Oil-and-gas giant BP says its third-quarter earnings dropped by around 18 percent amid steadily declining crude oil prices. The Tuesday report is an early sign of how other global energy firms are likely to fare if global and U.S. benchmark prices continue to hover near their lowest levels in years.
BP said its adjusted profit for the July-to-September period was $3 billion, down from $3.7 billion for the same quarter in 2013. The company said it fetched about $9 a barrel less on average for the oil it produced compared to a year earlier.
Oil prices are down more than 25 percent since June over concerns of weak demand from Europe and China and of oversupply from countries outside the Organization of the Petroleum Exporting Countries, including the United States. Brent crude prices were trading at $86 a barrel on Tuesday, compared to an average of $102 in the previous quarter, the New York Times noted.
BP also blamed its lower quarterly earnings on declining income from Rosneft, Russia’s state-owned oil giant, of which BP owns one-fifth. The Russian ruble has plummeted by more than one-quarter against the dollar since the start of the year, due largely to falling oil prices but also because of Western sanctions against Moscow, which are drying up foreign capital flows into Russia.
The London-based firm said it earned $110 million in underlying net income from Rosneft in the third quarter, down from $808 million a year earlier.
However, BP said its growing oil-and-gas production, particularly in the United States, was helping to offset those setbacks. Overall production grew by more than 4 percent over the third quarter of 2013. Company executives said three major oil discoveries made in recent months in the Gulf of Mexico, Brazil’s Campos basin and the central U.K. North Sea would boost its already thriving exploration program.