Oil giant BP said its production of oil and gas fell in the first quarter of 2006 compared to the same period last year, but it signalled an improvement in its refining business.
The world's second-largest listed oil company by market capitalisation said in a statement today that it produced 4.025million barrels of oil equivalent per day (boepd) of oil and gas in the first quarter.
This compares with 4.1 million boepd in the first quarter of 2005.
Worryingly for investors, non-Russian production - BP's most profitable - was down compared to the first quarter of 2005, the second consecutive year-on-year fall.
However, that was countered by BP's earlier indications that planned output growth in 2006 would come mainly towards the end of the year and news that Gulf of Mexico production was recovering after damaging Hurricanes last year.
BP's shares rose 1.13 per cent to 672p at 7:30am compared to a 0.84 per cent rise in the DJ Stoxx European oil and gas sector index.
"Generally, it was a positive trading statement with more positives than negatives," said Dominic Ellis, oil analyst at Man Securities.
The London-based company flagged some improvements at its refining business, which analysts had not expected. "Compared to Q4 2005, the result in Q1 2006 is expected to benefit from strong supply optimisation, a lower level of refinery turnarounds (other than at Texas City) and seasonally lower costs," BP said.
BP said this was expected to offset lower refining and marketing margins, compared to the fourth quarter.
BP said the prices it received for its oil and gas output in the first quarter broadly reflected the rise in market benchmarks such as Brent crude, which rose to an average of more than $61 a barrel from almost $57 in the previous quarter.