Profits at North Sea oil giant BP – Europe’s third-largest company by market capitalisation – fell by 23% to £1.92 billion in the first quarter of this year.
Profits were hit by a drop in the contribution from BP’s stake in Rosneft, the Russian oil company. BP, the largest foreign investor in Russia through its near 20% percent stake in the Kremlin’s state oil champion, has said repeatedly that it will stand by its investments in Russia since Moscow’s intervention in Ukraine.
The share of profits BP generated from Rosneft shrank by 75% in the quarter for two reasons – the weakening rouble as Russia’s economy comes under pressure from the standoff with the West over Ukraine, plus the absence of a tax charge boost in the previous period.
Russian production made up about a third of BP’s output in the first quarter.
The company said that ongoing provisions for costs and compensation from the Gulf of Mexico oil spill in 2010, write-offs for exploration costs – including £350 million from a decision not to proceed with a shale gas project in the USA – and lower production also contributed to its fall in profits.
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