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Tuesday, 8 August, 2000, 16:07 GMT 17:07 UK
BP's profits roar ahead
Oil rig
BP's profits are gushing, thanks to rising oil prices
Oil giant BP has announced a giant surge in profits for the first six months of this year, as its recent mergers with Arco and Amoco begins to bear fruit.

The company saw its profits jump 175% to 5.5bn in the first half of this year, compared with 2bn in the corresponding period of 1999.

The leap in profits comes as BP is one of a number of oil companies being criticised by UK consumer groups for the recent sharp rises in petrol prices.

BP said the increase was largely due to its recent mergers with the US giant oil company Amoco, with Arco and the takeover of Burmah Castrol, which it completed in July.

Productivity growth

Executives said the oil giant, which recently announced a new, more environmentally friendly image, would help it improve its productivity and bottom line.

"The combination of BP, Amoco, Arco, Burmah Castrol and all the other elements of the new BP gives us the chance to go beyond our previous targets, and to deliver higher levels of total productivity," chief executive John Browne said.

BP plans to boost oil production by between 4% and 5% each year and gas output by between 8% to 10%. it also want to see underlying earnings growth of at least 10% a year.

But analysts said the company had to assure investors that it could cut costs and maintain growth in times when the oil price is not soaring to new highs, unlike at the current time.

Oil price helps

"Everybody expects that oil companies do well in an environment of oil at $27 or $28 (a barrel). Going forward, BP has the issue to address of growth.

"For the last few years it's been cutting costs. It's turning towards growth and we want to see more emphasis on that," said Tim Rees, director of UK equities for Clerical Medical.

BP is the last of the three oil giants to report its earnings figures.

Exxon Mobil announced a 123% jump in second quarter earnings two weeks ago, while Royal Dutch/Shell Group posted a 95% jump in profits last week.

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See also:

24 Jul 00 | Business
BP goes green
12 Jun 00 | Scotland
BP launches refinery review
09 May 00 | Business
BP Amoco profits soar
14 Apr 00 | Business
Green light for BP-Arco merger
14 Mar 00 | Business
BP buys Burmah Castrol
21 Jun 00 | Business
The impact of high petrol prices
08 Aug 00 | Business
Oil market seeks direction
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