Broker snap: Disappointing final quarter for BP

1st Feb 2011 10:59

Charles Stanley has maintained its 'hold' recommendation on oil giant BP after the fourth quarter earnings outcome was 'below expectations' by as much as 10%.BP's earnings amounted to $20.5bn in 2010 ($14.6bn: 2009) while all charges relating to the Gulf of Mexico (GoM) oil spill amounted to $40.9bn. Production for the year was 4% lower at 3,822 million barrels of oil equivalent per day.Before the GoM tragedy last year, the broker notes that the group's strategy for growth over the 2015-20 timeframe was centred on the Gulf (where it is the largest lease owner).While BP has made some solid strategic progress in other regions - such as Australia, the North Sea, Indonesia, Egypt, Iraq and Russia - "the Gulf faces a slow recovery in deepwater activity for all participants and further drilling delays are likely," says analyst Tony Shepard.Since the Macondo well was sealed in September, the share price has recovered strongly, but the broker keeps its 'hold' ahead of any strategic changes.