Profits at BP slump by half in downturn

OIL giant BP yesterday said that second quarter profits had slumped by more than half as it continued to suffer from falling energy demand and a weak oil price. <br /><br />According to the replacement cost profit measure &ndash; which strips out gains or losses related to any changes in the value of its fuel stocks &ndash; the firm&rsquo;s profits fell to $3.14bn (&pound;1.91bn), a 53 per cent drop on the same period in 2008. <br /><br />Underlying net profit was $2.9bn, down 66 per cent on the second quarter last year. <br /><br />&ldquo;We are in turbulent times, volatile and uncertain. But we continue to steer a steady course through choppy waters,&rdquo; chief executive Tony Hayward said.<br /><br />A drop in the price of oil and gas has hit all oil companies, including rival Shell, which puts out its second quarter results tomorrow.<br /><br />But BP, which began pruning its business before its rivals, said its cost-cutting drive and production in oil and gas were both progressing well. <br /><br />It has made over 5,000 job cuts, and said it has already met its targeted savings for the year of $2bn <br /><br />The group added that it expected to hit $3bn of savings by the end of 2009.<br /><br />Finance costs and expenses relating to pensions and other post-retirement benefits were $321m for the second quarter, compared to $221m for the same period last year.<br /><br />Meanwhile, BP&rsquo;s Russian joint-venture TNK-BP International said its net profit more than halved to $2bn in the first six months of 2009 as lower oil prices offset an increase in production.<br /><br />Its first-half revenues fell to $14.5bn from $28.3bn a year earlier. Earnings were $3.8bn, compared with $7.6bn in the year before.