BP says hurricanes to knock 2005 output goal

LONDON - BP Plc, the world's second-largest oil firm by market capitalisation, said on Tuesday it expected Hurricanes Rita and Katrina would cost it over $US700m ($NZ1.79 billion) and make it miss its 2005 output goal.

The London-based firm said in a statement that third-quarter oil and gas output averaged 3.8 million barrels of oil equivalent per day (boepd), compared with 4.1 million boepd in the second quarter and 3.9 million boepd in the third quarter of 2004.

Rita and Katrina cost BP 145,000 boepd in the quarter.

BP said the impact of the hurricanes, plus higher prices on production-sharing contracts, meant it was unlikely to meet its full-year production goal of 4.1-4.2 million boepd.

The impact of the storms is worse than some analysts had expected.

BP's loss eclipses the 20,000 boepd third-quarter production hit revealed on Monday by ConocoPhillips, the only other major US producer to report storm impact so far.

BP also lost output to planned maintenance, mainly in the North Sea, and higher prices hit its entitlement from production-sharing contracts with oil-producing nations.

The loss of Gulf of Mexico and North Sea output was especially costly because these are high-margin producing areas.

BP said refining margin benchmarks in the third quarter were higher than both in the second quarter and in the same period last year. However, BP's own margins lagged the rise in the industry-wide benchmarks.

BP will have benefited from the sharp rise in oil prices in the quarter, but the company said its own realisations lagged benchmarks, such as WTI and Brent.

- REUTERS