BP'S first-quarter profits have inevitably been hit by weak oil prices, though chief executive John Browne proudly proclaimed them to be at the top end of analysts' expectations and better than the oil majors' average performance.
Net income before extraordinary items came to #582m, a 22% reduction on the 1997 first quarter and 10% on the 1997 fourth quarter.
There is a quarterly dividend of 5.75p, the same rate as the fourth payment for 1997 but a 9.5% increase on the first payment for 1997.
''These are good results in a very tough climate,'' declared Browne. ''We've seen improvement in through-cycle performance in all businesses and there is more to come in the rest of the year.''
BP shares still fell 13.5p to 939.5p.
BP has for years trumpeted the benefits of ''self-help'' which is a rolling programme of cost-cutting and efficiency improvement. Now it says it is implementing further substantial cost-cutting in the face of the weak oil price.
Browne claimed the company is determined to push this through to the bottom line ''in a way that won't impair our plans for long-term growth''.
Exploration and production operating profits were down 43% at #524m. Oil prices were about 30% lower. Overall production was ahead despite lower gas sales due to the mild winter.
BP remains keen to find new exploration areas. It is impressed by the potential in Russia, though the major problem in developing production there is the high cost of getting oil out of the ground. This is often some $8-$10 a barrel, which compares with BP's average of $2.30.
The group is keen to get back into Iran and is setting up an office in Tehran. However, it is trading carefully because it cannot afford to offend the US where it has huge interests. Progress will depend on Iran developing a normal political relationship with the US.
For historic reasons, BP should be well placed to secure concessions if a thaw comes about.
BP is pleased with its exploration track record, which has been helped by advancing technology. In its promising Angolan fields it struck oil in seven successive wells.
Refining and marketing activities in the first quarter benefited from lower feedstock prices with the result their profits rose by 30% to #233m. Europe performed very strongly as the advantages of the joint venture with Mobil came through. Margins improved in UK petrol stations as the price war eased.
The Grangemouth refinery completed its restructuring programme. BP is investing #500m in the petrochemical complex which Browne described as one of the ''most modern and significant'' in Europe.
The group is keen on expanding in chemicals and Browne confirmed reports that it had had brief talks with Union Carbide, which had come to nothing. Profits from chemicals in the first quarter rose by a tenth to #114m.
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