BP Plc failed to reassure investors with a more than doubling of first-quarter net profits on Tuesday, as the oil major's shares fell on growing fears about the impact of a worsening oil spill in the Gulf of Mexico.

BP said replacement cost net profit, which strips out unrealized gains related to rises in the value of inventories, was $5.60 billion in the quarter, up from $2.39 billion in the same period of 2009, thanks to higher oil and gas prices.

The underlying results were well ahead of forecasts but were overshadowed by concerns about an oil well in the Gulf of Mexico which is leaking 1,000 barrels per day of crude after the rig drilling it exploded and sank with the loss of 11 workers, who are now presumed dead.

BP's shares fell 1.3 percent to 618.5 pence, underperforming the STOXX Europe 600 Oil and Gas index <.SXEP> which was 0.9 percent down at 0836 GMT.

The situation in the Gulf of Mexico is now looking more pessimistic and it looks increasingly likely that it will take months rather than days to remedy. Ultimately, the costs associated with this accident will be proportional to the time taken, said Dougie Youngson, oil analyst at Arbuthnot.

The spill grew to cover 1,900 square miles on Monday as the U.S. Coast Guard scrambled to keep the slick from reaching the fragile Gulf Coast shoreline.

BP is responsible for the costs of the cleanup operation and could also face lawsuits.

The rise in profits was due to a recovery of crude and gas prices from the recession-hit levels of 2009. Brent crude rose 72 percent to average over $76 a barrel over the first three months of the year.

BP managed to outperform expectations partly because it also managed to achieve much higher prices for its gas, despite a drop in European benchmark gas prices compared to the first three months of 2009.

One dealer said the better-than-expected results augured well for other oil majors such as Royal Dutch Shell Plc , which reports its results on Wednesday.

Shell's London-listed A shares traded up 0.8 percent at 2,005 pence. French oil major Total's shares were up 0.2 percent at 42.73 euros.

PRODUCTION FLAT

Higher throughput at its refining unit also allowed the company to outperform expectations, although a halving of margins compared to the first quarter of 2009 meant the overall result was sharply lower.

The world's third-largest Western oil major by market value said oil and gas production was broadly flat compared to the same period of 2009, at 4.01 million barrels of oil equivalent per day -- just ahead of forecasts.

BP said it had agreed to buy a 15.7 percent interest in Valhall and a 25 percent interest in Hod, both located in the southern part of the Norwegian continental shelf, from France's Total for $991 million in cash.

It was the latest in a string of acquisitions by the oil major in recent months, after it agreed to pay Devon Energy $7.0 billion for assets in Brazil, Azerbaijan and the Gulf of Mexico.

The London-based company also said it would pay $900 million for a 75 percent stake in the oil sands assets of unlisted Canadian company Value Creation.

The tie-up was announced last month but no details on price or stake size were revealed then.

Excluding one-off items, which amounted to a net charge of $49 million, BP's replacement cost result was $5.65 billion, ahead of an average forecast of $4.78 billion from a Reuters poll of nine analysts.

(Editing by Rupert Winchester)

Oil Spill