HONG KONG/LONDON (Reuters) – BP’s (BP.L: Quote, Profile, Research, Stock Buzz) plan to sell a stake in its South American unit for $7 billion (4 billion pounds) has collapsed, potentially trimming the oil major’s cash flow and making it harder to raise its payout to shareholders.

China’s biggest offshore oil producer CNOOC Ltd (0883.HK: Quote, Profile, Research, Stock Buzz) said Sunday its 50 percent-owned unit Bridas Energy Holdings has terminated a deal to buy BP’s stake in Argentina-based oil and gas group Pan American Energy LLC BPPAE.UL (PAE).

BP hinted at its third-quarter results last month that it would announce an increase in its dividend in early 2012.

However, the failure of the sale of its 60 percent interest in PAE could mean cashflow is lower than might have been expected, making it harder to raise the dividend.

At the results, BP said the deal, initially signed last November, was not as important to the firm’s cashflow today as it was a year ago.

“We reached that agreement last year at a time when oil prices were lower. It was a time when we actually needed to make some divestments of properties. We’re past that point. We don’t actually need to make that divestment….if it doesn’t happen, it’s absolutely fine,” Chief Executive Bob Dudley told analysts at the time.

BP said in a statement Sunday it will repay a deposit of $3.5 billion received for the PAE stake at the end of 2010, which would not impact its level of gearing.

LONDON/HOUSTON (Reuters) – Oil giants Exxon Mobil Corp (XOM.N: Quote, Profile, Research, Stock Buzz) and Royal Dutch Shell Plc (RDSa.L: Quote, Profile, Research, Stock Buzz) said their profits jumped more than 40 percent in the third quarter as higher energy prices offset declines in their output.

Oil prices have sagged from their May peaks, but still remain well above the 2010 levels. Recent optimism that the global economy may be recovering has sent crude prices climbing 20 percent this month.

Still, the world’s two biggest publicly traded oil companies have struggled to stem a drop in their output, and record spending by Exxon of $26.7 billion for the first nine months of 2011 has not yet turned that trend around.

Exxon’s oil and gas output fell 4 percent to 4.28 million barrels of oil equivalent per day, lagging Wall Street expectations. Shell’s output slid 2 percent.

“Production was quite a bit lower than we were modeling,” Raymond James analyst Pavel Molchanov said Thursday of Exxon’s output. “It’s a recurring theme we’ve seen from peer companies.”

The dip in crude oil prices during the third quarter helped both Exxon and Shell lift their profit margins at their refineries and chemicals businesses, particularly in the United States.

Shell posted a 25 percent profit increase over year-ago levels at its refineries and chemicals businesses, and Exxon saw its refineries’ profits climb 36 percent.

LONDON, Oct 27 (Reuters) – Royal Dutch Shell Plc and Norway’s Statoil reported big jumps in profits on Thursday, driven mainly by higher oil and gas prices with help from increased production.

Shell, Europe’s largest oil company by market capitalisation, said its underlying current cost of supply (CCS) net income in the third quarter, excluding one-offs, soared 42 percent to $7.0 billion.

Statoil said its adjusted net income, which is calculated on the same basis, rose 50 percent in dollar terms to $2.07 billion in the third quarter.

Both companies’ earnings were broadly in line with analysts’ forecasts.

Shell’s London-listed “A” shares traded up 1.7 percent at 2,292 pence at 0809 GMT, compared with a 1.4 percent rise in the STOXX Europe 600 Oil and Gas index . Statoil shares rose 2.2 percent to 144.8 NOK.

Later on Thursday, Exxon Mobil, the world’s largest publicly-traded oil company, is expected to report a 40 percent jump in third-quarter net income to $10.26 billion, according to I/B/E/S estimates.

Chief Executive Peter Voser said Shell’s enormous investments in big new projects were beginning to pay off, pointing to growth in underlying production, although field sales pushed headline production down 2 percent to 3.01 million barrels of oil equivalent (boepd).

MOSCOW/LONDON, Oct 25 (Reuters) – Management at Anglo-Russian oil firm TNK-BP Ltd has asked its board of directors to sue shareholder BP for billions of dollars in damages over BP’s failed alliance with state-controlled rival oil firm Rosneft , sources said on Tuesday.

The move, revealed on the day both BP and TNK-BP announced their third-quarter results, threatens to add to the legal pressures already piling up on BP following its attempt to partner Rosneft in exploring for oil in the Arctic.

The Russian shareholders in TNK-BP are already pushing for an arbitration ruling that BP would be liable for what could be billions in dollars of damages for pursuing the deal with Rosneft in violation of a shareholder agreement under which TNK-BP is accorded the right of first refusal on BP deals in Russia.

Now the TNK-BP Ltd board will be asked to join litigation which has been started by a small shareholder in listed unit TNK-BP Holding , which is due to be heard in a court in the Russian oil town of Tyumen on Nov. 10.

“The management board has recommended to the board to consider doing this and it is expected that when it (the board) meets in November this issue will be discussed,” one source close to the local shareholders said.

