But against expectations in a market still struggling from the plunge in crude oil prices, BP reported an underlying replacement cost profit for the quarter of $532 million, compared with $196 million for the previous quarter
Compared with the previous quarter, lower costs throughout the Group more than offset the impact of significantly weaker oil and gas prices and refining margins.
Bob Dudley, BP group chief executive, said: “Despite the challenging environment, we are driving towards our near-term goal of rebalancing BP’s cash flows.
“Operational performance is strong and our work to reset costs has considerable momentum and is delivering results. Furthermore, development of our next wave of material upstream projects is well on track.”
The Brent oil marker price averaged $34 a barrel in the quarter, compared with $44 in 4Q 2015 and $54 in 1Q 2015, and refining margins were at the lowest quarterly average for over five years. Brent prices have so far averaged $40 in the second quarter.
Dudley added: “Market fundamentals continue to suggest that the combination of robust demand and weak supply growth will move global oil markets closer into balance by the end of the year.”
Operational performance continued to be strong with reliability of Upstream operated assets and refining availability both at 95%.
BP now expects total organic capital expenditure in 2016 to be around $17 billion and, in the event of continued low oil prices, sees flexibility to move to $15-17 billion in 2017.
Costs are also reducing; BP’s cash costs over the last four quarters were $4.6 billion lower than in 2014 and the company expects cash costs for 2017 to be $7 billion lower than for 2014.
Brian Gilvary, Chief Financial Officer, said: “As we steadily take out more costs, the point at which we expect to be able to rebalance 2017 organic sources and uses of cash continues to move lower; we currently anticipate being able to achieve this at oil prices in the range $50-55-barrel.”
The company also paid a further $0.9 billion charge related to the 2010 Deepwater Horizon oil spill in the quarter, bringing the total pre-tax cumulative cost of the disaster to $56.4 billion.