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BP to miss Big Oil's bumper Q3 due to oil spill

By Tom Bergin

LONDON (Reuters) - BP's Gulf of Mexico oil spill meant it missed out on an industry-wide trend of higher profits and rising production in the third quarter, according to a Reuters poll.

BP's third-quarter replacement cost profit was forecast down 2 percent to $4.60 billion despite a 12 percent rise in crude prices, a 29 percent hike in U.S. natural gas prices and a doubling in British gas prices, the poll found.

By contrast, Royal Dutch Shell was expected to post a 50 percent rise in current cost of supply (CCS) net income to $4.3 billion.

Industry No.1 Exxon Mobil was forecast to post a 53 percent rise in net income to $7.26 billion, while U.S. rival Chevron's

net income was seen up 15 percent to $4.41 billion.

Replacement cost and CCS earnings exclude unrealized gains or charges related to changes in inventory values and, as such, are comparable with net income under U.S. accounting rules.

"The focus will be on the ongoing implications of the Macondo disaster but it will be very important to see that underlying operating and financial performance remains competitive," analysts at UBS said in a research note.

BP took a $32 billion charge in the second quarter to account for the likely costs of the oil spill -- the worst ever in the United States. However, analysts do not believe that was the end of the matter.

Barclays Capital analysts expected BP to increase the provision for the oil spill by $2-3 billion because it took BP over a month longer to seal the well, for good, than it thought.

BP MISSES PRODUCTION BOOST

Also, the analysts polled said they expected BP's oil and gas production would likely drop, on average, by 3 percent in the quarter because the oil spill response effort sapped resources from its other fields in the Gulf of Mexico.

Across the sector, Barclays predicted a 4 percent rise compared to the 2009 period, and Exxon's output was seen up 19 percent to 4.4 million barrels of oil equivalent per day (boed), largely thanks to its June acquisition of XTO Energy.

A brighter spot for BP may come in refining.

All the big, integrated oil companies should receive a boost from higher average margins globally.

However, the gains were uneven, with margins in the United States, where BP's facilities are mainly based, jumping almost 30 percent, while margins in Europe, where Shell and Exxon have more capacity, were flat.

With the oil well plugged on July 15 and killed for good on September 19, it was inevitable the spill would impact the quarter's results -- whose release has been delayed by a week due to additional work needed to account for the disaster.

BP investors are now looking for clues in the results statements and teleconferences with management as to how fast new chief executive Bob Dudley can turn the oil major around.

"The path to rehabilitation post Macondo and Bob Dudley's new strategic direction are the key to performance rather than Q3 earnings," analysts at Citigroup said in a research note.

(Additional reporting by Anna Driver in Houston and Braden Reddall in San Francisco; Editing by Dan Lalor)

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