So much for Record Oil Profits

[red-beard]

From the Wall Street journal Today

BP Posts 22% Drop in Net Profit
By BENOIT FAUCON
February 6, 2007 9:45 a.m.

LONDON -- BP PLC Tuesday posted a 22% drop in net profit for the fourth quarter, hurt by lower output, declining natural-gas prices and smaller refining margins.

The major U.K. oil company said net income for the three months ended Dec. 31 was $2.88 billion, or 14.9 cents a share, compared with $3.69 billion, or 17.7 cents a share, in the fourth quarter of 2005. Total revenue slipped to $62.5 billion from $63.6 billion.

The quarterly results follow an announcement in January by BP's chief executive, Lord John Browne, that he is leaving 17 months ahead of schedule, after transforming the company into a giant profit machine from a near-bankrupt laggard during his 12-year tenure as CEO.


But his departure comes as BP is reeling from a string of U.S. investigations into a deadly Texas City, Texas, refinery blast and heavy corrosion in an Alaska pipeline. A company spokesman denied any link between Lord Brown's early exit and the investigations.

BP's fourth-quarter group result included a net non-operating charge of $152 million, compared with a net non-operating charge of $553 billion in the fourth quarter of 2005.

The 2006 figure included a $177 million net non-operating charge in exploration and production, particularly due to increases in estimated decommissioning costs associated with divested hurricane-damaged fields in the Gulf of Mexico and legal provisions.

The total was also driven by a $188 million net charge in the "other businesses and corporate" segment, primarily related to the reassessment of certain provisions, BP said.

The charges were offset by net non-operating gains in the gas, power and renewable energy businesses. The fourth-quarter 2005 net non-operating charge was largely due to changes in the value of natural-gas contracts and in accounting standards.

"The fourth-quarter result reflects the recent declines in the overall price and margin environment, as well as operational factors and increased safety and integrity investments," Lord Browne said in a statement. "We remain committed to addressing the recent operational issues while executing our strategy with discipline and focus."

BP's output averaged 3.84 million barrels of oil equivalent a day in the quarter, down 5% from 4.02 million barrels in the same period the previous year. The company said divestments and lower entitlements under production-sharing agreements had negatively affected its numbers.

BP reported in October that output from its Prudhoe Bay oil field in Alaska had returned to more than 400,000 barrels a day, after halving in August when BP discovered pipeline corrosion and a small oil spill. But BP has also said that Alaskan production gains were partially offset by weather-related delays.

Last month, BHP Billiton Ltd., BP's 44% partner in the U.S. Gulf of Mexico Atlantis development, said its share in the project's budget rose 50% to $1.5 billion. BP owns and operates 56% of the oil and gas project.

Write to Benoit Faucon at benoit.faucon@dowjones.com

[red-beard]

2005 Profit 5.8%

2006 Profit 4.6%

[rcecale]

I thought this was going to be a thread about how Hillary plans to commit robbery and just "take those profits..."



Randy

[red-beard]

Too late, they're already gone.

[Superman]

Quarterly profits of only $2.88 BILLION? Is BP taking donations? I hate to think of an oil company in the embarrasing position of earning only.......

$2,880,000,000 in three whole months.

[jluetjen]

Now compare Hillery's plan with this one...

Chavez begins to pressure foreign oil giants




Venezuela’s president Hugo Chavez

Venezuela’s president Hugo Chavez has said that his government will control all oil programmes in the Orinoco Belt by May 1st. Some people believe that Mr Chavez is using the announcement to pressure foreign oil giants into quickly signing new agreements with the government. This report from Jeremy McDermott:

Listen to the story
President Chavez is wasting no time. Just a day after congress granted him special powers he has begun turning the screws on the international oil companies. Mr Chavez was given new powers by the National Assembly to allow him to accelerate the move towards his new political and economic model, called ‘Socialism of the 21st Century’. Venezuela sits astride the largest oil reserves outside of the Middle East and the oil industry is the motor of the economy and the source of most of the government's revenue.

Mr Chavez said that part of the new socialist Venezuela will be the nationalization of natural resources. He is not planning to expel foreign companies as he needs their expertise and technology to extract and upgrade Venezuela's heavy crude, but he does want majority control of all ventures and a greater share of the profits. It remains to be seen whether the multinationals like Chevron, Exxon Mobil, and BP will give in to Mr Chavez's brinksmanship as they know he needs them as much as they need access to his oil.

[Rearden]

Originally posted by Superman
Quarterly profits of only $2.88 BILLION? Is BP taking donations? I hate to think of an oil company in the embarrasing position of earning only.......

$2,880,000,000 in three whole months.

The number by itself means nothing. You must normalize it by comparing it to sales for the period. And when you do that, it's not terribly impressive. In fact, I think Starbucks did better.

[jluetjen]

Here, let me help...



- OK, the Beta's about the same, so we're talking about similar variabilities.
- But Starbucks' most recent EPS for the quarter is lagging. But on the other hand...
- People seem pretty bullish about Starbucks' future compared to the future returns from the "Big bad oil companies".



- Looking at their growth prospects, Starbucks pretty well beats the oil companies.
- Starbucks' profitability is also comparable to the oil companies.



Maybe we should start to appropriate Starbuck's sinful and unfair profits in order to fund some government programs.

Wait!!!

I think that I've most likely got Starbucks and the oil companies in my portfolio. That's not their profits Hillery wants -- their mine!!! From an economic perspective, Hillery is proposing that she knows how to invest those profits through the government better then I do through my portfolio!

Over my dead body!

[RoninLB]

I think Exxon just had to expense $33B for new development.