UK oil giant BP has seen its second quarter profits turnaround with a net profit of US$144 million compared with a loss of $1.42 billion in the same period of 2016, helped by a higher oil price and cost cutting programme.
Chief executive Bob Dudley said: “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 a barrel.”
The company said it generated $4.9 billion in operating cash flow in the second quarter, compared with $3.9 billion the year before.
BP remained bogged down by costs associated with the Gulf of Mexico spill in 2010. It reported a charge of $347 million to “reflect the latest estimate for claims” resulting from the spill.
Brian Gilvary, chief financial officer added: “Cash flow was strong in the first half. While net debt rose primarily due to Gulf of Mexico payments, we expect this will improve over the second half as these payments decline and divestment proceeds come in towards the end of the year.”
Upstream production in the second quarter was 10 per cent higher than in the same period in 2016 reaching to 2.4 million barrels a day of oil equivalent.
“We’ve seen three of our seven major Upstream projects come on-stream already this year in Egypt, the UK North Sea and Trinidad – and the others are right on track. In Exploration, we’ve had four discoveries in the first half of the year: two in Trinidad, one in Egypt and one in Senegal, where we are setting up a new business to pursue opportunities there and in Mauritania,” said Dudley
Dudley touched on how BP is looking to focus even more on gas.
“Six of our seven major projects this year are gas, while the four discoveries we’ve made are also gas resources. That's significant because natural gas is a lower carbon, cleaner burning fuel, producing about half the carbon dioxide emissions of coal when burned for power. That makes gas an important part of the energy transition over the coming decades.”