BP crept back into profit in the first six months of this year, reporting a profit of $144 million compared to a whopping loss of 10 times that amount ($1.4 billion) in 2016.
Bob Dudley, group chief executive, commented: “These results demonstrate BP’s resilience in what continues to be a challenging external environment; the oil price dipped in the last quarter, although it has risen slightly again in the past few weeks.
“Despite those lower prices, we are generating cash across the business and we’re now balancing our sources and uses of cash at under $50-barrel, when you set aside our Macondo (Deepwater Horizon) obligations.
“Oil prices continue to remain lower for longer; they were down slightly in this past quarter. What that means for us as a business is we have to plan on the oil price not rising back up very high.
“Our break-even levels need to sit below $50-barrel and, in about five years’ time, under $40- barrel. We’re very focused on making this happen so the business is resilient to all conditions – and a range of prices.
We can’t assume that oil prices will go back up, but our earnings are above expectations and we’re on the right track and firing on all cylinders. These results point to a business that is running well – and it certainly feels like it.
“There are obviously many moving parts which makes it difficult to predict what will happen to prices, but what we do expect is that oil demand will remain robust for the rest of 2017 and into next year.
“Our forecasts point to an above-average increase of 1.5 million barrels a day in demand this year, driven by recovery in GDP growth and sustained lower prices.
“We continue to position BP for the new oil price environment, with a continued tight focus on costs, efficiency and discipline in capital spending.”
No new North Sea projects have been approved by BP in the past six months.
But the Quad 204 floating production facility west of Shetland came on-stream in May this year, while the Clair Ridge field is scheduled to start-up in 2018 and the Culzean gas field is due on-stream in 2019.
BP Financial highlights for 2Q2017
- Underlying replacement cost (RC) profit* for the second quarter was $0.7 billion.
- Second-quarter operating cash flow, excluding Gulf of Mexico oil spill payments*, was $6.9 billion. Including these payments, operating cash flow* for the quarter was $4.9 billion.
- Dividend unchanged at 10 $-cents per share.
- Second-quarter Upstream production was 10% higher than in the same period in 2016; first-half production was 6% higher.
- Upstream major projects on track; two new projects sanctioned in quarter; significant gas discoveries in Senegal and Trinidad announced; $753 million exploration write-off, predominantly in Angola.
- In Downstream, first-half fuels marketing earnings around 20% higher than in the first half of 2016.