1 Aug 2012

BP Q2 profit down

12:25 pm on 1 August 2012

BP has reported a sharp fall in profit for the second quarter after cutting the value of parts of its business.

The company made a replacement cost profit - which strips out the effect of oil price movements - of $US238 million in the three months to June.

That compares with a profit of $US5.4 billion in the same period a year ago.

BP says it cut the value of its US shale gas assets and a number of its refineries, while its profit has also been reduced by the decision to suspend its Liberty offshore oil project in Alaska.

The BBC reports that even without these factors, BP's profit was lower as it was hit by weaker global oil prices and the reduced price of natural gas in the United States.

The company is selling its half stake in Russian venture TNK-BP and has been paying more to shareholders, raising the prospect that it could be a takeover target.