BP has highlighted the progress it has been making in the North Sea after suffering a sharp fall in third- quarter profits when problems in Russia weighed on the business.
The oil and gas giant made $3bn (£1.9bn) net of one-offs in the three months to September, down around 20 per cent, $700m, from the $3.7bn it made in the same period last year.
The fall in profits partly reflected a drop in oil prices during the quarter amid abundant global supplies and weaker demand.
However, the biggest drag on group profits was BP's 19.75 per cent investment in Rosneft, the Russian oil major.
BP revealed that underlying net income from Rosneft for the quarter fell to $110 million from $808 million a year earlier, mainly due to adverse foreign exchange movements.
The rouble has lost more than a fifth of its value this year amid the fall-out from the conflict in the Ukraine.
The United States and the European Union hit Russia with economic sanctions over Moscow's intervention in Ukraine, leaving the Kremlin to fight capital outflows and lower oil prices.
Ian Reid, analyst at invesment bank BMO, said: "The company still faces two significant headwinds - in Russia and liabilities over the 2010 Gulf of Mexico oil spill."
A US judge last month found BP had been "grossly negligent" and "reckless" in the the 2010 Gulf of Mexico rig explosion and spill.
BP said it would appeal the ruling, which could add nearly $18bn in fines to its bill for the disaster. The company has recognised $43bn costs to date, including $43m in the third quarter.
Problems overseas could increase the appeal of the North Sea, which may involve fewer risks.
BP expects to increase production in the North Sea in 2015 following years of decline, helped by hefty investment in high-margin fields such as Clair Ridge west of Shetland.
The company increased production in Europe to 119,000 barrels oil equivalent per day in the third quarter, from 100,000 boed in the same period last year, reflecting lower maintenance downtime.
Around two thirds of European production comes from the UK, with a third from Norway.
In the results announcement, BP noted that it is making progress towards the start-up of what it called the major Kinnoull field in the UK Central North Sea.
This is expected onstream shortly.
The company has hailed the project as an example of how it can apply advances in technology to improve the economics of fields in the UK.
BP also noted that the Vorlich find it made in the Central North Sea with GDF SUEZ was one of three significant exploration successes in the third quarter. The company applied for more exploration acreage in the latest UK licensing round.However, operations in the UK have not been immune from political complications.
BP restarted production from the giant Rhum gas field off northern Scotland after the quarter end. This followed an outage dating from November 2010 caused by sanctions against Iran, which has a 50 per cent stake in the field. BP said operations at Rhum recommenced in mid-October in accordance with a temporary management scheme announced by the UK Government last October.
The company's chief executive, Bob Dudley, caused controversy in the run up to the referendum on Scottish independence in September by saying BP believed the prospects for the North Sea were best served by maintaining the existing capacity and integrity of the UK.
The upstream exploration and production arm made $3.9bn profit net of one-offs in the third quarter compared with $4.4bn in the samed period of 2013.
Group production fell to 2,147,000 boed, from 2,207,000 boed in the third quarter of 2013, mainly due to the expiry of an exploration concession in Abu Dhabi. BP got an average $91.42 per barrel of oil, down from $100.66 last time.
Profits from BP's refining and retail business jumped to $1.5bn from $720m due to stronger refining margins
The cash generated from operations increased to $9.4bn, from $6.3bn in the third quarter of 2013.
Signalling confidence, BP announced a quarterly dividend of 10 cents per ordinary share, up 5.3 per cent year on year. BP shares closed up 6.75p at 437p.
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