02 October 2001 18:19 [Source: ICIS news]
LONDON (CNI)--Hopes of a third quarter revival in BP's chemicals operations were virtually ruled out on Tuesday when the UK-headquartered energy group said that, due to sluggish economic conditions, margins and demand for products remained weak.
The weighted chemicals indicator margin* which stood at $111/tonne in Q1 2001, decreased to $108/tonne in Q2 2001 but no figures were given for Q3.
In its third quarter trading update, however, BP said the Chocolate Bayou, Texas, Grangemouth in Scotland and Lavera, southern France petrochemicals sites were now fully operational again.
These sites suffered serious outages earlier in the year, which depressed second quarter operating profits by about $100m and helped leave BP's chemicals operations at little better than break-even.
Higher Q3 oil and gas production plus increased refinery throughput, however, enabled BP to shrug off growing economic gloom and US terrorist attacks to forecast that it is broadly on-track to achieve full-year group targets for increased hydrocarbon production and profits.
BP stated: "The tragic events of September 11 are expected to have no material impact on Q3 results."
For the whole group, hydrocarbons production for the full year 2001 is expected to increase by 5.5% over 2000. Production for Q3 is expected to be up around 3% on Q3 2000.
BP said it remains on course to deliver a $2bn (Euro2.19bn) improvement in pre-tax profit in 2001, and that all downstream refineries are operating normally.
The G4 cracker at Grangemouth, however, which was taken off line about two weeks ago, following a fault, is still down for maintenance and will remain offline for one to two weeks.
*The chemicals indicator margin is a weighted average of externally based product margins. It is based on market data collected by consultant Chem Systems in its quarterly market analyses, before being weighted on BP's product portfolio.
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