In contrast to record profits at Shell and Exxon, Profits at BP, the UK’s largest company, fell 22 per cent to $17.29 billion last year. The oil giant confirmed it would cut 5,000 jobs and target a 20 per cent reduction in overheads by the middle of next year in a drive to improve profitability.

Chief Executive Tony Hayward said the company’s performance had been “very poor”, particularly in refining and marketing. He blamed the lack of reliability of some of BP’s US refineries, which had resulted in production outages and higher costs.

Mr Hayward’s restructuring includes the loss of 5,000 jobs and the transfer of a further 9,500 from its US petrol stations to other employers. The move to petrol station franchising cost BP $603 million in the fourth quarter and it took a further $338 million charge to cover the job losses.

One interesting snippet though – BP’s reserve replacement seems to have been better than that of its competitors. Exxon and Shell have given no guidance on reserve replacement for 2007, which they will set out over the next few weeks. Chevron said it expected to have replaced just 10-15 per cent of its production. BP, in contrast said it had added to its reserves more than 100 per cent of the oil and gas it produced last year.