BP, Europe's biggest company by market value, reported a second quarter profit fall of some 26 percent because of the lower oil price and said natural gas prices may drop further because of rising supplies of the commodity.
Net income slid to $2.04 billion, or 9 cents a share, from 2.74 billion, or 12 cents a share, assuming inventories are based on their historical cost. Oil and gas output rose five and a half percent in the quarter, in line with BP's goals, and second half growth will surpass that of the first, the Chief Executive of the group Lord Browne told journalists.
BP's result is the first from the three biggest oil companies and indicates Exxon Mobil and Royal Dutch/Shell Group will also suffer from the downturn in the oil price, after average oil prices fell by eight percent while those of natural gas lost a larger 29 percent. BP has spent about $100 billion on takeovers to expand in the important US market, where it is now the top gas producer.
“The hard work is yet to do, both in terms of costs and growth,” said Jon Wright, an analyst at HSBC, Europes largest bank by market value. “The outlook was cautious, but in this environment you have to be.”
The choice of the city of Helsinki is not incidental as the capital of Finland had hosted US-Soviet negotiations on the limitation of nuclear stockpiles in 1969