BP profit climbs 17% despite expenses from Gulf oil spill

WASHINGTON — Bolstered by soaring crude oil prices, BP reported a 17 percent increase in first-quarter profits and sought to convince investors that it was coping with the costs of the massive oil spill in the Gulf of Mexico last year.

The company's earnings did show signs of spill damage. Asset sales last year, which were carried out to fund the costs of spill cleanup and damages, helped shrink the oil giant's production of oil and natural gas by 11 percent compared with the first quarter of 2010. BP also set aside an additional $400 million to cover spill costs, on top of the $40.9 billion it had already reserved for those costs.

But the company, whose stock had plunged in the wake of the April 20, 2010, blowout on its Macondo well, also showed signs that it is managing the impact of the spill and will survive with many lucrative assets intact.

Though smaller than it was a year ago, the London-based firm still produces the equivalent of 3.58 million barrels a day of oil and natural gas. It received an average of $93.93 for every one of those barrels, up from $71.86 in the first quarter of 2010. Even after $2.8 billion in cash went to spill-related expenses in the first quarter, including an installment for the escrow fund, BP still had $2.4 billion in free cash flow and an ambitious exploration budget. Its debt has inched up to $27.5 billion, only a slight rise from $25.2 billion a year ago.

BP's earnings drew fire from members of Congress who have criticized the company's actions related to the blowout. Some of them joined President Obama in calling for an end to tax incentives that the oil industry has enjoyed for many years.

BP reported $7.1 billion in profits, up from $6.1 billion in the first quarter of 2010.

Other oil companies have also started to report first-quarter earnings, which could turn out to be the second- or third-most-profitable quarter ever for the industry.

ExxonMobil and Royal Dutch Shell report earnings Thursday, and Chevron reports earnings Friday.