BP Swings to Profit on Production Gains

BP swung to a profit in the fourth quarter as oil and gas production rose and reserves increased.
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LONDON (

TheStreet

) --

BP

(BP) - Get Report

, Europe's largest oil company, swung to a profit in the fourth quarter as oil and gas production rose and reserves increased.

BP, in a statement Tuesday, said production rose 4% in the quarter, ahead of its expected long-term average growth of 1% to 2%.

Fourth-quarter earnings were $4.3 billion vs. a year-earlier loss of $3.34 billion. Replacement cost profit was $3.45 billion, up from $2.59 billion in the same period in 2008. Underlying replacement cost profit, before items and accounting changes, rose 70% to $4.4 billion.

BP said upstream production in 2010 is expected to be slightly lower than in 2009, when the hurricane season wasn't significant. The anticipated production remains in line with previous guidance provided by BP. Production growth is expected to resume in 2011.

BP said refining earnings were impacted by extremely weak trading conditions, particularly in the fourth quarter. However, operational improvements across all of BP's refineries resulted in refinery availability of 94%.

BP expects recovery in the major economies of the U.S. and Europe to be "slow and gradual," said BP Group CEO Tony Hayward. The company expects gas markets to remain volatile and refining margins to remain depressed for the foreseeable future.

BP said it would pay a quarterly dividend in March of 14 cents a share (84 cents per American depositary share), the same as a year earlier.

BP rival

Exxon Mobil

(XOM) - Get Report

topped fourth-quarter forecasts Monday, though its

earnings tumbled 23%

in the fourth quarter as refining operations were hit by dwindling margins.

-- Reported by Joseph Woelfel in New York.

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