BP’s annual profit more than doubled on back of higher oil prices and its strongest output growth in recent history.
BP reported a surge in full-year profits to $6.2 billion from $2.6 billion in 2016. It’s fourth-quarter net profit was $2.1 billion, a jump from $400 million a year earlier.
“2017 was one of the strongest years in BP’s recent history,” chief executive officer Bob Dudley said in a statement. “We delivered operationally and financially.”
Upstream production for the year rose 12 percent to 2.47 million barrels per day (bpd) after BP launched seven new oil and gas fields in 2017, a record year.
BP plans to start up six additional projects this year including in U.S., Egypt, Azerbaijan and Britain’s North Sea, helping boost production by 900,000 barrels of new, major project production by 2021, most of it gas. It previously said it would launch five new projects this year.
BP’s refining and trading business, (downstream), saw profits rise to $7 billion in 2017, up 24 per cent from the year-earlier period as margins rose.
Meanwhile, payments for the Deepwater Horizon spill continued to weigh. BP paid $5.2 billion for the full year, which was down from $6.9 billion in 2016. The company took a $1.7 billion charge in the fourth quarter due to higher-than-expected claims settlements, bringing the total legal and clean-up costs to $65 billion.
BP also took a one-off charge of $900 million to adjust to new U.S. tax rules, but Dudley said BP will invest more in the United States as a result.
BP’s full-year capital spending reached $16.5 billion, within the annual range of $15-$17 billion it plans to maintain until 2021.
“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,” Dudley said.
BP began a shares buyback in the fourth quarter, spending $343 million, which fully offset the dilution from scrip dividends issued in the third quarter, it said.
Dudley said BP is currently a 3.6 million barrel per day company including equity production in Russia, with an estimated 18.4 billion barrels of proved oil equivalent reserves, which gives BP 13.7 years of reserve life.
“Across our total Upstream resource base of 48 billion barrels, we have sufficient opportunities to deliver quality growth through the next decade, and beyond, without the need for acquisitions or further exploration,” he said.