BP Q2 Profit Misses Estimates

BP BP, Europe's second-largest oil company, reported a second-quarter profit of $5.6 billion, reversing a year-earlier record loss of $17 billion following the Gulf of Mexico oil spill, but even with the profit, the British oil giant missed the $5.9 billion analysts were expecting. Barring any major surprises, BP's profit will lag the $6.6 billion expected of bitter rival Royal Dutch Shell RDS, Europe's largest oil company when it reports its second-quarter results on Thursday. BP said its second-quarter results were bolstered by higher oil prices and improved refining margins. Last week, Bank of America Merrill Lynch, JPMorgan and UBS said BP should follow in the footsteps of U.S. rival ConocoPhillips COP, the third-largest U.S. oil company, and spinoff its downstream businesses to unlock shareholder value. JPMorgan Cazenove recently said BP could unlock $100 billion in shareholder value by breaking the company up because its assets are worth $248 billion, but the company has a market value of less than $148 billion. Global refining margins rose to an average of $13.92 a barrel in the second quarter from $11.04 year ago, according to Bloomberg News. In the second quarter, BP produced an average of 3.43 million barrels of oil equivalent per day, down 11% from the year-earlier period, highlighting the effects of $25 billion in asset sales the company has engaged in to raise cash for liabilities tied to the Gulf spill. On Monday, BP said it won licenses for two deep-water blocks in Trinidad and Tobago and added that it has gained access to 31 exploration blocks around the world since July 2010.