BP profits fall by 45% as low oil prices bite

ENERGY giant BP said today that annual profits almost halved as the effect of lower oil prices took its toll.

The UK company reported a surplus of 8.75 billion in the year to December 31, down 45 per cent on 2008.

Profits for the final quarter rose 33 per cent to 2.16bn, but this was below City forecasts.

BP said the lack of a significant hurricane season helped "very strong" production last year, with a particularly mild season in the Gulf of Mexico meaning relatively few disruptions to oil and gas production.

As a result, the firm said it expects 2010 to be at a lower level, but its long-term production guidance remains unchanged.

The company reduced staff numbers by 3,000 in 2008 with another 5,000 jobs shed last year, amid estimated cost savings of 2.5bn.