BP's profit drops by 20 pct on lower oil prices

BP, a Britain-based oil giant, Tuesday announced that its underlying replacement cost profit for the first quarter of 2015 was 2.6 billion U.S. dollars, down by 20 percent from the same period last year, as it was hit by the low oil and gas prices over the period.

Underlying replacement cost profit is adjusted for non-operating items and fair value accounting effects.

The oil company's upstream segment reported underlying pre-tax replacement cost profit of 600 million dollars for the first quarter of 2015 compared with 4.4 billion dollars for the first quarter of 2014, said BP in a statement.

Overall oil and gas production, including Russia, was 3.3 million barrels of oil equivalent a day (mmboe/d). Excluding Russia, reported upstream production of 2.3 mmboe/d was 8.3 percent higher than a year earlier and underlying production 3.7 percent higher, data showed.

BP's operating cash flow for the quarter was 1.9 billion dollars compared with 8.2 billion dollars a year earlier. At the end of the quarter, the group's net debt was 25.1 billion dollars, data also showed.

Bob Dudley, BP group chief executive, said:" We are resetting and rebalancing BP to meet the challenges of a possible period of sustained lower prices. Our results today reflect both this weaker environment and the actions we are taking in response."

Brent crude, one of the benchmark oil prices, averaged 54 dollars per barrel in the first quarter of 2015 compared with 108 dollars a year earlier. The Henry Hub gas marker price averaged 2.99 dollars per million British Thermal Units, 40 percent lower than a year earlier.

The company also said it "remains on track" to divest a further 10 billion dollars of assets by the end of 2015, and this total has now reached 7.1 billion dollars.

"Organic capital expenditure in the first quarter was 4.4 billion dollars and Dudley confirmed BP's reset expectation of 20 billion dollars total organic capital expenditure for 2015," added BP. Endit