Energy giant BP’s profits surge on higher oil prices

BP more than doubled profits in the third quarter after riding the wave of higher oil prices.

The energy giant said underlying replacement cost profit – the market’s preferred measure – rose to $3.8bn (£2.9bn) over the three-month period, up from $1.86bn (£1.4bn) in the same quarter last year.

It added that oil and gas production during the third quarter averaged 3.6 million barrels of oil per day.

Revenue during the quarter rose to $80.8bn (£63bn), up substantially from $60.8bn (£47.5bn) in the same period last year.

Chief executive Bob Dudley said: “Our focus on safe and reliable operations and delivering our strategy is driving strong earnings and growing cash flow.

“Operations are running well across BP and we’re bringing new, higher-margin barrels into production faster through efficient project execution.”

The group, along with other oil firms, has been riding high on the back of rising oil prices this year.

Since January, the price of Brent crude has risen from $66 a barrel to $76 today.

BP also said its deal to acquire the US shale oil and gas assets from BHP Billiton for $10.5bn (£8bn) will complete this week.

“We have made very good progress with our acquisition from BHP and expect to complete the transaction tomorrow,” said Mr Dudley.

“This will transform our position in the US Lower 48 and we expect it to create significant value for BP.

“This progress all underpins our commitment to growing distributions for our shareholders.”

BP is still counting the cost of the Deepwater Horizon disaster in April 2010, which is widely regarded as one of the biggest disasters in corporate history – killing 11 people and leading to a record US environmental fine of $18.7bn (£14.2bn).

While the lion’s share of the mammoth costs are behind the firm, BP said Gulf of Mexico oil spill payments came in at $500m in the third quarter.

It said full-year payments linked to the disaster would be around $3bn (£2.34bn).