While BP is renewing its focus on non-renewable resources, the company has posted a 29 percent drop in third-quarter net income, to $4.4 billion from $6.23 billion in the same period last year. Citing problems in its U.S. refineries, oil and gas production in the latest three-month period fell to 3.65 million from 3.8 million barrels per day.
Recently appointed CEO Tony Hayward did not make an appearance on the quarterly conference call (transcript by Seeking Alpha). Instead, CFO Byron Grote and Fergus McLeod, who heads up the firm’s investor relations department, handled analysts’ questions. While almost every query focused on traditional energy resources, two comments were worth noting.
First, Grote confirmed that BP (BP) would put $18 billion towards capital expenditures for 2007, and while most of that will go to traditional energy, some will trickle to cleantech.
Second, McLeod gave an interesting response to Joseph Tovey’s question about consumers switching to diesel. More diesel cars on the road would obviously provide a larger target for biodiesel manufacturers.
Joseph Tovey, Tovey & Co.: [D]o you have a view as to whether there is going to be a dieselization of the product barrel…at the expense of gasoline?
Fergus McLeod, IR Director, BP: [T]here [has] been [a] significant shift in that direction in Europe and we have made investment plans to meet that increase in diesel demand most recently.
McLeod then turned the company lens to the U.S.:
It’s always an interesting question as to whether consumer preferences in the United States will shift towards diesel vehicles. We have seen that happen dramatically in Europe and elsewhere. There’s not much sign of it at the moment in the U.S., but clearly we would invest to follow that trend.