BP Profit Falls 53% on Lower Oil Prices

Updated from 2:54 a.m. EDT

LONDON ( TheStreet) -- BP PLC ( BP), Europe's second-largest oil company, said second-quarter earnings fell 53% to $4.39 billion from $9.36 billion a year earlier when oil prices were much higher.

BP's second-quarter replacement cost profit, a key measure for oil companies, was $3.14 billion, down 53% from $6.75 billion in the same period a year earlier.

The price of oil fell sharply from a year earlier. Brent Blend oil averaged $59.13 a barrel in the second quarter compared with $121.18 in the second quarter of 2008.

The company will pay a quarterly dividend in September of 14 cents a share, the same as a year earlier.

In a statement Tuesday, BP said its reported daily production jumped 4% in the quarter from a year earlier.

The oil company also said the targeted reduction in cash costs of $2 billion for 2009 already has been exceeded and it expects $1 billion more in savings over the remainder of the year.

CEO Tony Hayward said he expected energy demand to be sluggish in the near term.

"The overall picture is of energy demand now stabilizing following significant falls in the first half of the year. We see little evidence of any growth in demand and expect the recovery to be long and drawn out," he said.

-- Reported by Joseph Woelfel in New York.

Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.

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