

"The company's drive to streamline and simplify its business, begun in late 2007, has, in addition, resulted in a net headcount reduction of around 7 500."

Hayward made it a key priority to slash BP costs after replacing disgraced John Browne as chief executive nearly three years ago. Previously, Hayward had been head of exploration and production at BP.

Browne, who had transformed BP into the world's third-largest energy group, was forced to quit as chief executive after revelations that he lied to a High Court judge over how he had met his gay partner of four years.

On Monday meanwhile, the world's biggest energy company ExxonMobil said its fourth-quarter profit fell 23% from a year ago to $6.05bn, beating market expectations.

The results brought full-year 2009 profits to $19.3bn including special items, a sharp 57% drop from the all-time US profit record of $45.22bn a year earlier for the largest US oil company.

The results reflect in part the massive drop in global energy prices from record levels in 2008, which had pushed up the profits of ExxonMobil and others to stratospheric heights.

Crude oil, which surged to a record $147 a barrel in July 2008, plunged under $34 a barrel in February 2009 as the global economic downturn hit demand for energy. They are currently trading around $70.

- AFP