The company's production dropped by 8.5% to 2.13 million barrels of oil equivalents per day, partly due to maintenance. The company has forecast a further decline in production in the current quarter as it continues to work on its major oil fields.
Over the long term, however, BP will likely report growing levels of production. The company has recently re-entered the Gulf of Mexico after it successfully bid for 24 out of 31 blocks.
During the next decade, the company said it will spend an average of "at least $4 billion" per year to develop its deepwater assets at the Gulf. Moreover, the company is separating its onshore business in the U.S., focusing on the Lower 48 states (excluding Alaska) in an effort to unlock the value of that business.
With growth in production and a focus on higher-margin areas such as Gulf of Mexico, North Sea and Angola, BP will likely start reporting revenue and profit growth long term.
BP still has significant exposure to Russia. BP owns nearly 20% of Rosneft, an integrated oil company which is controlled by the Russian government through OJSC ROSNEFTEGAZ, a 100% state-owned enterprise with a 70% stake in Rosneft. Rosneft is responsible for more than 40% of Russia's oil production and nearly a third of BP's global production.
Amid the ongoing Ukraine crisis, the United States has placed sanctions on several Russian individuals, including Igor Sechin, the president of the Russian oil behemoth.
It appears that, BP, which is run by Bob Dudley, a U.S. citizen, might find it difficult to conduct business with Sechin. However, both Sechin and Dudley have repeatedly claimed that their partnership remains strong.
Americans are prohibited from doing business with individuals and organizations on the sanctions list, which does not include Rosneft. The Russian oil giant has projects scattered all over the world, and is also working with Exxon Mobil (XOM) to develop the Russian Arctic and the Black Sea. Like BP, Exxon Mobil has also reiterated that its Russian project remains on schedule.