In the first third quarter earnings report by a major producer, BP plc on Tuesday reported a 34% hike in 3Q2005 net profit, but it blamed a 2% production loss on the devastating hurricanes that struck the Gulf of Mexico. In the storms’ aftermath, the London-based major warned that its deepwater Thunder Horse platform may not ramp up until the second half of 2006 — a year later than scheduled — and the producer cut its production forecast for 2005 by 100,000-200,000 boe/d.

BP’s worldwide hydrocarbon production was 3.824 million boe/d in the quarter, down from 3.906 million boe/d in 3Q2004. Net crude output was up slightly, but worldwide net natural gas production fell to 7.84 Bcf/d, down from 8.275 Bcf/d. The hurricanes also are expected to lead to the loss of an additional 160,000 boe/d in 4Q2005, according to CEO John Browne.

“The recent hurricanes (Katrina and Rita) in the U.S. have impacted our results,” Browne said in a statement. “These were two of the most destructive storms of recent times in what has been the most active hurricane season in more than 70 years.” BP expects production from the deepwater Gulf ” to be back to normal, with the exception of the Shell-operated Mars project, by the end of the year.”

Net profit in the third quarter reached $6.46 billion (31 cents/share), up from $4.82 billion (22 cents) in 3Q2004. Revenue was $97.73 billion, up from $66.73 billion in 3Q2004. The profit included net special charges of $921 million, compared with a year-earlier charge of $394 million. Special charges included a re-measurement of fair value for assets associated with the company’s Innovene chemical subsidiary, which it has previously agreed to sell.

BP posted an impairment charge of $100 million on an unspecified Gulf field, which the company said was damaged by the hurricanes. Thunder Horse platform, in the same producing region, is expected to cost $250 million to repair, including $107 million charged in the third quarter. Thunder Horse, which is designed to process up to about 250,000 boe/d, began listing when Hurricane Dennis crossed the Gulf in July. Browne said the platform’s ballast system had a defect that caused the platform to list, not hurricane damage.

Overall, annual group production for 2005 is now expected at about 4 million boe/d, compared with a previous guidance of 4.1-4.2 million boe/d. However, Browne noted capital expenditure expectations for 2005 have been cut back by $500 million to $14 billion because the hurricanes forced the company to defer spending.

“Our strategy is unchanged,” said Browne. “We continue to execute it with discipline and focus. Our ability to capture the benefit of current prices and margin strength underpins continued dividend growth and continuing share buybacks subject to market conditions and constraints. Capital expenditure is now expected to be approximately $14 billion for the year and around $15 billion in 2006.”

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