BP sees profits gush on oil price

BP’s profits more than doubled in 2017 to $6.2bn (€4.98bn) powered by higher prices and output of oil and gas, allowing the company to resume share buybacks as it recovers from a three-year downturn.

BP sees profits gush on oil price

BP’s profits more than doubled in 2017 to $6.2bn (€4.98bn) powered by higher prices and output of oil and gas, allowing the company to resume share buybacks as it recovers from a three-year downturn.

The company saw one of the strongest output increases in its history last year, lifting production to levels not seen since the 2010 Deepwater Horizon spill.

Production is set to continue growing into the end of the decade thanks to more field start-ups this year. BP would generate profits in 2018 at an oil price of $50 a barrel, chief financial officer Brian Gilvary said, as years of spending cuts kicked in and as it slowly shakes off a $65bn bill for penalties and clean-up costs of the 2010 spill.

BP was the first among its European peers to resume share buybacks in the fourth quarter of 2017 after years dilutive austerity measures in the face of the industry slump. With a 20% bounce in oil prices in the last quarter of 2017 to $61 a barrel, BP had a surplus of cash that allowed it to buy $343m worth of shares in the fourth quarter, offsetting the scrip dilution.

BP shares were trading slightly lower, outperforming sharp declines for the oil sector in London trade. The shares are up almost 8% in the past year.

“2017 was one of the strongest years in BP’s recent history,” chief executive Bob Dudley said. “We enter the second year of our five-year plan with real momentum, increasingly confident that we can continue to deliver growth,” he said.

Full-year production rose 12 percent to 2.47 million barrels per day after BP launched seven new oil and gas fields in 2017, a record year.

It is set to start up six additional projects this year including in Egypt, Azerbaijan and in the North Sea, helping boost production by 900,000 barrels of oil equivalent per day by 2021, most of it gas. It previously said it would launch five new projects this year.

BP was added about one billion of barrels of oil equivalent to its reserves in 2017, the largest since 2004, thanks to six discoveries, including in Senegal and the North Sea. Its reserve replacement ratio was estimated at 143 percent for the year.

BP’s refining and trading business, known as downstream, saw profits rise to $7bn in 2017 as earnings for the marketing division rose by more than 10%.

Cash flow in the fourth quarter rose to $6.2bn but fell short of market expectations, raising concerns that cost cuts have run their course, echoing concerns about rivals Royal Dutch Shell, Exxon Mobil, and Chevron which reported last week.

Reuters

more courts articles

Man (25) in court charged with murdering his father and attempted murder of mother Man (25) in court charged with murdering his father and attempted murder of mother
Man appears in court charged with false imprisonment of woman in van Man appears in court charged with false imprisonment of woman in van
Man in court over alleged false imprisonment of woman Man in court over alleged false imprisonment of woman

More in this section

FILE PHOTO The Competition and Consumer Protection Commission has cleared the purchase of Goodbody Stockbrokers by AIB END Goodbody Stockbrokers fined over €1.2m by Central Bank over rules breaches
Nottingham City Centre Stock Irish staff at the Body Shop wait for wages as retailer shuts stores in the Republic
Ryanair comments on Norwegian Ryanair boss O'Leary's spat with Transport Minister over Dublin Airport escalates
IE logo
Devices


UNLIMITED ACCESS TO THE IRISH EXAMINER FOR TEAMS AND ORGANISATIONS
FIND OUT MORE

The Business Hub
Newsletter

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
ie logo
Puzzles Logo

Play digital puzzles like crosswords, sudoku and a variety of word games including the popular Word Wheel

Lunchtime News
Newsletter

Keep up with the stories of the day with our lunchtime news wrap.

Sign up
Cookie Policy Privacy Policy Brand Safety FAQ Help Contact Us Terms and Conditions

© Examiner Echo Group Limited