BP's soaring profits overshadowed by oil rig tragedy

27th April 2010, Comments 0 comments

British energy giant BP said Tuesday that first-quarter profits rocketed on higher oil prices but admitted that the news was overshadowed by last week's tragic accident at a rig in the Gulf of Mexico.

Europe's biggest oil company said net profit rocketed 137 percent to 6.08 billion dollars (4.5 billion euros) in the three months to March compared with the same period in 2009.

Adjusted net profit on a replacement cost basis soared 135 percent to 5.6 billion dollars.

The replacement cost figure, which excludes the effect of changes in the value of oil and gas inventories, is closely watched by the market and compared with market expectations for profits of 4.81 billion dollars.

Production in the three months period was little changed at 4.01 million barrels of oil equivalent per day.

BP Chief Executive Tony Hayward, in an email to staff, acknowledged that the strong results have been overshadowed by the "tragic accident" and continuing oil spill from a BP well in the Gulf of Mexico.

The Deepwater Horizon oil rig, operated by BP and owned by Transocean, sank last Thursday -- two days after a massive explosion left 11 workers missing and presumed dead.

"We are going to do everything we can -- firstly, to control the well; secondly, to ensure there is no serious environmental consequence; and thirdly, to understand how this has occurred and ensure that it never occurs again," Hayward said in the email, obtained by AFP.

He expressed "tremendous sorrow" when it became clear that the missing workers had probably died.

"I'm sure, like me, you have all experienced a whole range of emotions over the course of the last week," he told BP staff.

"Shock and, indeed, anger that the accident could happen. Tremendous sorrow when it became evident that the 11 people missing had probably died in the initial explosion.

"And great sorrow and sympathy for the families and friends of those who lost their lives."

Hayward, who has been in the United States since late last week because of the incident, added: "We have a great team in the Gulf of Mexico leading this response.

"I have every confidence that we are doing everything in our power to contain the environmental consequences of this incident."

BP deployed robotic underwater vehicles on Monday to try to cap the leaking well and prevent a growing oil slick from developing into an environmental disaster.

Satellite images showed the slick had spread by 50 percent in a day to cover an area of 600 square miles (1,550 square kilometers), although officials said some 97 percent of the pollution was just a thin veneer on the sea's surface.

The group has dispatched skimming vessels to mop up the oil.

© 2010 AFP

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