Oil drop

Europe’s second-largest oil company, BP, has announced a $3.3bn drop in fourth-quarter profits after falling oil prices weakened global revenues.

The oil giant posted full-year profits of $25.6bn for 2008, a 39 per cent increase compared to 2007. However, results for the fourth quarter were down 24 per cent compared to same period last year.

Tony Hayward, chief executive of BP, said the volatility in oil prices was the reason behind the poor results, but described underlying financial and operational performance as ‘continuing to show powerful recovery’.

The key measure of operating cashflow was $5.6bn for the quarter, up around a third on a year ago, and the company’s total investment for the year totalled $30.7bn, including acquisitions and asset exchanges.

Oil and gas production for 2008 rose by five per cent after the company started nine new major oil-delivery projects. The company expects that these will help it achieve a resource-to-production ratio of more than 200 per cent.