BP has said fourth-quarter profit declined as oil and gas production slipped at Europe’s second-biggest energy company.

Net income fell to $1.6 billion from $7.7 billion a year earlier, the London-based producer said. Adjusted for one-time items and changes in inventory, earnings were $4 billion.

Output excluding Russia fell 7 per cent to 2.3 million barrels a day from a year earlier. Chief executive officer Bob Dudley is focusing on the most profitable oil and gas after shrinking the company in the wake of the 2010 Gulf of Mexico oil spill.

BP is struggling to reverse production declines after selling off $38 billion in assets and divesting its stake in Russian venture TNK-BP – responsible for about a quarter of output.

BP says investment will rise this year to maybe $25bn from $23bn as it focuses on higher-margin projects. – (Bloomberg)