BP sees profits take a dive after Hurricane Barry and lower prices

Oil major BP saw profits tumble because of lower oil prices and a “significant” production hit from Hurricane Barry in the Gulf of Mexico.

Underlying replacement cost profit, a measure of profitability, dropped to $2.2 billion (£1.7 billion), down from $3.8 billion last year.

Results were better than the $1.8 billion analysts had pencilled in thanks to strong results from the firm’s downstream business, which cushioned the production hit upstream. The shares were down 0.61%, or 4p, to 508.9p.

Oil prices have fallen from around $75 per barrel a year ago to $62 today because of weaker demand, making sales less lucrative for the FTSE 100 giant.

BP warned in summer that third-quarter production would be lower due to Barry, a tropical cyclone which ripped through the Gulf of Mexico.

This month BP revealed the extent of the damage, with 100,000 barrels lost every day after it was forced to shut oil rigs for two weeks.

Underlying upstream production was down 2.5% from a year earlier. Stronger results downstream offset the production snare, including record crude processed at the large Whiting and Cherry Point refineries in the US.

BP finance chief Brian Gilvary said the results “demonstrate the resilience of our financial performance, even at lower prices”.

Chief executive Bob Dudley added: “Our focus remains firmly on maintaining financial discipline and delivering safe and reliable operations throughout BP.”

Dudley is set to retire from BP next March after full-year results. The head of the upstream business, Bernard Looney, will succeed him.