Cheaper oil hits BP profits

Lord Browne: Opec curbs are the 'critical' issue

Falling oil and gas prices have led to a drop in profits for the oil giant BP.

The critical issue, as we look forward, is whether Opec will curb that output sufficiently to pull the crude price back within its target range

Lord Browne, BP Chief Executive

The company saw profits for the three months to the end of September slip 20%, as prices were hit by the slowdown in demand for oil and gas.

BP's chief executive Lord Browne called on the Opec group of oil producing nations to cut output and so boost prices.

"Oil prices have softened as demand has weakened, particularly for aviation fuel, after the tragic events of 11 September, while Opec has continued to produce beyond its quotas," he said.

"The critical issue, as we look forward, is whether Opec will curb that output sufficiently to pull the crude price back within its target range."

Sector suffers

BP is just the latest oil company to see its profits suffering from weaker prices.

US firms ExxonMobil and ChevronTexaco have already reported a fall, and last week they were joined by the Anglo-Dutch oil giant Shell.

BP posted profits of $3.05bn (£2.1bn) for the last quarter, compared to profits of $3.8bn (£2.6bn) for the same period last year.

The figure was in line with analysts forecasts.

Despite the fall in profits for the quarter, profits for the nine months to September were up to $10.9bn (£7.5bn) against $10.1bn (£6.97bn) in 2000.

Lord Browne said the company remained upbeat despite the tough trading conditions currently being experienced.

"Despite a weaker world economy, BP continues to deliver great profits and great growth," he said.

"Our plans are robust to the poorer trading environment and we will continue our established approach to cost management and investment selection."

By the close of trade on Tuesday, BP's shares had slipped 18.5p to 541.5p, a fall of 3.3%.