The current litigant in Tyumen, shareholder Andrey Prokhorov, is claiming $13 billion in damages against BP and a further $2.7 billion against two BP nominees on the board of TNK-BP Holding for not involving TNK-BP in the Rosneft deal.

Chief Financial Officer Jonathan Muir declined to comment on the matter at a news conference on Tuesday after TNK-BP announced a 57 percent rise in third-quarter earnings to $2.3 billion.

LONDON (Reuters) – BP (BP.L: Quote, Profile, Research, Stock Buzz) has turned a corner after the Gulf of Mexico disaster, its chief executive said on Tuesday, predicting the British oil firm would now return to output and cashflow growth and rejecting calls for a fundamental restructuring of the group.

Europe’s second-largest oil group by market capitalization said its cashflow would be 50 percent higher by 2014 and it could restart a program of share buybacks and from next year begin to pay investors higher dividends.

“We expect to review our 2012 distribution plans in February, adjusting them in line with the improving circumstances of the firm,” BP said in a statement.

BP’s shares were up 3.9 percent at 455 pence at 0810 GMT (4:10 a.m. EDT), outperforming a 1.3 percent rise in the STOXX Europe 600 oil and gas sector index .

However, some analysts said the cashflow target was not as impressive as it sounded.

“The 2011 base in this target is heavily impacted by (Gulf of Mexico Macondo well) spill costs and the Macondo trust fund payments; stripping this out the cash flow growth target to 2014 actually looks broadly flat,” analysts at Citigroup said in a research note.

Chief Executive Bob Dudley said the group would sell another $10 billion worth of oil and gas fields, lifting the value of its asset sell-off plan in the wake of the Gulf of Mexico disaster to $45 billion, and would recycle the cash proceeds into higher margin assets.

LONDON, Oct 25 (Reuters) – BP Plc will seek to reassure investors on Tuesday that its turnaround following the Gulf of Mexico oil spill is on track.

The British oil company is expected to report a 9 percent fall in third quarter profits as the sale of oil fields to pay for the Macondo spill hits production and counters the positive effect of high oil prices.

Most rivals are predicted to post profit increases of over 30 percent, thanks to an almost 50 percent rise in Brent oil prices compared to the third quarter of 2010.

“BP is likely to have another difficult quarter,” said Bernstein oil analyst Oswald Clint in a note to clients.

BP is expected to report replacement cost (RC) net income, excluding one-offs, of $5.03 billion for the last quarter, a 9 percent fall compared to the same period last year, according to a Reuters poll of nine analysts.

Replacement cost profit strips out unrealised gains and losses related to changes in the value of fuel inventories, and, as such, is comparable with net income under U.S. accounting rules.

As well as suffering the impact of a shrunken production base, BP’s oil and gas output has been diminished by an overhaul of its facilities as the company seeks to improve safety.

LONDON, Oct 24 (Reuters) – Hungary’s Minister For National Development raised doubts about the viability of the Nabucco gas pipeline on Monday and said he might sue a French utility which he believed had not paid enough tax.

Tamás Fellegi, who has authority for energy matters, said Nabucco was in doubt because it had not yet secured a supply of gas or customers and because the cost of building it was soaring.

“I see plenty of problems surrounding Nabucco. Number One: it is fully in the fog what the ultimate price of Nabucco will be,” he told a briefing for reporters in London.

“We started out with around 7 billion euros for the full project, now the very optimistic scenario runs around 24-26 billion, almost four times higher than the original one,” he added.

A spokesman for the Nabucco consortium, which is led by Austria’s OMV and includes Germany’s RWE , Hungary’s MOL , Turkey’s Botas, BEH of Bulgaria and Romania’s Transgaz <ROTGN.BX, said the minister’s estimate was “random”.

However, he added the consortium’s own 7.9 billion euros estimate was under review.

Earlier this month, European Union energy commissioner Guenther Oettinger said the project could cost up to 14 billion euros.

LONDON (Reuters) – Investors in the world’s biggest oil companies are expected to look beyond the bumper profits the groups will announce next week on the back of higher oil prices, and seek clues on how the companies can maintain income growth as crude stabilizes.

The five biggest western oil producers by market value — Exxon Mobil Corp (XOM.N: Quote, Profile, Research, Stock Buzz), Royal Dutch Shell Plc (RDSa.L: Quote, Profile, Research, Stock Buzz), Chevron Corp (CVX.N: Quote, Profile, Research, Stock Buzz), BP Plc (BP.L: Quote, Profile, Research, Stock Buzz) and France’s Total SA (TOTF.PA: Quote, Profile, Research, Stock Buzz), known collectively as the supermajors — are expected to announce an average year-on-year rise in net income of around 31 percent, according to analysts forecasts compiled by Reuters.

However, the result would lag a 48 percent jump in Brent crude to $113/barrel in the quarter. Also, earnings are expected to be lower than in the second quarter, after global economic uncertainty prompted an easing of oil prices in recent months.

After six or seven quarters of strong profit growth driven by rising oil prices, investors are questioning whether companies can eke out earnings rises next year and beyond, in the absence of the tail wind of ever-soaring crude.

