BP expects its oil and gas production to have fallen 2.5 per cent in the second quarter to raise the challenge the company faces in meeting growth plans.
BP said today that output was likely to fall to around 4.01 million barrels of oil equivalent per day (boepd), although higher oil prices during the quarter suggest earnings will still beat the same period of 2005.
The production figure is just short of a Citigroup forecast of 4.02 million boepd, and compares with 4.112 million boepd in the second quarter of 2005.
BP shares lagged rivals on the news, trading flat at 630 pence this morning, against a 0.36 per cent rise in the DJ Stoxx European oil and has sector index.
Production rose 12 per cent at BP's Russian joint venture TNK-BP from the same period last year, to one million barrels per day. But output fell 4 per cent across the rest of the portfolio, where margins are higher due to lower taxes.
The drop was mainly due to divestments, the world's second largest fully publicly traded oil company by market capitalisation said.
Nonetheless, the fall will make it harder for BP to meet its goal of raising production to between 4.1 and 4.2 million boepd in 2006.