Quiet hurricane season helped production at BP

OIL major BP hailed a "very good" 2009 despite missing City profits forecasts for the final three months of the year.

The firm, which saw annual profits slump by almost half amid lower oil prices, said its final quarter surplus rose 33 per cent to $3.45bn (2.16bn).

But BP shares slid 3.8 per cent to 572p as its quarterly numbers failed to hit market forecasts. The firm has seen a jump in production over the year, but its refining business was hit by "extremely weak trading conditions", particularly in the last months of 2009.

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Chief executive Tony Hayward said the firm had exceeded many of its own expectations during the year, despite the global economic downturn.

He said recovery in the major economies of the US and Europe was expected to be "slow and gradual".

While he saw stability in the oil market because of the actions of cartel Opec, he warned gas markets were predicted to remain volatile and refining margins would remain depressed for the foreseeable future.

BP has its Dimlington gas terminal in East Yorkshire, as well as a chemical plant at Saltend, near Hull. It is building a 25m biofuel development and demonstration facility nearby. BP reported a full-year surplus of $13.96bn (8.75bn) in the year to December 31 – down 45 per cent on 2008.

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Oil prices slumped in 2009 from their peak of $147 a barrel during the previous year.

BP said a lack of a significant hurricane season helped a four per cent growth in production in 2009.

As a result it expects 2010 to be at a lower level, but the firm said its long-term production guidance was unchanged at between one and two per cent.

The increased production was particularly helped by the mild season in the Gulf of Mexico, resulting in relatively few disruptions to oil and gas production.

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The firm's major new Thunder Horse field saw its first full year of activity in the region in 2009.

During last year, BP said it gained access to "significant" new production sites, such as the Rumaila oilfield in Iraq, which it said was "one of the great oilfields in the world".

But while upstream production was strong in the year, BP has seen a steep reduction in profits from its downstream refining business, where weak demand has hammered margins.

Profits for the full year were $743m (465.5m), compared with $4.18bn (2.62bn) in 2008.