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BP chief Bob Dudley. Image courtesy of BP.

BP said Tuesday that its first quarter profits slipped by nearly $600 million from last year as it tries to navigate volatile oil prices.

The company’s first quarter profits fell to $2.6 billion from $3.2 billion during the same period in 2014.

BP’s upstream unit saw its underlying pre-tax replacement cost profit drop to $0.6 billion in the first quarter, including a $545 million loss, down from $4.4 billion during the first quarter of 2014.

“We are resetting and rebalancing BP to meet the challenges of a possible period of sustained lower prices. Our results today reflect both this weaker environment and the actions we are taking in response,” BP chief Bob Dudley said.

The company’s downstream unit reported an underlying pre-tax replacement cost profit of $2.2 billion for the quarter, a healthy spike over the $1 billion the unit earned in the first quarter of 2014.

“The result reflects the stronger overall refining environment, increased refining improvisation and production, and improved marketing performance,” the company said.

BP also booked a $215 million non-operating restructuring charge, bringing total restructuring charges to $648 million compared with an estimated $1 billion in charges it expects to take before the end of the year.

The company’s estimated underlying net income from its 19.75 percent stake in Russia’s Rosneft dropped to $183 million in the first quarter from $270 million during the same period last year.

Overall oil and gas production including Russia totaled 3.3 million barrels of oil equivalent per day in the first quarter.

The company said it’s also on track to complete a $10 billion divestment program by the end of the year.

So far, the company has divested from $7.1 billion in assets including the recent sale of its operating stake in Central Area Transmission System (CATS) to Antin Infrastructure Partners.

Operating cash flow for the quarter was $1.9 billion, including a working capital build of $2.5 billion, down from $8.2 billion a year earlier.

At the end of the quarter BP’ said its net debt was $25.1 billion, equivalent to a gearing level of 18.4 percent.

The company also announced a stable quarterly dividend of $0.10 per share that is expected to be paid in June.