OIL company BP last night warned that hurricanes Katrina and Rita may knock more than £400m off profits in the third quarter of the year.

The company, which announced first-half profits of £6bn in July - or £1.4m an hour - said trading conditions for the three months to the end of September were significantly affected by the hurricanes and their aftermath.

While production is expected to be lower than the previous quarter, BP said the average Brent crude oil price achieved during the past three months was up by $10 a barrel to $61.63.

BP warned it was now unlikely to meet this year's production goal of between 4.1 million and 4.2 million barrels of oil equivalent per day because of the hurricanes.

Stripping out the impact of the weather, BP said its production efforts had been in line with expectations.

The company lost oil and gas production from the Gulf of Mexico and there were further costs due to damage, clean-up and repairs.

As hurricanes Katrina and Rita swept through the Gulf of Mexico, oil rigs were damaged, refineries flooded and production shut down.

l Insurance group Zurich Financial Services estimated claims following Hurricane Katrina would cost it in the region of £342m. The Swiss firm said the provisional figure was less than the £450m to £500m claimed after the September 11 attacks in New York.