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Oil producer BP reported a bigger-than-expected drop in profits on Tuesday, despite an increase in crude prices, as production fell after it was forced to sell fields to pay for the Gulf of Mexico oil spill.
London-based BP added it would continue its disposal program, putting some smaller fields in the Gulf of Mexico on the block. A spokesman said the group was not pulling back from the area but was seeking to focus on larger fields there.
Europe's second-largest oil group by market value said its replacement cost (RC) net profit was $4.93 billion in the quarter, compared to $5.61 billion in the same period last year.
BP said oil and gas production, excluding its Russian joint venture, TNK-BP, was down 6 percent at 2.45 million barrels of oil equivalent per day.
The company said tough conditions in the refining business led to a drop in profits at its downstream unit.
Stripping out one-off items such as the profit on asset sales, the result was down 13 percent to $4.80 billion, below an average forecast of $5.10 billion from a Reuters poll of nine analysts.
Royal Dutch Shell Plc last week reported a 16 percent rise in underlying profits, while U.S. rival ConocoPhillips reported a 1 percent drop and industry leader Exxon Mobil reported an 11 percent drop.
Brent crude prices averaged $118.60 per barrel last quarter, up from $105.43 in the same period a year before.
RC earnings strip out unrealized gains or losses related to changes in the value of inventories, and as such are comparable with net income under U.S. accounting rules.