BP profit spurts higher

August 7, 2001 Posted: 1043 GMT

LONDON (CNN) -- BP, the world's third-largest publicly traded oil company, said second-quarter profit rose 5.2 percent, in line with market expectations.

Excluding one-time items, net income on a replacement-cost basis rose to $3.8 billion, or $16.92 a share, in the three months to June 30, from $3.6 billion, or $16.54 a share, a year earlier.

The company said it is on track to meet its own growth targets this year. It has previously said it aims to raise oil and gas output by 5.5 percent to 7 percent a year.

"The first-half results reflect the generally favourable trading environment... compared to a year ago," BP said. "Strength in refining margins and gas prices largely offset weakness in the chemicals environment."

The London-based company said second-quarter profit at its exploration and production business, also known as "upstream" operations, rose 8 percent to $3.92 billion from $3.63 billion in the year earlier period.

That reflects an "11 percent increase in gas production, higher North American gas prices and lower exploration expenses," BP said.

Exxon Mobil (XOM: Research, Estimates), the biggest oil company, last month posted a jump in profit to $4.38 billion, or 64 cents a diluted share, excluding one-time items. It to benefited from an improvement in margin and higher U.S. natural gas prices, brought on by a shortage at refineries.

BP unexpectedly raised its quarterly dividend to 5.5 cents from 5.25 cents.

Chief Executive John Browne, who has splashed out more than $100 billion on acquiring Amoco, Arco and Burmah Castrol, since taking up the reigns at BP in 1995, said: "Our disciplined approach to cost management and investment selection is delivering profitable growth.

"I am especially delighted with the growth in oil and gas production and the quality of the downstream performance. All of this has given us the ability to increase the dividend,"  Browne said.

Its Refining and Marketing, or downstream business, saw profit jump 26 percent to $1.76 billion from $1.39 billion, in the year ago period, on higher refining margins, the acquisition of Burmah Castrol and consolidation of its fuels business.

Shares in BP rose 1.2 percent to 583 pence in midday London trade.

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