Oil giant BP is back in the black after reporting profits of $1.5 billion (£1.1bn) in the first quarter of this year, compared with a $485 million loss last year.
Oil prices have been about 35% higher in the first three months of 2017 compared with 1Q2016, boosting revenue from BP’s core oil and gas production division.
Brian Gilvary, BP finance director, explained: “The <oil> price is always going to be a factor, but we are performing well.
“So what you are seeing in the stronger underlying earnings we’re reporting is a combination of the environment firming up – reflected in an average oil price around $4 higher this quarter than the previous one – but also the operational momentum that’s building in our businesses.
“We have got our cash costs down by $7 billion a year compared with 2014 – and we did that a year earlier than planned. We’re being very disciplined with our capital expenditure while continuing to invest for growth where we can generate good value and good margins.
“And we’re focused very firmly on executing our new projects efficiently so that we get them online on time and on budget and ramping up as planned.
- First quarter operating cash flow, excluding payments related to the Gulf of Mexico oil spill, of $4.4 billion. Including these payments, operating cash flow was $2.1 billion.
- Dividend unchanged at 10 cents per share.
- Reported oil and gas production was 3.5mmboe/d in the first quarter, 5% higher than same period in 2016.
- New Upstream major projects on track: Trinidad onshore compression project started up, another in ramp-up, and two more in commissioning, including the Quad 204 field, west of Shetland (pictured, above)
- Downstream marketing growth and strong operational performance.
- $1.7 billion divestment of BP’s interest in SECCO petrochemical joint venture, subject to regulatory approvals.
Bob Dudley, Chief Executive,added: “We are focused on the disciplined delivery of our plans and our <financial> year has started well.
“First quarter earnings and cash flow were robust. We have shown continued operational momentum – it was another strong quarter for the Downstream and the first of our seven new Upstream major projects has started up, with a further three near completion. We expect these to drive a material improvement in operating cash flow from the second half.”
Shell is also expected to post a leap in profits when it reports later this week.