BP suffered a fresh setback yesterday after announcing a sharp fall in third-quarter production because of the troubles at its Prudhoe Bay field in Alaska.
Output in the three months to the end of September, excluding the contribution from its TNK-BP joint venture in Russia, fell 5.6 per cent to 2.85 million barrels a day - the fifth quarter in a row when production has declined.
Total oil and gas production for the period was 0.6 per cent lower at 3.8 million barrels a day. The decline in output came despite the absence of the hurricanes in the Gulf of Mexico which affected production in the third quarter of last year.
BP warned last month that the start of production at its giant Thunder Horse field in the Gulf of Mexico would be delayed by two years because of safety reasons. The field had been due to come on stream this summer, pumping 250,000 barrels of oil and 200 million cubic feet of gas a day. But BP said that it did not now expect production to begin until the middle of 2008 because of metallurgical failures on undersea parts of the platform.
Refining margins also fell sharply in the third quarter, compared with the second and with a year ago.
BP's woes were further compounded by a fresh decline in the oil price which fell to an eight-month low below $58 a barrel yesterday. News that Kuwait is considering join ing fellow Opec members Nigeria and Venezuela in cutting oil output was outweighed by an unexpected jump in crude stock piles in the US.
Shares in BP, which dropped by as much as 2 per cent after the third-quarter update, rallied to close marginally higher.
BP said it would nevertheless benefit from the higher oil prices achieved in the quarter which averaged $69.60 against $61.63 in the same period last year. A $2bn one-off gain due to asset sales will also help BP's third-quarter figures.Reuse content