ENERGY company BP yesterday reported a fall in third-quarter production after operations in the Gulf of Mexico were affected by Hurricane Ivan.

Overall BP production for the three months to September 30 is forecast to be 3.88 million barrels of oil and gas a day, a fall of two per cent on the previous three months, but still up by 11 per cent on a year earlier.

As well as the disruption caused by last month's hurricane, BP said planned maintenance in the North Sea and Alaska and a blow-out at Tesmah, in Egypt, put pressure on its higher-margin operations.

Despite the quarterly fall, BP said average production for the year was still expected to be ten per cent higher than last year.

Analysts are forecasting profits of £9bn this year - the highest figure recorded by a UK company - as BP benefits from high oil prices.

In yesterday's update, BP said its exploration and production division saw the average cost of a barrel of Brent crude rise to $41.54 in the third quarter, up from $35.32 in the previous quarter.

In the customer-facing business, BP said margins suffered because increases in selling prices had failed to keep up with rising input costs.