BP profit up 70% on back of oil resurgence

Bottom-line net profit jumped to $2.5b in the first quarter of 2018

British energy major BP yesterday said that firstquarter net profits soared 70 per cent on the back of rising crude oil prices, increasing output and improving reliability across its operations.

Earnings after taxation, or bottom-line net profit, jumped to $2.5 billion (Dh9.2 billion) in the three months to the end of March from a year earlier, BP said in a results statement.

Total production advanced 6 per cent to 3.7 million barrels of oil equivalent per day (boepd). BP also paid another $1.6 billion for costs arising from the 2010 Gulf of Mexico oil spill catastrophe, including $1.2 billion for the final payment relating to the 2012 Department of Justice settlement.

“We have delivered another strong set of results,” said chief executive Bob Dudley. “Our safe and reliable operations and strong financial delivery have continued into 2018.”

Underlying replacement cost profit — which excludes fluctuations in the value of crude oil inventories — surged 71 per cent to $2.6 billion. Chief financial officer Brian Gilvary added that the performance was energised only partly by the oil price recovery.

“It’s come through in terms of the reliability that we are seeing in both upstream and downstream and a little bit of benefit from the oil price,” he said. “But overall, a strong set of results in terms of earnings.”

Downstream comprises refining, marketing and distribution, while upstream covers exploration and production.

“The results definitely benefit from a higher oil price that we’ve seen come through,” Gilvary noted. “But actually, it’s more about the seven projects that we brought on stream last year, the six more projects that we will be bringing on stream in the upstream this year... and continued underlying performance improvements in the downstream.”