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BP, Amerada Hess Post Strong Quarters

Spiking oil prices helps boost margins.
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both posted higher profits in the first quarter thanks to the war-related runup in oil prices.

U.K.'s BP, the world's third-largest oil producer, said first-quarter net income more than doubled because of a rise in oil prices following war in Iraq and social turmoil in Nigeria and Venezuela.

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The company said so-called replacement-cost results, a standard industry measure that is adjusted for special items, rose to $3.73 billion, or $1 per American depositary share, from $1.6 billion last year. That beat analysts' estimates by 9 cents. Excluding effects of changing values in oil inventories, the so-called replacement-cost profits were $3.13 billion, compared with $924 million, a year earlier. These results are not based on generally accepted accounting principles.

"Oil markets have been driven by the impact of war in Iraq, together with the loss of Venezuelan and Nigerian exports and a cold winter in the northern hemisphere," said BP's chief executive officer Lord John Browne.

BP also said oil production in the first quarter jumped to a record 3.6 billion barrels a day, 3% higher than a year earlier. This was a result of increased production in oil fields in areas such as the Gulf of Mexico and Trinidad.

Meanwhile, Amerada Hess first-quarter profits rose almost 25% because of higher oil and gas prices. The company said first-quarter net income grew to $176 million, or $1.98 a share, compared with earnings of $141 million, or $1.58 a share, in the year-ago period.

Excluding special items, the integrated oil company had a profit of $2.43 per share. On that basis, it beat analysts' estimates of $1.88 a share, according to Thomson First Call.

Revenue climbed 45% to $4.3 billion from the previous year, despite the company's oil and gas production having declined to 421,000 barrels per day in the first quarter, a fall of 8% from 2002.

Amerada Hess operates both in upstream production and downstream refining, so it said its refining margins were also helped by a shortage in oil inventories. The company said its downstream business had a profit of $136 million profit following a loss of $22 million last year.

Shares of BP were 0.2% lower at $38.65 while Amerada Hess declined 0.8% to $44.79.