BP reported a 17 percent increase in first-quarter profit on April 27. (STEFAN WERMUTH/REUTERS)

Bolstered by soaring crude oil prices, BP reported a 17 percent increase in first quarter profit to $7.1 billion and sought to convince investors that it was coping with the costs of the massive oil spill in the Gulf of Mexico last year.

The company’s earnings did show signs of spill damage. The sale of assets last year to fund the costs of spill cleanup and reparations helped shrink the oil giant’s production of oil and natural gas by 11 percent compared with the first quarter of 2010. BP also set aside $400 million to cover spill costs, on top of the $40.9 billion it had already reserved for those costs.

Not counting a surge in the value of the company’s inventory, BP’s profit fell 2 percent when compared with the first quarter of 2010.

But the company — whose stock plunged in the wake of the April 20, 2010, blowout on BP’s Macondo well — also showed signs that it is managing the impact of the spill and will survive with many lucrative assets intact.

Though smaller, the London-based firm still produces the equivalent of 3.58 million barrels of oil a day. It received an average of $93.93 per barrel, up from $71.86 in the first quarter of 2010. Even after $2.8 billion in cash went to spill-related expenses in the first quarter, including an installment for the escrow fund, BP still had $2.4 billion in free cash flow and an ambitious exploration budget.

The company maintained a 7-cent-a-share quarterly dividend it introduced three months earlier; it had suspended its dividend during the gulf spill.

Although reassuring to investors (the stock closed up 21 cents at $46.53 a share), BP earnings drew fire from members of Congress who have blamed the company for the blowout. Some of them joined President Obama in calling for an end to tax incentives that the oil industry has enjoyed for years.

“When BP makes billions in profits, even after the year they just had, you know it’s time to cap the gusher of tax breaks that have been subsidizing the biggest oil companies for decades,” said Rep. Edward J. Markey (D-Mass.), a senior member of the House Energy and Commerce Committee.

BP’s earnings of $7.1 billion were up from $6.1 billion in the first quarter of 2010. Excluding inventory gains, however, quarterly profit fell to $5.5 billion from $5.6 billion a year earlier.

BP’s chief executive, Robert Dudley, is seeking to revive the company’s growth, inking a deal to acquire prospects in India and agreeing to a share swap and exploration plan with OAO Rosneft in Russia’s Arctic. But the Rosneft deal has been mired in a dispute between BP and its Russian partners in a separate joint venture, TNK-BP. Those partners won an injunction blocking the BP deal with Rosneft and are seeking a share of the new venture. TNK-BP accounts for a quarter of BP’s worldwide oil output.

BP’s chief financial officer, Byron Grote, told analysts Wednesday that BP hopes to resume drilling in the Gulf of Mexico by the end of the year and has applied for permits.

The first quarter could turn out to be one of the oil industry’s most profitable ever.

Conoco Phillips on Wednesday reported a first-quarter profit of $3 billion, up 44 percent from $2.1 billion a year earlier. Excluding asset sales, the company’s net income was $2.6 billion. But that fell short of investors’ expectations; Conoco’s production sagged and its refineries had unexpected down time. The company’s stock fell $1.38 to $79.83 a share.