The international oil company (IOC) BP has announced that the low oil and gas prices coupled with a global slump in demand has seen year-on-year first quarter profits fall by 62%.
The British energy company released quarterly results stating net profits for the first quarter of 2009 had dropped from US$7.1 billion in 2008 to $2.56 billion in 2009.
The drop in oil prices has played a major role in the profits slump. BP said that the average price of each barrel of oil it sold was $41.26 this year, compared to the $90.92 per barrel it enjoyed in 2008.
The company’s gas sales were also affected. BP sold gas at $3.63 per thousand cubic foot in 2009, compared to $5.88 last year.
BP’s petrochemicals division also suffered an 11% decline in profits due to the slump in both demand and price for its products.
However, on the positive side the drop in profits was not as bad as many forecasters had been predicting and the energy giant also announced that production costs were down by 11%. Another positive was that BP increased production by 4% and expected volumes to increase further as 2009 progressed.Â
Â
