BP returns to profit

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LONDON, Nov. 2 (UPI) -- European oil major BP Tuesday reported a return to profit in the third quarter after record losses following the Gulf of Mexico oil spill.

Profit was $1.8 billion in the three months from July until September, compared with losses of more than $17 billion at the end of the second quarter.

"These results demonstrate that BP is well on track for recovery after the tragic accident on the Deepwater Horizon drilling rig and subsequent oil spill," BP's new Chief Executive Officer Bob Dudley said in a statement.

The figure was still significantly less than the $5.3 billion BP reported in profits during the same period last year, however.

The company had to set aside an additional $7.7 billion to cover expenses related to the April 20 Deepwater Horizon oil rig accident, which killed 11 workers. The rig spilled an estimated 170 million gallons of crude into the gulf until it was capped July 15.

BP cited a delay in finalizing the relief well, decontaminating and demobilizing vessels and additional legal and administration proceedings for the increase in costs, which total nearly $40 billion.

BP wants money from the other companies that own shares in the Macondo oil well that spilled in the gulf, and has sent a $2.6 billion bill to Texas oil firm Anadarko Petroleum Corp., and a $1.9 billion bill to Japan's Mitsui Oil. Both firms have held off on paying the bills.

Dudley has begun to restructure BP to cut costs and increase profits after the spill, which has slashed the company's share value by around 35 percent. He has launched a new safety and operational risk unit tasked with improving exploration safety, and has fired the head of operations responsible for offshore drilling in the gulf.

In a bid to become leaner, BP is trying to sell off some $30 billion in assets by the end of next year, a program that is "making good progress," the company said.

Assets worth $14 billion have already been sold, with BP holding nearly $13 billion in cash. BP has recently benefited from rising oil prices and Dudley said he plans to resume paying dividends in early 2011 after the company has stopped doing so due to the spill.

TNK-BP, BP's Russian oil venture, is to buy assets in the gulf, Venezuela and Vietnam.