British oil giant BP has reported a 21 per cent drop in profits for the third quarter of the year.
The company recorded an underlying replacement cost profit of $3 billion (£1.8 billion) for Q3 of 2014, compared to $3.7 billion reached at the same period 12 months earlier. There was some areas of improvement with operating cash flow for the quarter up to $9.4 billion from the $6.3 billion in 2013. BP noted that total operating cash flow for the first nine months of year was $25.5 billion.
BP has been affected by the falling value of the rouble and lower oil prices which has prompted the drop in profits. The British firm warned earlier in the year that the US and European Union's decision to impose sanctions on Russia in response to the Ukraine crisis would affect its own operations.
The company has a major interest in Russian operations through its stake in Rosneft. The Russian energy firm saw a huge drop in net income, reporting just $110 million for Q3 compared to $808 million recorded for the same period 12 months earlier. BP said in a statement that lower Ural oil prices had also impacted on its profits.
Despite the drop in profits, Bob Dudley, BP Group chief executive, was hopeful for the future and said: "BP's operational momentum continues to deliver results. Growing underlying production of oil and gas and a good downstream performance generated strong cash flow in the third quarter, despite lower oil prices. This keeps us well on track to hit our targets for 2014."
BP has been making significant headway in terms of exploration as well, the company confirmed. Since mid-year the firm has made three oil discoveries – Vorlich in the central UK North Sea, Xerelete in Brazil's Campos basin and Guadalupe in the deepwater US Gulf of Mexico.
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