BP PLC, one of the world's largest oil companies, reported a 34 percent rise in quarterly profit Tuesday as record energy prices more than outweighed hurricane damage to its rigs and refineries.
BP said net profit for the three months ended Sept. 30 rose to $6.53 billion, up from $4.87 billion in the third quarter of 2004. Revenue jumped to $97.73 billion from $66.73 billion.
"The recent hurricanes in the U.S. have impacted our results. However, underlying performance is strong, amplified by high but volatile prices of oil, gas and products," said Chief Executive Lord Browne.
Production was down 2 percent compared to the third quarter last year, primarily because of the impact of hurricanes in the Gulf of Mexico, the company said.
"We anticipate production from the deepwater Gulf of Mexico to be back to normal, with the exception of the Shell-operated Mars project, by the end of the year," Lord Browne said.
BP is the first major oil company to report quarterly results reflecting the impact of the hurricanes, ahead of Royal Dutch Shell PLC and Exxon Mobil Corp. later this week.
Oil prices peaked at $70.85 a barrel on the New York Mercantile Exchange on Aug. 30 after Hurricane Katrina struck the Gulf Coast, temporarily shutting down at least 80 percent of its crude-oil and natural gas production and crippling many refineries. Hurricane Rita followed four weeks later, delaying a return to normal production.
Browne said that oil prices "are expected to be well supported into the winter."
The company said its replacement cost profit for the quarter, considered a key indicator by analysts, rose 16 percent to $4.41 billion from $3.79 billion. The measure excludes exceptional items and gain in the value of inventory holdings, providing the amount it would cost to replace assets at current prices.
The third-quarter result included a net non-operating charge of $921 million, largely due to the loss of fair value on Innovene, the company's petrochemicals unit that it is selling for $9 billion to British chemical company Ineos PLC. That compared with a charge of $394 million in the third quarter of 2004.
BP said "the proposed sale was sufficiently well advanced at the end of September for the Innovene operations to be classified as a 'disposal group' as of Sept. 30."