UK oil company BP has reported a 17% decline in profits during the first three months of this year.
BP has already warned that its oil production will fall this year
BP said first-quarter replacement cost profit was $4.36bn (£2.2bn), down from $5.27bn a year earlier.
Earnings have been affected by lower oil and gas prices on the world market, and the higher cost of finding and exploiting reserves, BP said.
Profit was also hit by higher safety costs following a fatal explosion at its Texas City refinery in 2005.
Analysts said that most of Europe's largest oil companies would probably report lower earnings in the first quarter because of the decline in oil and gas prices compared with the same period last year.
Anglo-Dutch oil company Royal Dutch Shell is due to release its earnings figures at the start of May.
BP has already warned that its oil production is set to fall slightly this year.
The company said on Tuesday that oil production dipped 3% to 3.91 million barrels of oil per day during the first three months of 2007.
Last year, the company forecast that production would be between 3.8m and 3.9m barrels of oil per day, compared with 3.93m in 2006.
Last year, BP's earnings last year were boosted by record gas and oil prices, which had raised concerns among both economists and consumers.
Since then, however, gas prices have dropped by almost a third and crude oil is down by more than 6%, the company said.
BP said it would pay a quarterly dividend of 10.325 cents per share.
BP shares fell 1.5% in trading in London.