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BP profits hit by low oil prices and high compensation


BP profits hit by low oil prices and high compensation

British oil and gas giant BP’s second-quarter profits slumped by almost two thirds due to a combination of lower crude prices and ongoing charges over the 2010 oil spill in the Gulf of Mexico.

BP reached an 18.7 billion dollar (16.9 billion euro) settlement with the US governments and fives states this month to resolve the majority of claims over the leak, the largest in US history.

On Tuesday the company said it has also agreed to pay up to a billion dollars (900 million euros) to settle claims from local government bodies.

So far the explosion on the Maconda rig, in which 11 workers died, has cost BP 55 billion dollars (49.8 billion euros).

Second-quarter profits were also hit by a 600 million dollar (543 million euro) exploration write-off in Libya over security concerns.

BP has cut its planned capital spending this year to below 20 billion dollars (18.1 billion euros), indicating it expects oil prices to remain low for some time.

BP shares were trading one percent higher at the market opening in London this morning, outperforming the sector in Europe by 0.4 percent.