OIL giant BP revealed a dip in profits as its commitment to sell off billions of pounds of assets in the wake of the Gulf of Mexico disaster hit production.

The group reported underlying replacement cost profits of £2.95bn in the first quarter, compared with £3.06bn in the previous three months and expectations of £3.07bn.

The group reported a 6% decline in oil and gas production to 2.45m barrels of oil a day as its programme of asset disposals since 2010 hit £14.2bn.

BP sold businesses in the US, Canada and the North Sea in the period.

BP said the total charge taken to cover the impact of the fatal Deepwater Horizon explosion in April, 2010, remained at £22.9bn in the period.

Shares in BP fell nearly 3% after today’s update.

BP said it is making good progress towards the “operational milestones” that it expects to meet this year, including moves towards its pledge to sell 38bn US dollars of assets.

BP completed the sale of gas assets in Kansas, Canadian natural gas liquids business and its Southern North Sea gas assets in the period.

The group is now looking to sell “non-strategic” assets in the Gulf of Mexico, including the Marlin, Horn Mountain, Holstein, Ram Powell and Diana Hoover fields.

BP entered into concessions with oil firm Petrobras in Brazil in the period, as well as deepening its interests in offshore Namibia and being awarded three new blocks offshore Uruguay.

BP said it remains on track to start up six new major upstream projects in 2012, with Clochas-Mavacola in Angola and Galapagos in the Gulf of Mexico set to start in the second quarter.

BP’s fuels, lubricants and petrochemicals businesses delivered higher underlying replacement cost profits than in the previous quarter.

During the period, BP made payments of £924m to the £12.3bn trust set up to cover the costs of claims for the Gulf of Mexico oil disaster. Its payments into the trust total £10.2bn and it expects its payments to end in the fourth quarter of this year, a year earlier than expected.

BP also covered a total of £5.1bn in individual, business and government claims, advances and other payments at the end of the quarter.