TNK-BP profit down on lower crude prices, taxes

Russia's third-largest oil producer TNK-BP International said today its second quarter net profit was down to $808 million from $2.2 billion a year ago due to lower crude prices and higher taxes.

The company, half-owned by BP, said Russian Urals crude oil prices fell 7 per cent during the period, while it had to fork out a higher export tax, an extra $14 per barrel, due to a time lag in taxation.

TNK-BP's earnings before interest, taxes, depreciation and amortisation (EBITDA) fell to $2.25 billion from $3.43 billion in the year-earlier period.

Second quarter EBITDA was hurt by the effects of foreign exchange fluctuations on mineral tax payments, according to the company.

TNK-BP's revenue for the period fell to $14.26 billion from $15.38 billion a year ago and the company said it increased capital expenditures by 8 per cent to $2.4 billion from the year-earlier period.

Meanwhile,  BP is talking to potential buyers for its share of the TNK-BP venture, the 50:50 joint venture with AAR, a consortium representing several Russian tycoons, which BP had signed a decade ago to access Russia's vast energy reserves. The group's worth is estimated at $60 billion.