BP improves but strategy disappoints

Kasmira Jefford
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SHARES in BP fell yesterday after chief executive Bob Dudley’s strategy for delivering growth failed to reassure investors and quarterly profits fell short of expectations.

The oil giant announced replacement cost profits of $5.6bn (£3.1bn) for the quarter, an increase of 13 per cent on figures last year, excluding multi-billion dollar losses linked to the Gulf of Mexico oil spill.

Despite a rebound in profits, however, shares slumped 2.56 per cent to 463.25p as investors and analysts said they were still unclear of BP’s road to recovery.

Dudley (pictured) sought to address concerns yesterday, saying that he understood “investors’ impatience” with the company’s lagging share price, but reiterated that BP’s priority was to consolidate it financial position and take steps to restore its value.

The company has so far agreed $25bn worth of divestments and aims to achieve $30bn by the end of 2011. It said it was making progress on the sale of its Texas City and Carson, California plants.

Dudley also added that plans to double exploration spend and add new reserves would help drive performance in 2012.

Production for the quarter also disappointed, falling 11 per cent compared with the same period last year, due to its asset disposals and ongoing drilling suspensions in the Gulf of Mexico.

He played down talks of breaking up the company, although some analysts argue that it would be the best path to restoring BP’s faltering share price.