BP Earns $3.8 Billion

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BP Earns $3.8 Billion

08/08/2001
BP Plc, operator of more than 3,500 Connect, Split Second and am/pm convenience stores, boosted second-quarter net income by 5 percent to $3.80 billion on higher gasoline prices and strong refining margins.

BP's refining and marketing business showed the strongest growth, with operating profits jumping 27 percent to $1.76 billion, compared to $1.39 billion a year ago, Reuters reported. BP credited the growth to higher refining margins, the acquisition of its Burmah Castrol lubricants unit and cost savings at Los Angeles, Arco, which BP bought last April.

For the first half of the year, BP earned $6.67 billion compared to $5.36 billion in 2000. Excluding special charges, the group's operating profit for the three months ending June 30 rose to $3.13 billion from $2.81 billion.

Quarterly operating profit in exploration and production -- BP's largest business -- increased by 8 percent to $3.92 billion in the second quarter, up from $3.63 billion in the previous year. The improvement reflected an 11-percent rise in natural gas production, higher North American gas prices and lower exploration expense, BP said.

Chief Executive Sir John Browne said profit margins in refining were likely to narrow in coming months as product inventories rise, while chemicals margins would remain depressed due to weak demand and excess production capacity.

The oil market "remains essentially balanced," Browne said, adding that consumption is expected to recover in the autumn as seasonal needs for heating oil increase.