International super-major, BP, has announced that underlying replacement cost profit has fallen $900 million over a 12-month period from $3.6 billion in the second quarter of 2012, to $2.7 billion at the end of the second quarter of 2013.Â
BP stated that the reported post-tax result was adversely affected by lower oil prices, an unusually high underlying effective tax rate of 45%, compared to 35% a year earlier, largely due to the impact of the stronger dollar on a basket of currencies; and lower post-tax income from Russia, driven by rouble depreciation and the lagging effect of Russian oil export duty, which has a disproportionate effect in periods of falling prices.Â
A report by Bloomberg stated that the company’s report missed the $3.4 billion average estimate of 13 analysts in a Bloomberg News survey.Â
The company also stated that operating cash flow in the quarter was $5.4 billion, a $1 billion climb from the same period last year.
“The results show strong underlying pre-tax performance from BP’s businesses. We are seeing growth in production from new high-margin projects and are making good progress in exploration and project delivery,” said Bob Dudley, BP Group Chief Executive.
BP’s Upstream segment reported pre-tax underlying replacement cost profit of $4.3 billion compared to $4.4 billion in the same period last year, with increasing production from new high-margin projects largely offsetting the impact of divestments.
The company expects that upstream production in the third quarter is expected to be lower as a result of planned seasonal turnaround activity and continuing divestment impacts, again partly offset by increasing production from new projects.
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