BP's profits rise 135%

Oil giant BP today said profits hit 5.6 billion US dollars (£3.6 billion) in the first three months of 2010 - more than double the level last year.

The 135% profits rise comes after the price of crude oil was pushed higher by recovery hopes for the global economy and due to market speculation.

While good news for the profits of the oil majors, the surge in crude and the weaker pound have hit motorists, with average petrol prices now at record highs.

Today's results compare with the nadir of the recession in the first quarter of 2009, when crude prices averaged just over 41 dollars a barrel, although a year later this figure stands at an average 76 dollars.

BP's performance was much higher than City forecasts after profits in exploration and production nearly doubled to 8.29 billion dollars (£5.36 billion).

In a recent strategy update, BP said it would begin production on 42 major projects worldwide over the next five years as existing fields decline, and boost profits by taking more costs out of the business.

In refining and marketing, where margins have been squeezed due to over capacity, first quarter profits fell 33% to 729 million US dollars (£471.6 million), although the figure was higher than the previous three month period.

The oil major's recent performance has been overshadowed by last week's explosion at the BP-operated rig, Deepwater Horizon, in the Gulf of Mexico.

Eleven of the 126 workers on board at the time are missing and presumed dead, while oil is leaking from the sunken rig and spreading towards the US coast.

Last night, the oil slick covered an area 48 miles long by 39 miles wide. BP has mobilised two rigs to drill a relief well if needed, which could help redirect the oil, but the work could take weeks to complete.

The Deepwater Horizon, owned by Transocean and operated by BP, was drilling about 40 miles off the delta of the Mississippi River when it exploded.

BP chief executive Tony Hayward said improved weather conditions were helping the recovery effort.

"This, combined with the light, thin oil we are dealing with has further increased our confidence that we can tackle this spill offshore," he added.