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BP quarterly profits collapse on tumbling oil prices

[LONDON] BP profits collapsed in the third quarter as oil prices halved on back of the stubborn global supply glut, the British energy giant said on Tuesday.

The London-listed energy major, which was ravaged by the catastrophic 2010 Gulf of Mexico oil spill, added it would cut investment further and sell more assets.

Net profit dived 64 per cent to US$46 million (42 million euros) in the three months to the end of September, compared with US$1.29 billion a year earlier, BP said in a results statement.

Profit adjusted to reflect the value change in oil inventories sank 40 per cent to US$1.82 billion from US$3.04 billion. That however beat market expectations of US$1.26 billion according to analysts polled by Bloomberg.

The group lowered its full-year 2015 capital-spending forecast to less than US$20 billion. The company invested about US$23 billion in 2014.

"Last year, we acted decisively to reset BP for a sustained period of lower oil prices and the results are coming through well," said chief executive Bob Dudley.

"We are now in action to rebalance our financial framework in this new price environment." With oil prices plunging on the back of a global glut, energy majors like BP and Anglo-Dutch rival Shell have been slashing investment and jobs.

Brent oil prices averaged US$50.47 per barrel in the third quarter, down more than 50 per cent from US$101.93 a year earlier, according to the group.

BP has meanwhile been forced to sell off billions of dollars of assets to meet the clean-up bill for the devastating Gulf of Mexico oil disaster.

The energy giant added Tuesday that it would sell another US$3.0-5.0 billion of assets in 2016, before returning to a rate of about US$2.0-3.0 billion in subsequent years.

"Divestment proceeds are expected to provide flexibility to help manage both continuing oil price volatility and BP's commitments in the US," the company added.

BP took another US$426-million charge for the US oil disaster in the third quarter, taking its total charge to US$55 billion.

The group added its current divestment programme was "nearing completion".

In October 2013, BP had unveiled plans to sell another US$10 billion of assets, having already offloaded $38 billion.

BP will pay a record US$20.8 billion to settle government claims for damages stemming from the deadly 2010 Gulf of Mexico oil spill, US Attorney General Loretta Lynch said earlier this month.