By JANE WARDELL AP Business Writer
LONDON Oct 24, 2006 (AP)— BP PLC reported a 3.6 percent drop in third-quarter profit on Tuesday because of lost production in Alaska, higher taxes in Britain and a slump in refining margins.
BP, which has experienced a run of difficulties in the United States, said net income for the three months ended Sept. 30 came to $6.23 billion, compared with $6.46 billion in the third quarter of 2005. Revenue in the third quarter climbed 4 percent to $70.7 billion.
Production for the period averaged 3.8 million barrels of oil equivalent per day, down 0.2 percent from the year-ago period and down 5 percent from the second quarter this year.
BP is the first of the major oil companies to report earnings this week. Chevron Corp., ConocoPhillips, Exxon Mobil Corp. and Royal Dutch Shell PLC are all expected to unveil strong profit growth, but analysts say earnings in the sector have passed their peak after a substantial recent slump in gasoline prices.
The results from BP reflected the London-based company's woes in the United States, where several of its fields experienced outages and delays.
The company halved production at its Prudhoe Bay field in Alaska after severe pipeline corrosion and a small leak were uncovered. Production has now reached 400,000 barrels per day, double the low point but still below the previous average of 450,000 barrels per day.
It has also delayed the opening of its Thunder Horse platform in the Gulf of Mexico damaged by Hurricane Dennis last year from 2007 to the middle of 2008 because of equipment failures.
The platform is the largest in the Gulf and is expected to produce about 240,000 barrels of oil and 200 million cubic feet of natural gas per day.
As well as its U.S. production troubles, BP was faced with higher taxes in Britain's North Sea and lower refining margins.
"The trading environment reflected higher oil realizations and retail margins but lower refining margins and gas realizations compared to a year ago," said Chief Executive John Browne.