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. Last Updated: 07/27/2016

BP Reaps $3.7Bln in Q1 Amid War, Strife

LONDON -- Giant British oil firm BP PLC delivered its biggest ever quarterly profit Tuesday, boosted by high oil prices amid war in Iraq, strikes in Venezuela and unrest in Nigeria.

Net profit, adjusted for exceptional items and to reflect the current cost of supplies, grew 136 percent from a year earlier to $3.73 billion, at the top end of analysts' expectations, as supply concerns linked to events in these three key producing nations boosted the price of crude oil.

The Venezuela strike also shut in significant fuel exports to the United States, sending the price of fuel higher around the world and offering BP and its rivals some of the best refining profit margin conditions of recent years.

High U.S. natural gas prices also helped work their magic for BP, the world's third largest energy group and Britain's biggest company by stock market value. With U.S. acquisitions in recent years, BP has become the dominant supplier of natural gas there.

However, the stronger than expected results did nothing to boost BP's share price immediately after the result. BP's stock has languished for several months relative to its peers, under the shadow of last year's missed production growth targets.

Investors are also reluctant to buy in the sector as oil prices slide from recent highs.

BP's shares stood barely changed from before the announcement, up 0.6 percent at 405-1/2 pence.

As flagged in a trading statement last month, BP's refining performance was not as good as indicators suggested, and its chemicals arm did badly.

"They looked good at the top but when you read more into the statement there are some uncertainties," said one dealer. "They talked about weak demand for chemicals and said refining margins were slightly below average."

Though still smarting from the disappointments of 2002, BP turned in oil and gas output growth of 3 percent in the quarter compared with a year earlier. Some analysts had expected 2 percent.

BP's profits last peaked two years ago in the first quarter of 2001, when a similar conjunction of strong prices helped deliver adjusted net profit of $3.71 billion.

The company paid a dividend of 6.25 cents, unchanged from the fourth quarter. Chief executive John Browne promised more dividend growth and share buybacks from strong cashflow of $6 billion net from operating activities, up from $3.6 billion a year ago.

"Cash flow is robust, providing the opportunity for a good shareholder return through dividends and share buybacks," Browne said.