BP plc and Chevron Corp. both warned last week they expect to report lower-than-expected production numbers for the final quarter of 2006. Lower commodity prices also are expected to dampen year-end earnings reports.

London-based BP reported that 4Q2006 oil and natural gas output fell for the sixth straight quarter on start-up delays in the Gulf of Mexico (GOM) and reduced oil flow from its Prudhoe Bay field in Alaska. BP reported production dropped 5% to 3.82 MMboe/d from 4.02 MMboe/d in 4Q2005. The results will put total production for 2006 at around 3.92 MMboe/d, down 2.3% from 2005.

At the beginning of 2006, BP estimated its output for the year would reach 4.1-4.2 MMboe/d. However, in October, BP scaled back its forecast to 3.95 MMboe/d following pipeline corrosion problems at its Prudhoe Bay facilities (see NGI, Oct. 30, 2006). BP, which is scheduled to report its quarterly earnings on Feb. 6, still expects earnings to rise on higher oil prices. However, refining profits likely will be lower.

BP last year delayed the start-up of two GOM platforms: Atlantis, which now won’t ramp up before the second half of 2007, and Thunder Horse, which is now scheduled to begin operations in late 2008 (see NGI, Sept. 25, 2006).

Chevron reported that in the first two months of the final quarter, U.S. liquids and natural gas production fell nearly 1% sequentially from 3Q2006, and international liquids and gas production was off more than 3%. Chevron is scheduled to report its quarterly results on Feb. 2.

“U.S. liquids and natural gas production declined almost 1% from the third quarter, largely due to planned project activity — particularly in the Gulf of Mexico, which continued into December,” Chevron said in a statement. Chevron has several major exploration developments in various stages of development, including Blind Faith, Great White Perdido and Tahiti. First production from the Tahiti platform is expected in 2008. Chevron also is evaluating several deepwater GOM projects, including the Jack and St. Malo fields in the Lower Tertiary.

In the first two months of the final quarter, Chevron’s U.S. gas production was 1,788 MMcf/d, down from the 1,638 MMcf/d reported in 4Q2005 (full quarter). In 3Q2006, Chevron’s gas output was 1,846 MMcf/d. Combined, net liquids and gas production through Nov. 2006 was 766,000 boe/d, ahead of the 717,000 boe/d reported in 4Q2005 (full quarter). Net liquids and gas output in 3Q2006 was 772,000 boe/d.

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