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BP reports a slip in profits in first quarter

The oil giant is still paying for the Gulf of Mexico oil spill.

The oil company BP has reported a major drop in profits in the first quarter, with 

The group reported a 12.5 per cent fall in replacement cost profit, to $4.93bn (£3bn) in the quarter, against a $5.61bn profit in the same period last year.

BP is losing money after being forced to sell fields to pay for the oil spill in the Gulf of Mexico in 2010. The spill, which has been named the worst accidental oil spill in history, took place after the explosion and sinking of BP's Deepwater Horizon oil platform about 40 miles off the Louisiana coast. The oil giant has so far paid $16.6bn into a compensation fund and expects to meet the $20bn target this year- a year earlier than planned.

Bob Dudley, the BP chief executive, was positive about the figures. The Telegraph reported today that he said: "We have made a good start against our strategic priorities for 2012. During the quarter we gained access to significant new deepwater and US shale exploration acreage, our ongoing divestment programme has reached $23bn, and we have five deepwater rigs at work in the Gulf of Mexico. This operational progress will underpin the financial momentum we expect to come through as we move into 2013 and 2014."

BP said that oil and gas production, excluding its Russian joint venture, TNK-BP, was down 6 per cent at 2.45 million barrels of oil equivalent per day.