U.S. News

BP's Q4 Oil and Gas Output Falls, Margins Narrow


Oil major BP said on Tuesday its production of oil and gas fell in the fourth quarter of 2006 compared to the previous year, undershooting analysts' forecasts, and added that refining margins narrowed.

BP said in a statement it expected fourth quarter production to drop to around 3.82 million barrels of oil equivalent per day (boepd), as asset sales, natural field declines and a mild winter in the northern hemisphere outweighed the impact of new field start ups.

The London-based oil giant produced 4.022 million boepd in the fourth quarter of 2005.

Analysts at banks UBS, Citigroup, SG and Investec had forecast fourth quarter production of about 3.9-4.0 million boepd.

One analyst said he expected BP's shares to open slightly lower on the bigger-than-forecast production drop.

BP said refining margins fell around 17% compared to the same period in 2005 to $6.30 per barrel, below forecasts of around $6.90.

However, BP indicated it would pay less tax than analysts expected, with its tax rate for the quarter now expected to be around 25%, compared to 33% in the same period of 2005.