Royal Dutch Shell Group .com Rotating Header Image

The Observer: BP will come close to profit record despite bad news

Oliver Morgan, industrial editor
Sunday February 4, 2007

Oil giant BP is expected this week to come within a whisker of its highest ever annual profit.

However, while arch rival Shell posted its biggest total to date – $25bn (£13bn) – last week, disappointing production levels and slimmer refining and marketing margins are likely to hit BP’s figures.

Analysts expect fourth-quarter earnings of around $3.8bn, giving year-end figures of some $21.3bn.

As for other companies, the results could be a highwater mark for BP as oil prices are expected to come down in 2007 and 2008.

BP has been hit by a raft of bad news in the past two years. Most recently, it was the subject of a highly critical report into the explosion at a US refinery in Texas City which killed 15 people. It has also suffered production disruption in Alaska after pipelines were shut down.

Production in the fourth quarter is expected to have fallen back, thanks to further disruption in Alaska and disposal of some operations in Russia. Refining margins slumped by as much as 25 per cent and US gas prices were weak.

Analysts will ask for more details on the hand-over from the old guard at BP. With Lord Browne, current chief executive and architect of its rapid growth in the late Nineties, to be replaced by Tony Hayward, formerly head of exploration and production, attention is likely to fall on chairman Peter Sutherland.

Sutherland recently said he wanted to stay on well beyond Browne’s departure to ensure stability during the hand-over.,,2005280,00.html and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

Comments are closed.

%d bloggers like this: