BP plc’s top managers expressed confidence in the oil major’s reserves numbers during the first quarter earnings conference Tuesday, but said the company will delay “slightly” a required Securities and Exchange Commission (SEC) report in order to incorporate shareholders’ comments.

Like other foreign companies listed in the United States, BP files a mandatory 20-F, the equivalent of the SEC’s 10-K. In the past, BP has filed its 20-F at the beginning of the second quarter following the release of its annual report, but this year, CFO Byron Grote said the 20-F would be filed toward the end of the second quarter. The “slight” delay, he said, would give the company time to add shareholders’ concerns about BP’s proven and unproven oil and gas reserves.

Lord John Browne, BP’s CEO, noted that the 2003 20-F may have “slightly” different figures than the annual report, which was published on March 10. However, he also stressed that the differences would not be significant.

BP’s announcement follows Royal Dutch/Shell Group’s news this year that has rocked the industry. In January, Shell announced a 20% reserve reclassification, and it has subsequently lowered reserves numbers even more, leading to management firings and internal investigations (see Daily GPI, April 20; April 15). The SEC also is formally investigating Shell’s reserves numbers.

BP otherwise reported a strong quarter, with a 14% increase in net income bolstered by exceptional gains from the sale of its stake in two Chinese oil companies. Net income for the first quarter was $4.82 billion (21 cents/diluted share), up slightly from $4.22 billion (19 cents) in the same period last year. BP’s earnings are reported as “historical cost” profit under UK accounting rules, and are not comparable to net income under U.S. generally accepted accounting principles.

Revenue rose 11% to $69.48 billion in the quarter, up from $62.43 billion in 1Q2003. Without exceptional credits, BP’s pro forma earnings, which are calculated to exclude oil inventory fluctuations, fell 6% to $3.54 billion from $3.76 billion a year earlier.

Oil and natural gas production rose 11% in the first quarter to 4.02 MMboe/d, up from 3.62 MMboe/d a year ago, mostly on the coattails of a joint venture begun last year with TNK International, a major Russian oil producer.

However, quarterly profit from BP’s core exploration and production unit fell 11% from 1Q2003 on several factors, “reflecting lower exceptional gains, higher depreciation, the impact of the changing composition of production resulting from the TNK-BP acquisition and the divestments made in 2003, higher costs due to foreign exchange movements and slightly lower U.S. gas realizations, partly offset by higher production and slightly higher liquids realizations.”

In Gas, Power and Renewables, earnings also were down slightly compared with a year ago because of lower marketing and trading results, although BP reported improved results in global liquefied natural gas, solar and renewables and a contribution from the natural gas liquids business.

BP’s quarterly results were boosted by a strengthening world economy, said Browne, especially from growth in the U.S. and Asian economies. BP’s reported earnings were flat in the fourth quarter of 2003, pulled down by a weak U.S. dollar and restructuring charges (see Daily GPI, Feb. 11).

On the natural gas side, Browne noted that U.S. prices “traded in a relatively narrow range for most of the first quarter, averaging $5.69/MMBtu (Henry Hub first of the month index),” an increase of about $1.10/MMBtu versus the fourth quarter of 2003, because of seasonal weather effects, lingering supply concerns and the strength in oil prices.

“With storage at adequate levels and with growth in supply and demand looking more balanced than in recent years, we expect that gas prices will remain strongly influenced by movements in oil prices for the remainder of 2004,” Browne said.

In a separate announcement, BP plans to spin off its olefins and derivatives, or O&D, division of its petrochemicals business, and it is considering an initial public offering, perhaps by the end of 2005. next year. BP reported a $25 million segment loss in its chemicals business in the first quarter, compared with a $137 million profit in 1Q2003.

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