BP says annual profit rockets on higher oil prices
By Roland JACKSON
British energy major BP said Tuesday that 2017 net profits rocketed to almost $3.4 billion (2.7 billion euros), boosted mostly by a recovery in the crude oil market.
Earnings after taxation for the full year compared with $115 million in 2016, BP said in a statement.
“The results primarily reflected higher oil prices,” the London-listed giant said.
The news comes one week after Anglo-Dutch rival Royal Dutch Shell announced an annual profit of $13 billion, also energised by rising oil and gas prices.
World oil prices had leapt by some 15 percent to finish the year at $60 per barrel, helped by oil cartel OPEC’s efforts to limit its production.
BP’s underlying replacement-cost profit — which excludes fluctuations in the value of crude oil inventories — more than doubled to $6.2 billion last year.
The company’s upstream business, comprising exploration and production, saw output leap 12 percent to 2.47 million barrels of oil equivalent per day — the highest level since the year of the Gulf of Mexico oil spill disaster.
The performance was also lifted by solid earnings at its downstream division that comprises refining, marketing and distribution.
BP said it was hit by an additional $3.18 billion of Gulf-related costs in 2017. That brought total costs linked to the disaster — including fines and compensation to businesses — to $65.8 billion.
“2017 was one of the strongest years in BP’s recent history,” said chief executive Bob Dudley.
“We delivered operationally and financially, with very strong earnings in the downstream, upstream production up 12 percent, and our finances rebalanced. And we did all this while maintaining safe and reliable operations,” the CEO said.
“We enter the second year of our five-year plan with real momentum, increasingly confident that we can continue to deliver growth across our business, improving cash flows and returns for shareholders out to 2021 and beyond.”
The results come one year after BP launched a five-year strategy aimed at returning the group to growth, as it continues to recover from the devastating 2010 oil spill catastrophe.
“We had strong delivery and growth across BP in 2017,” noted chief financial officer Brian Gilvary.
“The full-year underlying result was more than double a year earlier, our organic cash flows are back in balance and our financial frame remains resilient.”
BP saw its fortunes and reputation ravaged by the devastating oil spill disaster 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 litres) of oil to spew into Gulf waters, sparking the worst environmental catastrophe in US history.