BP profits fall by 45%

• Oil company hit by cheaper energy prices and lower refining margins in 2009
• BP chief executive sees 'slow and gradual' economic recovery in US and Europe

• Katie Allen
• guardian.co.uk,
  
• Tuesday 2 February 2010 08.10 GMT
• Article history

BP has reported a sharp drop in profits in 2009 as it grappled with cheaper energy prices and squeezed margins on refining.

The oil company said underlying profits in the fourth quarter rose 70% on a year earlier to $4.4bn (£2.75bn), but that missed the City's forecasts. The year as a whole suffered a 45% fall in profits to $14bn.

BP's Thunder Horse platform before it was towed to the US Gulf of Mexico. The platform came online this year Photograph: Michelle Christenson/AP

Still, BP sought to flag up a stronger-than-expected 4% rise in oil and gas production in 2009 thanks to the start-up of new projects, including the first full year of production from the Thunder Horse field in the US Gulf of Mexico.

In a statement, Tony Hayward, the chief executive, said that BP had still exceeded many of the aims he had set out at the start of 2009 and described it as a "very good" year overall.

He said BP expects recovery in the major economies of the US and Europe to be "slow and gradual". While oil markets look well supported by Opec, BP expects gas markets to remain volatile and refining margins to remain depressed for the foreseeable future.

"2009 has been one of the best years for BP and its shareholders since the merger with Amoco [in 1998]. But we are not resting on our laurels. There's a lot more to be done," said Hayward.

BP's results echo news on Monday from ExxonMobil, the world's largest publicly traded oil company, that profits slumped to $19bn in 2009 from $45bn as it too battled against declining margins at its refineries and weaker demand for fuel in recession-battered economies.