<a href=www.thescotsman.co.uk>thescotsman.co.uk

BP unveiled its biggest-ever quarterly profit of U$3.73 billion on back of oil supply concerns.Oil price drives BP to record profits

JAMES ASHTON SENIOR CITY CORRESPONDENT OIL major BP revealed yesterday that it has no plans to sell any more North Sea assets, as it reported its biggest-ever quarterly profit, boosted by oil and fuel prices sent higher by the war in Iraq.

The company, which sold off its Forties field in January, reported a net profit adjusted for exceptional items up 136 per cent at U$3.73 billion (£2.35 billion) - or £300 per second - at the top end of analysts’ expectations. Supply concerns linked to the war in Iraq, strikes in Venezuela and civil unrest in Nigeria, pushed the average price of crude oil to a 12-year high in the first three months of 2003.

But with the oil price down another 35 cents at $23.15 a barrel yesterday, BP chief executive Lord Browne said the trading environment had already weakened in the second quarter, with few signs of an immediate recovery in the world economy. He added: "To say that the world is not troubled right now would not be right."

Browne also warned that with the rising tide of investor anger over fat-cat salaries, UK directors must be prepared to accept smaller pay packets.

BP caused concern last year when it said it would sell off some of its mature assets to invest in riskier areas, such as Angola and Azerbaijan. After Forties, it sold a package of southern North Sea gas assets to French firm Perenco. BP will still seek to raise between £3bn and £6bn from divestments this year to offset forecast capital expenditure of £14bn, but it will get rid of no more in the North Sea. It still accounts for 20 per cent of the UK’s oil and gas production.

BP has sanctioned a £300 million investment in the Rhum gas field, 16 miles from the Bruce field in the North Sea. It has co-owned Rhum with Iran’s state oil firm since its discovery in the 1970s, but advances in technology mean it is only now economically viable to begin production.

The company emphasised that its growth was not dependent on getting involved in production in post-war Iraq, which has the world’s second largest oil reserve base.

Shares in BP dipped 3.25p to 399.75p as analysts pointed to weaker-than-expected sales from BP’s refining and marketing arm and flat operating profits from its chemicals division.

The company maintained it made "remarkably little" profit from its UK petrol stations, where it is trying to improve performance by selling more coffee and sandwiches.

Browne, who saw his pay cut by 32 per cent to £3.9m last year to reflect the oil giant’s poor underlying performance and a falling share price, said he thought remuneration packages in the US - from where the UK takes its lead - would fall after bad publicity from high profile pay-offs for failure.

Companies must also account for executive share options on their balance sheets, he said. "Something will definitely change, and I don’t think it will be upwards in the US."

He also defended allegations that the company, Britain’s largest, was too close to the government, from which it had gained the nickname "Blair Petroleum". Browne said: "I don’t think that is fair or reasonable or actually well-judged because it’s simply not true."

Latinamerica expected to grow 2% in 2003.
Posted by click at 4:33 AM in Latin America

<a href=www.falkland-malvinas.com>Mercosur Wednesday, 30 April

Latinamerica economy is forecasted to grow 2% in 2003 given the improvement in world trade conditions, easier access to credit and the significant improvement of the Argentine economy, according to the latest release from the United Nations Economic Commission on Latinamerica, Cepal.

“Following a recessive cycle began in 2001 the region has retaken a moderate path of growth which should turn into a regional growth in the range of 2% for 2003”, reads the report from Cepal main office in Santiago de Chile.

However Cepal also points out that political and economic uncertainties persist, among which it mentions erratic oil prices and the meagre growth prospects in the industrialized countries.

The report stresses that access to money markets has improved given the drop in region-risk particularly since Brazil has kept to orthodox policies ensuring the sustainability of its foreign debt.

Argentina has performed better than expected and is forecasted to grow 4% in 2003, the highest of the region together with Peru.

At the other end is Venezuela where a 10% contraction of its GDP is anticipated and Uruguay and Paraguay that are still suffering the effects of the regional crisis and will experience a negative growth of 2 and 3%.

Brazil is expected to keep to its modest recovery reaching 1,8% in 2003 following the 1,5% of 2002. Brazil’s economy boost comes from exports because the domestic market will actually remain stagnant or suffer a modest contraction.

Prospects for other countries of the region are: Chile 3,5%; Colombia 2%; Mexico 2,4$, Nicaragua and Panama 1,5% and Bolivia and Ecuador 2%.

Finally Cepal indicates that in 2002 the regional economy contracted 0,6%, completing what is defined as “half a lost decade”, when per capita income in the region dropped significantly and the fast growing economies lost their dynamism.

Army role helped raise Halliburton net income. Core work was key to most of increase
Posted by click at 4:30 AM Story Archive (Page 195 of 637)
Adamant: Hardest metal

April 29, 2003, 10:48PM By NELSON ANTOSH Copyright 2003 Houston Chronicle

Halliburton said Tuesday that first-quarter net income nearly doubled from a year earlier amid improvements in its core oil-field service businesses, with a little help from an Army contract.

But most of the help came from comparing the first quarter against a year-ago period that included a patent infringement judgment against Halliburton totaling $98 million.

Altogether, net income for the quarter that ended March 31 rose to $43 million, or 10 cents per diluted share, up from $22 million, or 5 cents per share, in the quarter a year ago. Revenues grew 2 percent to $3.1 billion.

