In an interim 1Q2005 update, BP plc said overall oil and natural gas production is expected to be about 4.09 MMboe/d, which is about the same output level as the final quarter of 2004 and slightly higher than the 4.015 MMboe/d reported for the same period a year ago.

The company reiterated that average production for full-year 2005 is expected to be in the range of 4.1-4.2 MMboe/d.

However, the London-based major warned that its 1Q2005 refining margin would fall below that of 4Q2004. It attributed the decline to negative foreign exchange effects and an increase in routine maintenance operations. Two weeks ago, during a maintenance operation, an explosion occurred at a BP refinery in Texas City, TX, killing 15 people. BP did not provide details on how the accident may affect its future income.

In 1Q2005, BP said margins for the marketing and natural gas liquids division also decreased sequentially from 4Q2004, reflecting pressure from rising crude and product prices.

BP expects to see a boost to its nonoperating items in 1Q earnings of about $1 billion before tax. This will include $1.1 billion from asset sales, mostly its interest in the Ormen Lange field off the Norway coast.

The company will report earnings on April 26.

©Copyright 2005Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.