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BP makes efforts to cut costs

BP makes efforts to cut costs
BP Plc (BP.L) missed analysts' forecasts with a 24 percent drop in fourth-quarter replacement cost net profit to $2.59 billion, due to a collapse in oil prices and a big loss at its Russian unit.

BP Plc (BP.L) missed analysts' forecasts with a 24 percent drop in fourth-quarter replacement cost net profit to $2.59 billion, due to a collapse in oil prices and a big loss at its Russian unit.

BP Plc (BP.L) missed analysts' forecasts with a 24 percent drop in fourth-quarter replacement cost net profit to $2.59 billion, due to a collapse in oil prices and a big loss at its Russian unit.

Chief Executive Tony Hayward said the oil major was responding to weaker crude prices by intensifying his efforts to cut costs and jobs, echoing similar comments rival Royal Dutch Shell Plc (RDSa.L) made to staff last week.

"The mantra in BP today is: "Every dollar counts, every seat counts'," the CEO said in a statement, adding BP would exceed its target of cutting 5,000 job by the middle of the year.

BP shares fell 4.1 percent to 465 pence at 0915 GMT, underperforming a 1.5 percent drop in the DJ Stoxx European oil and gas sector index .SXEP.

"BP's Q4 results were fairly uninspiring," Richard Griffith, oil analyst at Evolution Securities said in a research note.

BP's full year replacement cost profit, which strips out unrealized gains or losses related to changes in the value of inventories, was $25.6 billion, up 39 percent compared to 2007.

Oil prices plunged in the fourth quarter but the ramp-up to a peak above $147/barrel in July ensured record annual results for Europe's second-largest listed oil company by market value.

The results include a loss of $700 million from the company's Russian venture TNK-BP, related to the effect of lagged tax charges, lower oil prices and asset impairment charges.

Oil and gas production rose 1 percent in the quarter compared to the same period in 2007, up to 3.945 million barrels of oil equivalent per day (boepd).

Full-year output rose to 3.84 million boepd from 3.82 million in 2007, after two years of falling production.

Hayward said he expected output to grow in 2009 and for BP to have replaced all the oil it pumped in 2008 with new finds, though exact reserve replacement figures were not published.

BP expects to hold investments

BP expects to hold investments in drilling and project development steady in 2009, Hayward said, following the trend among the very largest oil companies, which contrasts with big spending cuts across the rest of the sector.

Organic capital expenditure (capex) is forecast to be $20-22 billion this year, compared to $21.7 billion in 2008.

Excluding non-operating items that amounted to a net charge of $18 million, fourth-quarter net profit was $2.605 billion compared to an average forecast of $2.98 billion in a Reuters poll of 6 analysts.

The result compared with a year-on-year 29 percent drop in fourth-quarter profits at Shell and a 33 percent drop at Exxon Mobil (XOM.N) Corp, the world's most valuable listed oil company.

www.TurkishMaritime.com.tr

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