BP scraping the barrel with $2.7bn profit

Shares in BP dropped more than 3% in early trading this morning after it posted figures showing profits plummeted to $2.7bn (£1.8bn) from $3.6bn during the same period last year.

BP – which has complained vociferously that compensation claims for the 2010 Deepwater Horizon disaster have become the Gulf of Mexico equivalent of PPI claims, ie opportunistic – said it has raised the amount it’s set aside for compensation for the disaster, from the original $7.8bn it had planned for, to $9.6bn.

It added that it had paid out $221m during its second quarter, down from $813m last year. Although the $199m it shelled out during the second quarter of 2013 was significantly higher than the $22m it paid out in the first three months of the year.

The company said lower oil prices, an ‘unusually high underlying tax rate’ of 45% and lower post-tax revenues from Russia had conspired to push down profits. Production in the country dropped by 1.5%, to 2.24 million barrels of oil a day.

In the aftermath of the Deepwater Horizon disaster, BP has shrunk, disposing of $38n of assets and selling its 50% stake in a Russian joint venture with TNK-BP to Rosneft. It’s also begun a $2.4bn share buyback programme, which it announced in March.

Most importantly, though, the company has got revenge on US contractor Haliburton, which MT reported on Friday had admitted destroying evidence which would implicate it in the Gulf of Mexico disaster. Admittedly, Halliburton’s guilty plea didn’t get the oil company off the hook – but we’d imagine corks were popping in the BP boardroom nonetheless…