BP sees profits drop by 12%

London, United Kingdom (AHN) – Oil giant BP reported its first quarter profits were down by 12 percent to $4.8 billion compared to $5.6 billion for the same period a year ago.

Part of the drop in profits comes from BP selling some of its fields after the disastrous oil spill in the Gulf of Mexico in 2010 at the Deepwater Horizon oil rig. The explosion killed 11 workers and the subsequent uncontrollable gushing of oil for several months resulted in the worst offshore spill in United States history.

BP had paid $16.6 billion into a trust fund. It expects to reach the target amount of $20 billion about one year earlier than it had originally planned.

Other factors dragging down BP’s bottom line included a decrease in oil and gas production. BP said its production had dropped by around 6 percent to 2.45 million barrels of oil per day.

However, its net profits were helped by the fact that oil prices were higher for this quarter than the same period last year with Brent crude prices averaging $118.60 a barrel, compared with $105.43 a year ago. That increased BP’s revenue by 9.3 percent to $96.7 billion.

Total charges for the Gulf of Mexico spill reached $37.2 billion at the end of the first quarter. However, BP still has not admitted liability. Moreover, it still faces claims from the US federal government as well as affected state governments and drilling firms.

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