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BP profits dip on Gulf of Mexico clean up costs

Profits at oil giant BP have fallen as the costs of the 2010 Deepwater Horizon blast continue to affect the firm.

Replacement cost profit for the first quarter from January to March was $5.5bn (£3.33bn) compared with $5.6bn for the first quarter of 2010.

The firm said it had incurred costs of $400m during the quarter as part of its efforts to clean up the Gulf.

BP's output has also dropped as the firm has sold oil fields and refineries to help pay for the the clean up costs.

US regulators have banned drilling in the Gulf, further restricting the BP's production levels.

The firm said output levels had fallen by 11% compared to the same quarter a year before.

BP's accounts for 2010 set aside $41bn to pay for the Gulf spill - two and a half times more than BP's entire profit in 2009.

However, in February the firm said there was still "considerable uncertainty" over the final cost to the company of the Gulf spill.

BP says the majority of the subsea clean up work had now been completed.

BBC News

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