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City File: Oil shortage

Saturday 06 February 1993 19:02 EST
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DON'T let BP's results, due on Thursday, delude you. Profits of up to pounds 200m in the fourth quarter will look good after a year in which BP halved its dividend and changed its chairman.

At the expected dividend of 2.1p, the shares - up 22p on the week at 267p - will yield over 5 per cent. But that is all that can be said for them.

'The new chairman is doing all the right things,' says John Toalster of SG-Strauss Turnbull. 'But this is not going to be enough. Even the 'new' BP won't be in the right place, for instance, in the Far East.'

BP can no longer rely on big oil finds. Its new discoveries, especially in Colombia, are not of the size required for the company to do better than the market. And the slightest sign of a break in the oil price, or a fall in the dollar, could send the shares back below 200p.

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