Net profit came to $US5.66 billion ($A7.43 billion) for the three months ending June 30, up from $US4.38 billion ($A5.75 billion) in the second quarter of 2004.

Revenue jumped to $US88 billion ($A115.59 billion) from $US71.1 billion ($A93.39 billion).

BP also raised its capital expenditure guidance for 2006 partly due to higher costs. It warned its retail margins have been hurt so far in the third quarter by higher refined product prices.

The company had one-time items of $US826 million ($A1.08 billion), including the $US700 million ($A919.48 million) figure for settling claims arising from the Texas City, Texas, refinery explosion on March 23 that killed 15 workers.

BP said the $US700 million ($A919.48 million) figure included $US127 million ($A166.82 million) for the settlement of claims related to the deaths and serious injuries and a provision of $US573 million ($A752.66 million) for estimated future costs.

BP said its replacement cost profit for the quarter, was $US5.81 billion ($A7.63 billion), up from $US4.07 billion ($A5.35 billion) for the same period last year.

The company's exploration and production division was the main beneficiary of the rising oil price as profits for the quarter rose 38 per cent on a year earlier to $US5.9 billion ($A7.75 billion).

BP is the first major oil company to report its second-quarter results.

Royal Dutch Shell and Exxon Mobil are also expected to post strong earnings tomorrow.