BP Reports $5.5B First-Quarter Profit

The energy company took a $400 million pre-tax charge during the quarter that is related to the Gulf of Mexico spill last year and provided an update on the cleanup and status of claims.

BP p.l.c. on April 27 reported a $5.481 billion profit for 2011's first quarter, down 2 percent from the $5.598 billion reported a year earlier but 19 percent above the $4.614 profit of 2010's fourth quarter. The British energy giant took a $400 million pre-tax charge during the first quarter that is related to the Gulf of Mexico spill after the Deepwater Horizon disaster a year ago; during 2010, BP took a charge of $40.9 billion because of the spill, which included a $20 billion commitment to a compensation fund.

The company had $18.7 billion in cash on hand and net debt of $27.5 billion as of March 31, 2011.

It reported the second relief well to the Macondo well in the gulf was plugged and abandoned on March 8, 2011, and the last source control vessel, the Discoverer Enterprise, is in final stages of being cleaned and decontaminated, "and this is expected to be completed by the end of the second quarter of 2011." Most of the shoreline cleanup was completed during the first quarter of 2011, according to the financial report.

It said as of March 31, 155,662 individual and business claimants were still seeking payments from the Deepwater Horizon Oil Spill Trust Fund that is being administered by the Gulf Coast Claims Facility. The second and final phase of the claims process is in progress, it says; BP reported it has processed 84 percent of the government claims (these do not include payments to the Coast Guard for federal expenses) filed since the explosion and spill and has made $559 million in payments.

As of April 19, 2011, all federal commercial waters in the gulf were open for fishing. BP agreed in March 2011 to pay $16 million to Alabama for tourism promotion and has agreed to pay $30 million to Florida and $16 million to Mississippi for the same purpose. Discussions with Mississippi and Alabama are under way about contributions for seafood testing and marketing, it reported.

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