LONDON - Struggling oil major BP will seek to reassure investors about its battered reputation when it posts annual results and a strategy update Tuesday.
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Analysts expect BP to report a significant drop in profits after six successive quarters of lower oil and gas production, despite soaring oil prices. But the focus will be on the company's plans to restore confidence in its business following a series of high-profile mishaps, including a deadly refinery blast in Texas and a costly oil spill in Alaska.
The company has already taken some steps toward repairing its reputation with investors and the public, particularly in the United States.
It announced last month that Chief Executive John Browne would step down by the end of July, bringing his expected departure forward by more than a year. Browne, 58, whose ability to stay in control of the company had been the subject of intense speculation, had announced in July that he would step down at the end of 2008.
He will be succeeded by Tony Hayward, the current head of exploration and production, who oversaw BP's expansion trail into the United States, involving a number of takeovers, including the 1998 merger with Amoco and the subsequent acquisitions of Arco and Castrol. Andy Inglis, a veteran of the company's upstream business, will take Hayward's job.
But analysts said Tuesday's earnings announcement will need to show the company is taking further steps.
"BP's management must step up to the plate. We believe a 'business as usual' approach will not be acceptable to a skeptical market," said Investec analyst Tony Eccles.
BP shares underperformed on the London Stock Exchange's FTSE 100 index by 17 percent last year, one of its worst performances in a decade.
The stock did pick up 1.5 percent Monday to 542.5 pence ($10.62) after Goldman Sachs raised its recommendation for the oil producer to "buy" from "neutral," citing an improving outlook and "attractive valuation" in the share price.
Analysts expect BP's adjusted net profit - earnings before extraordinary items and excluding changes in the value of inventories - to come in around $3.8 billion to $3.9 billion, a fall of around 22 percent from last year's $4.99 billion.
Investors are hoping that the company's U.S. woes are at an end and that it will take heed from an independent report released last month into the 2005 Texas City explosion, which found that BP failed to emphasize safety at its U.S. refineries. The blast killed 15 people.
The panel, led by former U.S. Secretary of State James A. Baker III, said the company had made strides in personal accident prevention but came up short on the bigger picture.
BP was also forced to temporarily close some of its operations at the Prudhoe Bay oil field in Alaska because of a major pipeline spill.
It also delayed the opening of its key Thunder Horse platform in the Gulf of Mexico because of equipment failure. U.S. authorities are also investigating allegations that the company was involved in illegal price-fixing in the propane market.
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