Tale of woe from BP as oil soars

OIL producers are making hay as the crude price soars, but giant BP is suffering in its 'downstream' chemical and marketing operations.

As North Sea crude edged higher to $27.50 a barrel, BP warned that profit margins had slumped 30% on refining and 45% on marketing since the last quarter of 2001. Oil and gas output was no higher than a year ago.

A mild US winter and cutbacksin aviation hit demand. BP fell 15p to 610p, rival Shell 13p to 507p.

Profits in the current quarter should be boosted by the sharp rise in crude.

Tullow Oil, which bought a clutch of North Sea gas fields for £201m from BP last year, can hardly believe its luck as they spew out cash.

It has already halved the £160m debt it took on to buy them.

Pretax profits for 2001 soared from £793,000 to £16m and chief executive Aidan Heavey even talks of paying out a dividend in future.

Tullow fell 3 1/2p to 106 1/2p, where it is valued at £380m. It will be the second largest 'independent' explorer once Enterprise Oil disappears.