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Oil prices boosting BP's fortunes

Oil giant BP has reported buoyant trading in the three months to September, with production up by 11%, on the back of soaring crude prices.

BP's coffers have been boosted by oil's record breaking run as crude continues to flirt with the $50-a-barrel mark.

Meanwhile, the firm plans to continue its share buy-back programme.

Overall production in the third quarter rose to 3.88 million barrels of oil a day, while production for the year is expected to show a 10% increase.

Russia delivers

The UK's biggest company said output was driven largely by its Russian interests from its TNK-BP venture which has ramped up production.

Excluding TNK-BP, BP's production in the third quarter fell to 2.93 million barrels a day, down from 3.08 million in the second quarter due to planned maintenance in both the North Sea and Alaska.

The operational impact of Hurricane Ivan in the Gulf of Mexico and a blow-out at Temsah in Egypt was partially offset by oil from new fields in Algeria and Angola which started flowing during the quarter, BP said.

Buybacks

Refining margins rose on the year but were down from the record levels seen in the three months to June.

Gas marketing margins are expected to be down "significantly" compared with the previous quarter, the company added.

BP said its full-year profits would rise by about $570m (£318m) for every $1 rise in the Brent crude oil price.

However, increases in export duty rates in Russia, which took effect on 1 August, will cut pre-tax earnings by around $100m in the third quarter, BP said.

The company has promised that it will return cash to shareholders either through buybacks or higher dividends, providing oil prices stay above $20 a barrel.

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