BP second-quarter profit falls, new projects to support production

By Ron Bousso and Karolin Schaps

LONDON (Reuters) - BP's second quarter profits dipped but beat forecasts after an exploration write-off in Angola, while oil and gas production rose sharply with the start-up of new projects.

The British company also increased cash flow from operations in a further sign that efforts by top oil companies to cut costs over the past three years in response to low oil prices are paying off.

"We continue to position BP for the new oil price environment, with a continued tight focus on costs, efficiency and discipline in capital spending," Chief Executive Bob Dudley said in a statement.

Despite the sharp slowdown in the sector's activity since the slump in oil prices in 2014, BP is set to launch seven oil and gas projects in 2017 -- the largest number in a single year in its history.

BP's production was up 9.9 percent from a year earlier to 2.431 million barrels of oil equivalent per day helped by some of these new start-ups.

BP said its oil and gas production will be broadly flat in the third quarter as further project start-ups outweigh the impact of maintenance.

In May, BP started production at the Quad 204 oilfield in the North Sea after a $5.7 billion redevelopment, one of the largest such projects there in recent years.

BP's quarterly underlying replacement cost profit, the company's definition of net income, came in at $684 million, topping the $500 million forecast in a company-provided analyst consensus.

That was down from $720 million a year earlier and $1.51 billion in the first quarter.

The results were impacted by a $750 million charge for unsuccessful exploration campaigns in Angola.

(Reporting by Ron Bousso; editing by Jason Neely)