Guardian Unlimited Business | Business latest | Hurricane aftermath hits BP production

BP today reported a drop in daily oil production as it continued to feel the impact of hurricanes in the US.

In a trading statement, BP said it produced an average of 4.01 million barrels a day in the final three months of 2005, slightly less than the 4.1 million barrels from the previous quarter.

BP also said that the hurricane-related closure of its Texas City refinery and hurricane damage elsewhere would cost the company more than $1bn (£567m) in lost profits and repairs in the fourth quarter.

Along with other oil firms, BP was hit by Hurricanes Katrina and Rita, which shut down production in the Gulf of Mexico and stopped refining activities in the surrounding area.

Despite the effects of the hurricane season, BP is still expected to report large annual profits for 2005 next month as record oil prices and big profits from refining more than made up for lost production.

However, oil prices eased in the fourth quarter and BP said that its refining margins fell significantly in the fourth quarter. Analysts believe that the industry has now ended its run of quarterly earnings records and are predicting weaker results in 2006.

BP said it would also take a $400m charge for a previously announced restructuring of its European marketing business.