BP trebles its profits as oil price recovers

BP profits have nearly tripled after massive cost cutting and a boost from the oil price.

The oil giant made £1.1bn over the first quarter of 2017 compared to £384m in the previous quarter.

It swung back from a £451m loss in the first quarter of 2016, lifted by record production, higher oil prices and having trimmed down the business.

Chief executive Bob Dudley, who took a 40pc pay cut this year after a shareholder revolt, said he expected even stronger results in the second half of the year due to new exploration and development projects.

The dividend will remain unchanged at 10 US cents per share, to be paid on June 23.

London-based BP joined other oil majors in posting strong results on the back of oil prices that have risen around 50pc over the past year to $54 a barrel. It follows an agreement in November by the Opec cartel to cut production. BP said at the start of February it needed oil prices to reach around $60 to break even, but at the end of February downgraded that figure to around $55. It now says it could break even at around $35-$40 per barrel by 2021.

But analysts at Hargreaves Lansdowne warned new projects needed investment. Equity analyst Nicholas Hyett added: ‘BP started cutting costs and disposing of assets well before the oil price took a dive.

‘The group has done an impressive job here, and while starting the process early may not have been voluntary, trimming fat and reducing spending means that it is now in a healthier position than many rivals,’ he said.

Dudley said: ‘Our year has started well. BP is focused on the disciplined delivery of our plans. First quarter earnings and cash flow were robust.’