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. Last Updated: 07/27/2016

TNK-BP's 2008 Profit Little Changed on Lower Oil Price

TNK-BP said 2008 profit was little changed from a year earlier as the ruble weakened against the dollar and oil prices fell faster than export taxes, chief executive Tim Summers said Wednesday.

Net income was $5.3 billion, Summers told reporters, without giving year-earlier figures. Earnings before interest, tax, depreciation and amortization advanced 5 percent to $10.1 billion, and sales increased 33 percent to $51.9 billion.

TNK-BP posted a profit of about $1.5 billion in the first quarter of 2009 and plans $3 billion in capital expenditures this year, Summers said. TNK-BP is also considering mergers and acquisitions in Russia and overseas, he added.

"We currently have a healthy cash position, and we will consider now what will be the right thing to do with it," Summers said.

The company, half-owned by oil major BP, increased oil and gas production by 3.9 percent year on year in the first quarter. It expects output for the full year to be near the 601 million barrels of oil equivalent produced in 2008.

"We will be very prudent. We've cut our cloth to match the environment that we now face, with oil at $48 to $49 a barrel, not $140 a barrel," he said.

Chief financial officer Jonathan Muir told the same briefing that TNK-BP had a cash balance of $1.9 billion at the end of the first quarter and has "manageable near-term debt maturities."

Muir said 2008 was "a year of two halves." In the second quarter of 2008, as crude prices rose to record highs, TNK-BP booked a $1.2 billion benefit from the lag between oil prices and Russian export duties.

In the fourth quarter, the sharp decline in oil prices and the same lag in duties cost the company $1.4 billion, Muir said.

(Reuters, Bloomberg)