BP reports drop in profit and takes hit from US wind farms

The oil giant said it had tried to renegotiate deals around three wind farms off the coast of New York, but was refused.

Energy giant BP’s profit missed expectations in the three months to the end of September and the company flagged a more than half-billion dollar charge it had taken on three wind farms off the coast of New York.

BP said that underlying replacement cost profit – its preferred measure – was 3.3 billion dollars (£2.7 billion) in the third quarter, down from 8.2 billion dollars (£6.8 billion) a year earlier.

It had been expected to make around four billion dollars (£3.3 billion).

The business said production in its gas and low carbon energy division had been around 1.8% lower in the first nine months of the year than last year. Oil production, however, was 6.1% higher.

 BP said it expects recent production restrictions from the Opec+ group of oil-producing nations to support prices, as will a “continued demand rebound”.

In June, the business and Norway’s Equinor filed a request with the authorities in New York to renegotiate the agreements they had on three wind farms amid soaring inflation and delays.

But this was refused earlier this month, prompting BP to take a 540 million dollar (£444 million) pre-tax impairment charge.

It had been a turbulent quarter at the top for BP. Boss Bernard Looney stepped down from the top job after it was revealed that he had not fully disclosed prior relationships with BP staff members to the board.

Murray Auchincloss, the finance boss who is now serving as interim chief executive, said: “This has been a solid quarter supported by strong underlying operational performance demonstrating our continued focus on delivery.”

He added: “As we laid out at our investor update in Denver, we remain committed to executing our strategy, expect to grow earnings through this decade, and on track to deliver strong returns for our shareholders.”

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