BP Earnings Up 8.6% on Price, Production Surge

Surging crude oil prices and robust production from its Russian subsidiary pushed net profit at energy giant BP 8.6% higher in the fourth quarter.

BP earned $2.53 billion for the final quarter of 2004, up from $2.33 billion a year earlier. Revenue rose 35% to $80.7 billion from $59.7 billion.

For the full year, BP’s profit increased 50% to $15.7 billion, while revenue rose to $294.9 billion from $236.1 billion in 2003.

“Against the backdrop of strong oil demand, we have had a very successful year both operationally and financially,” Chief Executive John Browne said.

The company rewarded investors by announcing a 26% increase in its dividend to 8.5 cents.

BP said its operating profit, which excludes losses or gains from the sale of assets or termination of operations, was $3.7 billion, up from $2.9 billion a year earlier. That result included $1.1 billion in non-operating charges. If these charges are added back, the company easily exceeded analyst expectations of about $4.6 billion.

BP joined other major oil companies in benefiting from surging oil prices in the last quarter of 2004 -- Brent crude traded on the International Petroleum Exchange averaged $43.85 over the three months, more than $2 a barrel higher than in the third quarter.

BP said its production for the quarter was up more than 4% to 4,095 barrels a day, compared with a year earlier, largely because of increased volumes from TNK-BP, the firm’s Russian unit.

Total production for the year was 3,997 barrels a day, an increase of 10% on the previous year, but just short of the company’s target of 4,000 barrels.

Oil growth was achieved only with the inclusion of TNK-BP figures, with falling production from the company’s key U.S. and British assets.

BP said refining margins slipped 60 cents a barrel from the third quarter to $5.60 a barrel, but were still the highest fourth-quarter margins for at least 15 years.

BP shares rose 26 cents to $61.03 on the New York Stock Exchange.