Oil giant BP said yesterday it was boosting its interests in the North Sea by acquiring Total’s stakes in two Norwegian oil fields for more than £640million in cash.
It said it was buying a 15.7% holding in the Valhall field and 25% in Hod. Both fields are already operated by BP, which will have a 43.8% stake in Valhall and 50% in Hod following the deal.
The announcement came on the same day as BP reported that profits hit £3.6billion in the first three months of 2010, more than double the profits a year earlier and much higher than City forecasts.
However, the oil major’s recent performance has been overshadowed by last week’s explosion at the rig Deepwater Horizon, which was drilling for BP in the Gulf of Mexico.
Eleven of the 126 workers on board at the time are missing and presumed dead, while oil is leaking from the sunken rig and spreading towards the vulnerable US Gulf coast.
Last night, the oil slick covered an area 48 miles long by 39 miles wide. BP has mobilised two rigs to drill a relief well if needed, which could help redirect the oil, but the well could take weeks to complete and could cost around £65million.
The Deepwater Horizon, owned by Transocean, was drilling about 40 miles off the delta of the Mississippi River when it exploded.
BP chief executive Tony Hayward said improved weather conditions were helping the recovery effort.
“This, combined with the light, thin oil we are dealing with has further increased our confidence that we can tackle this spill offshore,” he added.
The 135% first-quarter profits rise comes after the price of crude oil has firmed on recovery hopes for the global economy and due to market speculation.
The results compare with the depths of the recession in the first quarter of 2009, when crude prices averaged just above $41 a barrel. Yesterday oil was trading at above $83 in New York and above $86 in London and the average for the first quarter was $76.
BP failed to reassure investors with yesterday’s profits, as the oil major’s shares fell on growing fears about the impact of the worsening oil spill in the Gulf of Mexico. BP shares shed 16.8p or more than 2% to 610p.