BP Plc reported a 2 percent drop in first-quarter profits, falling short of analysts' forecasts, as the lingering effects of the oil spill frustrated Chief Executive Bob Dudley's attempts to turn around the oil giant.

Lower production and higher charges due to the oil spill outweighed the benefits of a 38 percent jump in the price of oil and a tripling of refining margins -- factors expected to generate bumper earnings across the oil sector.

BP said its replacement cost net profit was $5.5 billion in the quarter, the company said in a statement on Wednesday.

Excluding one-offs, such as asset sales, BP's underlying results were $5.37 billion, short of an average forecast of $5.70 billion from a Reuters poll of nine analysts.

BP said production fell 11 percent compared to the same period last year after it sold fields to pay for America's worst ever oil spill.

The London-based company said it was pursuing a range of options to try and solve its ongoing dispute with its Russian partners in TNK-BP over a planned tie-up with Rosneft.

(Editing by Louise Heavens)

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