The segment’s profit before interest and tax fell by 34.7% year on year to $1.12bn in the third quarter of 2011, the UK-based oil giant said in a statement.
“The third quarter saw a return to strong operations, relative to the weather-related power outages that impacted our second-quarter results,” the company said.
Compared with the same period a year earlier, the results in the third quarter reflected an improved refining environment, partially offset by increased turnaround activity, it said.
BP’s refining and marketing division also benefited from strong refining feedstock optimisation in the US due to BP’s location advantage in accessing WTI-priced crude grades, the company said.
“These benefits were, however, partly offset by the effect of increased relative sweet crude prices in Europe and Australia, primarily caused by the loss of Libyan production,” it added.
Earnings in the third quarter were negatively affected by the strengthening of the US dollar against the euro and Australian dollar, and a difficult marketing environment.
For the first nine months of 2011, BP’s replacement cost profit before interest and tax rose by 7% to $4.91bn, while its profit before interest and tax surged by 32.1% to 7.3bn.
Looking ahead, the company said it expects a normal seasonal decline in refining margins in the fourth quarter, with the level of planned turnarounds expected to be lower than in the third quarter.
“However, our Whiting refinery will undergo planned maintenance activity that will affect approximately half of its crude capacity for the expected one-month duration of the outage,” BP said.
Meanwhile, BP's overall third quarter replacement cost profit was $5.14bn, compared with a gain of $1.85bn a year earlier. For the nine-month period ending September 2011, replacement cost profit was $15.9bn, compared with a loss of $9.53bn a year ago.
The company takes into account inventory holding gains or losses, as well as taxes, in the computation of replacement cost profit.
In the third quarter, BP booked $233m in inventory holding gains, which were added to the net profit of $5.14bn.
($1 = €0.72)
