BP said yesterday that first quarter net profit sank 18 per cent on a large accounting provision and lower output, which was hit by asset sales to meet clean-up costs for the Gulf of Mexico disaster.

Earnings after tax fell to $5.92 billion (€4.46 billion) in the three months to March from $7.25 billion in the 2011 period, the British energy giant said in a results statement.

Adjusted earnings, which strip out movements in the value of inventories and other non-operating items, slid 12.8 per cent to $4.8 billion. That fell short of analyst forecasts for $5.10 billion, according to Dow Jones Newswires. Total production meanwhile declined three per cent to 3.47 million barrels of oil equivalent per day.

That compared with 3.58 million in first quarter 2011 and undershot expectations of a drop to 3.46 million. Revenues rose nine per cent to $96.70 billion on high oil prices.

BP has now sold $23 billion of assets as part of its ongoing $38 billion divestment programme as it seeks to meet the bill for the Gulf of Mexico disaster.

During the first quarter, BP sold businesses in Canada, the United States and the North Sea.

The company’s fortunes were ravaged two years ago by an explosion on the BP-leased Deepwater Horizon rig that killed 11 workers, sent millions of barrels of oil spewing into the sea and left it with huge compensation costs.

The blast on April 20, 2010, sparked what was been widely acknowledged to be the worst environmental catastrophe in US history.

However, the troubled energy major returned to profit last year with net earnings of $23.9 billion.

BP said yesterday that the total charge taken to cover the Deepwater Horizon explosion remained at $37.2 billion at the end of the first quarter.

Major rival Shell said last week that its adjusted net profits climbed 16 per cent to $7.28 billion in the first quarter, boosted by strong oil prices and rising output.