Cost-cutting boosts BP

BRITISH PETROLEUM, fuelled by cost-cutting, currency gains and the benefits of a milder petroleum revenue tax regime, lifted replacement cost profits by 51 per cent to pounds 339m in the third quarter, writes Terence Wilkinson.

Last year BP halved its dividend and embarked on a pounds 1bn restructuring programme to cut 11,500 jobs and dispose of unwanted assets.

David Simon, chief executive, who took over from Bob Horton in the summer of 1992, said that the programme of disposals and profit improvement was six months ahead of schedule.

Some dollars 2.4bn had been raised from disposals in the first nine months of 1993 against a target of dollars 1.5bn for the year. Cash flow before exploration spending was positive in the third quarter for the first time since 1991.

The interim dividend is unchanged at 2.1p. Mr Simon said the board would re-examine dividends when its targets for profits and debt had been met.

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