BP’s Q3 earnings double on high oil prices

BP’s Q3 earnings double on high oil prices

/ Financial News / Wednesday, 31 October 2018 11:42

British energy major BP announced that its third-quarter net profit doubled on sharply higher crude oil prices.

Bottom-line profit after tax surged to $3.35 billion (2.9 billion euros) in the three months to September, compared with $1.77 billion a year earlier, BP said in an earnings statement. Underlying replacement-cost profit, which excludes fluctuations in the value of crude oil inventories, also doubled to $3.8 billion.

“We've captured the higher (oil) prices,” said chief financial officer Brian Gilvary in a webcast released alongside the results. “What we are seeing is momentum with the delivery of strategy,” he added, noting the performance was boosted also by the ramp-up of key projects.

Brent oil prices soared in September to a four-year peak above $82 per barrel partly on Iran supply fears. That contrasted with about $50 in the summer of last year. It is noteworthy that revenues jumped almost a third to $79.5 billion.

Oil and gas production excluding Rosneft was flat at 2.46 million barrels of oil per day in the reporting period.

“Our focus on safe and reliable operations and delivering our strategy is driving strong earnings and growing cash flow,” added chief executive Bob Dudley.

BP will meanwhile fund the $10.5-billion purchase of mining giant BHP Billiton's US shale oil and gas operations entirely from cash, owing to the high oil prices.

“While oil prices remain at these levels, we expect to finance the transaction fully using cash,” Gilvary said. “In this event, the $5-6 billion divestment program linked to the transaction will be used to reduce debt.”

The landmark deal opens a new chapter for BP in the United States following the devastating 2010 Gulf of Mexico disaster.

BP was ravaged by the oil spill catastrophe eight years ago caused by an explosion at the Deepwater Horizon drilling rig that the company leased. The blast killed 11 men off the coast of Louisiana and caused 134 million gallons (507 million liters) of oil to spew into Gulf waters in the worst environmental catastrophe in US history.

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