Bumper year at BP

BRITAIN'S biggest company, BP, is on course for another year of bumper profits after signalling today that soaring oil and gas prices are more than compensating for slower growth in parts of the business.

Investors are likely to cash in, the group confirming it has already bought back $2bn (£1.06bn) of shares since the start of the year.

The oil giant run by Lord Browne said in an end-of-quarter trading statement that it had managed to achieve a similar jump in crude sale prices to that seen on the world market during the first quarter of the year.

Brent crude averaged $47.62 a barrel in the first three months of the year, some 48% up on a year ago. US gas prices were 10% higher.

BP registered record profits of $16.2bn last year, sparking fresh calls for a windfall tax from Chancellor Gordon Brown. Analysts believe it will come close to setting a new all-time high in 2005. The company makes an extra $500m-a-year operating profit from each $1 rise in the oil price.

But today's trading statement confirmed the City's fears that BP's refinery business and its marketing arm, which houses the group's petrol forecourts, struggled in the first quarter from the rising cost of crude.

Margins across BP's refining arm - hit last month by an explosion at its Texas refinery - are expected to come in below those seen in the final three months of last year.