BP posts decline in second-quarter earnings

BP's shares plunged after the oil giant posted a fall in second-quarter earnings that fell short of analysts' expectations. Underlying profit came to $2.7bn in the quarter, down 25% from a year earlier. Analysts predicted a profit of $3.4bn.The FTSE 100 group blamed lower oil prices, an unusually high tax rate of 45% compared to 35% last year and lower post-tax from Russia due to a lagging of oil export duty.The firm also increased its provision for the settlement it agreed last year with private sector plaintiffs over the 2010 Deepwater Horizon explosion. BP lifted provisions by $1.4bn to $9.6bn compared to BP's initial $7.8bn for the settlement.In early July BP failed in its effort to freeze compensation payments made under the settlement as it awaited an investigation into accusations of misconduct at the office of Patrick Juneau, the claims administrator. The company claims Juneau's interpretation of the settlement led to "absurd" payments to people not affected by the spill.BP warned on Tuesday the total cost of the settlement would be "significantly higher" than the current $9.6bn even if they are successful. During the period, BP's production excluding Russia dropped 1.5% to 2.24m barrels of oil equivalent a day, as divestments offset rising output from major projects in Angola and Norway.Shares were down 3.31% to 451.95 at 15:03 on Tuesday.RD