Income was reduced by a $34 million charge, equal to 8 cents per share, from cost overruns and delays on the Barracuda-Caratinga project offshore Brazil.

Chairman, President and Chief Executive Dave Lesar said the results were understandable and predicted better.

"In an environment where activity was down in Venezuela and the Middle East, Halliburton Energy Services' results compare favorably to the prior year quarter as well as the fourth quarter of 2002," he said in a statement.

"Although I am disappointed by the additional charges on Barracuda-Caratinga, I believe that progress on this project is being made in our negotiations" with Brazilian state oil giant Petrobras.

Additional improvements are expected during the second quarter as the recovery in the oil-field services industry continues, Lesar said.

The company's stock declined 32 cents to close Tuesday at $20.99.

A $400 million, three-year contract with BP announced Monday should start to produce improvement during the third and fourth quarters, said analyst Kurt Hallead of RBC Capital Markets.

Halliburton Energy Services will provide drilling and completion products and services for BP America in the Gulf and the lower 48 states. The biggest gains in market share with BP will be in logging and well stimulation.

"When you sort out all the noise, their core oil-field service business continues to move in a positive direction," Hallead said.

"Relative to their peers, their performance on the oil-field side was pretty solid," echoed analyst Brad Handler of Blaylock & Partners.

While the pre-Iraq war logistics contract with the Army involved only about $86 million, it was at least moderately helpful to earnings because of relatively good margins, said Handler, compared with the low margins for other engineering and construction work.

Overall, the engineering and construction group produced a first-quarter operating loss of $19 million, despite revenues being up 10 percent to about $1.5 billion.

It was too early to see any results from the Kellogg Brown & Root contract for putting out oil well fires in Iraq, Handler said. KBR is a unit of Halliburton. The Barracuda-Caratinga project has been a thorn in the side of Halliburton for some time, and the analyst isn't sure the problems are over yet.

Halliburton shares are trading at about a 15 percent discount to fair value because of uncertainties about its global asbestos settlement, expected to be wrapped up by year's end, said James Crandell, managing director of oil service equity research at Lehman Bros.

"There are still hurdles and considerable doubt as to how much of the total liability will ultimately be paid for by insurance," Crandell said in a report.

During the quarter, 45,000 asbestos claims were filed as plaintiffs rushed to file before the prepackaged bankruptcy planned for two subsidiaries.

Meanwhile, only 3,700 claims were settled because of the imminence of the global settlement, he said.

Oil Breaks Sliding Trend

Posted by click at 4:28 AM in oil

Tue April 29, 2003 11:26 PM ET

SINGAPORE (<a href=reuters.com>Reuters) - Oil prices traded marginally higher on Wednesday, breaking six straight days of falls that wiped more than $3 off a barrel of crude as traders awaited fresh data from the United States on the health of U.S. fuel supplies.

U.S. light crude CLc1 climbed 18 cents to $25.42 a barrel, recovering from a five-month low of $25.18 struck on Tuesday on expectations of rising supply in a weak global economy and with the deadly SARS epidemic biting into oil demand.

London's Brent crude LCOc1 rose nine cents to $23.35 a barrel.

"I think at these levels, oil is becoming a good short-term buy on a risk-reward consideration. Stocks are still very low and any potential supply disruption could flick U.S. crude back up to $26 or $27," said David Thurtell, commodities strategist at Commonwealth Bank in Sydney.

With little by way of headlines to move prices, traders will focus attention on U.S. oil stocks data to be released by the government's Energy Information Administration (EIA) later on Wednesday.

The weekly report on inventory levels across the barrel is closely monitored by oil dealers for signs of market imbalances in the world's biggest oil consumer and for a snapshot of demand.

U.S. fuel stocks have been running at steep deficits to year-ago levels, raising fears of a potential shortfall following disruptions to supplies from Venezuela, Nigeria and Iraq in the last six months.

Analysts polled by Reuters on Monday forecast the EIA to report a 2.85 million barrel increase in crude levels in the week to April 25 as refiners rachet up processing rates in preparation for the summer run on gasoline during the holiday season.

Analysts pegged gasoline inventories rising by 1.6 million barrels, while distillate stocks were seen up by 1.3 million barrels as demand tails off with the end of winter.

Oil prices tumbled more than $1 last Wednesday after the EIA reported an unexpectedly large nine-million-barrel jump in crude stocks on record imports, with much of the extra supply coming from OPEC producers.

SARS THREATENS OIL DEMAND GROWTH

The Organization of the Petroleum Exporting Countries last week agreed to cut back less than expected of the surplus crude it pumped to cover supply during the U.S.-led war on Iraq.

OPEC raised production well beyond formal quota limits in March to keep oil prices under control ahead of war in Iraq and make up for supply disruptions from a strike in Venezuela and ethnic strife in Nigeria.

While OPEC presented its deal as a cut of two million barrels per day (bpd), analysts said its threshold for the reduction was inflated, reducing the actual impact of the move.

The increased OPEC supply, particularly from Saudi Arabia, has helped bring oil prices below the $30 a barrel level that analysts warn can hurt global economic growth.

Also weighing on prices, the International Energy Agency has said it may have to cut its world oil demand forecast for this year as the deadly SARS virus slashes air travel.

OPEC has said it expected Severe Acute Respiratory Syndrome to hit Asian demand alone by some 300,000 bpd mainly due to declining travel. The epidemic coincides with the second quarter, when oil demand falls about two million bpd from its winter peaks.

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