Bula hit by £1.2m loss in million) in 1998 compared with a loss of £12.9 million in 1997. There was an exceptional provision against Mir Space in 1997 but even if this is excluded, there was an adverse underlying trend in 1998 which is reflected in the rise in the gross loss from £361,000 to £444,000.

Bula noted that the past year was very difficult for the oil and gas industry with average prices down significantly. "As well as an adverse impact on revenues and cash flows, this low price environment has contributed to the exceptional impairment provisions against the carrying value of oil and gas interests in the balance sheet."

Its working capital position has improved following a placing of new shares. The recent recovery in oil and gas prices, together with the restored production from the Main Pass 41 facility, "will ensure that the current year should see an improved performance from our North American producing operations", according to Bula. It said it had agreed with the Iraqi State Oil Marketing Organisation to purchase a further two million barrels of crude oil. The agreement has been approved by the United Nations Committee under the "oil for food" programme.