“The past few quarters have seen fairly mediocre earnings leverage (to the crude price rise),” analysts at UBS said in a research note. “We fully expect investors to want to dig deeper into why this is and whether it can reverse.”

Exxon’s third-quarter net income is expected to jump 40 percent on last year to $10.26 billion, according to I/B/E/S estimates, while Shell’s current cost of supply (CCS) net income, excluding one-offs, is predicted to rise 34 percent to $6.61 billion, according to a Reuters poll of nine analysts.

A relatively weak third quarter last year will help Chevron lead the pack with a 78 percent jump in net income to $6.71 billion, while BP’s sale of oil fields to pay for the Gulf of Mexico oil spill, together with increased maintenance to improve safety, will hit production and push replacement cost (RC) net income down 9 percent to $5.03 billion.

LONDON (Reuters) – In June, when a fire ripped through a concrete tower block in Bermondsey, a low-income neighborhood in south-east London, residents initially blamed it on a lightning strike. “It was only later we heard the truth on the television,” said Kathy Pullady, who lives across a chipped tile-covered landing from the 17th-floor flat where the blaze took hold.

The London Fire Brigade had in fact been investigating the probable cause of the fire for years. In July it publicly pointed to a faulty fridge-freezer made by Turkish company Arcelik, Europe’s third-largest appliance manufacturer. The fire brigade says timers in certain models of Arcelik fridges have caused at least 20 fires in the UK since 2006. One man has been killed and at least 15 people injured.

Since 2005, the European Commission has recorded fire safety warnings for 37 fridge-freezer models. Sixteen of those models were made by Arcelik under the Beko brand, 18 by Swedish-based Dometic (including some fridge-freezer-oven combinations used in mobile homes), and three by South Korea-based Samsung.

Fire chiefs told Reuters they took the unusual step of issuing a public statement about the Arcelik appliances because the company itself had failed to publicize the danger. Consumer groups also charge the company — along with British regulators — with dragging its feet when it came to warning customers.

Arcelik (pronounced Arch-e-lick) agrees design flaws in certain fridge-freezers are to blame for the fires. A company spokeswoman told Reuters in an email it believes “there have been 29 incidents which can be attributed to an issue with the defrost timer since 2006.” But the company says it acted as quickly as possible to tackle the issue. Regulators have declined to comment.

The issue highlights how an increasingly globalize supply chain can expose consumers to weaker safety regimes than they may be used to. The European Union’s database of unsafe products has seen a sharp rise in product warnings since 2003, and the vast majority is on products made in emerging markets. Against this backdrop, Britain’s fragmented regulatory regime can slow public notification of life-threatening defects. And companies whose products injure or even kill face much milder sanctions in Europe than in the United States.

“The regulatory and safety standards in the U.S. and the EU have developed over a long period of time,” said Luke Upchurch of lobby group Consumers International. “A lot of the products are coming from jurisdictions where there aren’t tight controls … It’s still very difficult to monitor that on an international basis.”

LONDON, Oct 21 (Reuters) – In June, when a fire ripped through a concrete tower block in Bermondsey, a low-income neighbourhood in south-east London, residents initially blamed it on a lightning strike. “It was only later we heard the truth on the television,” said Kathy Pullady, who lives across a chipped tile-covered landing from the 17th-floor flat where the blaze took hold.

The London Fire Brigade had in fact been investigating the probable cause of the fire for years. In July it publicly pointed to a faulty fridge-freezer made by Turkish company Arcelik, Europe’s third-largest appliance manufacturer. The fire brigade says timers in certain models of Arcelik fridges have caused at least 20 fires in the UK since 2006. One man has been killed and at least 15 people injured.

Since 2005, the European Commission has recorded fire safety warnings for 37 fridge-freezer models. Sixteen of those models were made by Arcelik under the Beko brand, 18 by Swedish-based Dometic (including some fridge-freezer-oven combinations used in mobile homes), and three by South Korea-based Samsung.

Fire chiefs told Reuters they took the unusual step of issuing a public statement about the Arcelik appliances because the company itself had failed to publicise the danger. Consumer groups also charge the company — along with British regulators – with dragging its feet when it came to warning customers.

Arcelik (pronounced Arch-e-lick) agrees design flaws in certain fridge-freezers are to blame for the fires. A company spokeswoman told Reuters in an email it believes “there have been 29 incidents which can be attributed to an issue with the defrost timer since 2006.” But the company says it acted as quickly as possible to tackle the issue. Regulators have declined to comment.

The issue highlights how an increasingly globalised supply chain can expose consumers to weaker safety regimes than they may be used to. The European Union’s database of unsafe products has seen a sharp rise in product warnings since 2003, and the vast majority is on products made in emerging markets. Against this backdrop, Britain’s fragmented regulatory regime can slow public notification of life-threatening defects. And companies whose products injure or even kill face much milder sanctions in Europe than in the United States.

“The regulatory and safety standards in the U.S. and the EU have developed over a long period of time,” said Luke Upchurch of lobby group Consumers International. “A lot of the products are coming from jurisdictions where there aren’t tight controls … It’s still very difficult to monitor that on an international basis.”