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BP profits down, Deepwater Horizon costs up

High oil price still offset by Gulf clean-up costs for BP.

BP has made firstly quarterly profits for 2011 of $5.481bn - down 2 per cent on last year's $5.598bn.

The drop is a result of new clean-up costs in the Gulf of Mexico following the Deepwater Horizon disaster. BP has now been charged an extra $400m on top of the $40.9bn it had previously designated for the clean-up.

Giving their quarterly results on Wednesday, BP said it has agreed a $1bn early restoration programme for natural resource damage in the Gulf. The Coast Claims Facility have so far received 267,960 compensation claims from individuals, with over half still to be processed.

The clean-up amount comes largely from assets that BP has sold off, meaning the production of oil has slowed to 3.578m barrels a day. It has now been a year since an explosion at the Deepwater Horizon rig caused a spill of 5m barrels worth of oil into the Gulf of Mexico.

Alice Gribbin is a Teaching-Writing Fellow at the Iowa Writers' Workshop. She was formerly the editorial assistant at the New Statesman.