The Courier & Advertiser (Perth and Perthshire Edition)
Seven-year high for BP shares as oil sector starts to improve
INDUSTRY: Profits more than double as production rises
BP has more than doubled profits in the third quarter after securing a 14% jump in oil and gas production.
The oil major said underlying replacement cost (RC) profit – the market’s preferred measure – rose to £1.44 billion over the three-month period, up from £603 million for the same quarter last year.
On a nine-month basis, underlying RC profits also climbed to £3.1bn in contrast to £1.7bn for the same period in 2016.
Shares in the firm hit a seven-year high during morning trading on the London Stock Exchange, as earnings beat expectations.
It added that oil and gas production during the third quarter rose to an average of 3.6 million barrels of oil per day after it launched a number of new projects.
BP, which has been reshaping its business in order to cope with long-term low oil prices, also announced a share buyback scheme for the fourth quarter.
The update comes amid a brighter outlook for global oil giants after the price of Brent crude lifted above $60 a barrel for the first time in two years last week.
Group chief executive Bob Dudley said: “This quarter, three new upstream projects and the highest downstream earnings in five years, underpinned by reliable operations and disciplined spending, have generated healthy earnings and cash flow.”
BP is currently hunting for a new chairman after it announced last month that Carl-Henric Svanberg would step down next year.
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “BP has spent the past seven years addressing big problems, with first the Gulf of Mexico disaster and then the oil price crash throwing the group into disarray.
“Those headwinds are finally fading into the history books.
“New oil fields are starting to come online, supporting cash generation from the group’s upstream business.
“Meanwhile, the downstream business, which has been BP’s rock throughout much of the oil downturn, continues to deliver excellent results.”