BP pockets £210 every second

OIL GIANT BP increased the pressure on rival Shell today by posting record profits for 2003, signalling the restart of its share buyback programme and registering strong growth in its reserves bank.

Chief executive Lord Browne hailed a 42% jump in full-year profits to almost $12.4bn (£6.8bn) - or £210 per second - and said the group had coped 'convincingly' with a challenging 12 months.

Crude output surged 9% in the fourth quarter at nearly 4m barrels of oil and gas equivalent a day as BP cashed in on its TNK venture in Russia, and Browne forecast growth of 10% in 2004.

However, shares in the group fell 17 1/4p to 409 1/2p as fourth-quarter adjusted profits came in at $2.67, just 1% above the corresponding period a year ago and some $250m below analyst expectations.

Browne admitted BP had suffered various one-off impairment and foreign exchange charges but insisted it had emerged from the year with its strategic direction more secure than ever. He said: 'Our results in 2003 have set a new record. We have delivered a good results from our existing assets and operations, while building a strong platform for the future.'

BP's results come days after Shell chairman Sir Philip Watts was forced to apologise to analysts for the group's devastating reserves downgrade. Its fourth-quarter profits fell by a third to $1.85bn.

Today's figures showed BP's reserves replacement was 122% last year - meaning it more than covered production for the 11th consecutive year. Shell's 2003 replacement rate was 98%.

Browne refused to comment on Shell's turmoil but said BP had talked to the US Securities and Exchange Commission regarding its own 2002 reserves assessment. He said it would not have to downgrade.

'We recognise the reserves in projects on sanction of the final investment decision and only rarely earlier. If they are not sanctioned in the next calendar year they are removed ... we believe our processes are robust and well-founded.'

BP's final-quarter dividend is raised to 6.75 cents, bringing the year's payout to 26 cents, up 8.3%.

BP is selling its minority 2.1% stake in Chinese oil group Sinopec for $700m (£377m). It bought the shares for $385m four years ago.