Missed targets to cost BP £30m

OIL giant BP shocked investors by admitting it will miss oil and gas production targets this year after setbacks that will clip £30m off profits. The news wiped £4.8bn off the value of the company. The shares tumbled 16 1/2p to 451 1/2p on Wednesday night on disappointment that BP boss Lord Browne has broken an unblemished growth record.

'It's a minor embarrassment,' said Tony Alves at Investec. Only a month ago BP said it would meet the 5.5% target, now expected to be between 4.5% to 5%.

Britain's biggest company stressed its long-term target of 5.5% compound annual growth, averaged over 2000-2005, remains unchanged. It said it was unrealistic to expect production to grow in even steps. 'It's going to be lumpy from quarter to quarter and even year to year.'

BP's difficulties stemmed from a clutch of shutdowns last month. Problems with its production vessel in the Schiehallion oil field, off the Shetland Isles, forced it to shut the field, with a loss of 55,000 barrels a day. The field is back on stream, but working at reduced levels.

A pipeline from the Norfolk coast to Zeebrugge went down. An accident at an oil well in Alaska meant 150 other wells had to shut down for testing. North American gas output was also reduced because of problems with other operators' pipelines.

BP had been forecast to make £5.7bn profits this year. Alves said the problems 'do not necessarily have long-term implications for the assets'.