BP Says Q4 Oil Production Slips

BP PLC, (BP) one of the world's largest oil companies, said Wednesday its oil production for the fourth quarter of 2005 would be slightly lower than the same period last year due to hurricanes in the United States.

BP also disclosed more than $1.3 billion of charges on its refining and distribution businesses.

In a trading update, BP estimated that its output had averaged 4.010 million barrels of oil equivalent per day in the three months ended Dec. 31, 2005. That figure compares with 3.824 million barrels of oil equivalent per day in the third quarter of 2005, and 4.095 million in the fourth quarter of 2004.

BP said growth in new profit centers and the completion of the planned maintenance season was partially offset by the impact of hurricanes Katrina and Rita, which cost the company around 160,000 barrels per day in production.

Bruce Evers, an analyst with Investec Henderson Crosthwaite, said BP's expected fourth quarter output was "in line with previous guidance."

But BP also said its refining output had been significantly lower in the fourth quarter due to the shutdown of its 460,000-barrel per day refinery in Texas City, Texas, on Sept. 22, ahead of Hurricane Rita.

The company had said in October it would resume production at the end of the fourth quarter of 2005. BP said it was "not putting a date (on output startup)."

BP said in its statement that "charges of more than $400 million are expected to be taken (in the quarter) as the initial tranche of a restructuring and efficiency program in Europe."

Evers said the charges on Texas City and restructuring meant there were operational weaknesses in BP's downstream business.

The company also said non-operating charges were expected to be to about $1.3 billion, primarily due to a loss on embedded derivatives as the increase in British gas prices didn't benefit BP's long-term sales contracts.

BP's shares fell 0.5 percent to 640.25 pence ($11.31) on Wednesday.