BP still waiting for the gasman

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The Independent Online
MARY FAGAN

Industrial Correspondent

BP beat lower oil prices and problems in the chemicals market to come in with replacement cost profits of pounds 532m in the third quarter of the year, an increase of 28 per cent over the same period in 1994.

The results were at the top end of City analysts' expectations, underlining BP's strong position after struggling back from the crisis days of 1992.

The dividend was increased to 4p from 2.5p previously, bringing the total for the nine months to 11p. The shares closed unchanged at 469p.

David Simon, chairman, said: "This is top-of-the-league performance. It is a choppyish environment but we are com- fortable with our position in it. We are confident we can maintain our competitive position and we are seeing more and more opportunities for growth."

Mr Simon said that BP's "self-help" strategy of improving efficiency, extending the range of products and reducing costs continued to bear fruit. The company has taken $300m out of the cost base so far this year and plans to cut a further $100m in the fourth quarter, and $300m in 1996.

BP was showing a trend towards "disciplined growth", but would not be ready to talk about the next phases of its expansion until next year.

It also emerged that British Gas has failed to request a meeting with BP, one of the largest North Sea producers, to re-open long term contracts in spite of a public row over gas prices and terms. British Gas has been calling for government support to help renegotiate contracts with a range of producers, which it claims are forcing it to take hundreds of millions of pound worth of gas it cannot yet sell.

The debacle over contracts came to a head last month when Clare Spottiswoode, the gas regulator, warned that the problem could have serious consequences for British Gas. But John Brown, BP chief executive, said yesterday: "We have had no written request from British Gas for any renegotiation nor have we had any formal discussions. Our position is that contracts are contracts and it is important we have regard to the value of those contracts for our shareholders."

Mr Simon said, though no approach had been made, BP would be willing to talk about it. It is thought BP is taking about pounds 10m a quarter from British Gas under "take or pay" deals for gas for which there is no market.

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