Energy major BP's second-quarter profits up by four times on last year

July 31, 2018
Increase in oil prices and fading of Deepwater Horizon fines pain boosts earnings for British multinational to $2.8bn

Higher oil prices and increased output boosted BP's second-quarter profit to $2.8 billion, four times that of a year ago.

The company also confirmed it would increase its quarterly dividend for the first time in nearly four years, offering 10.25 cents a share.

BP is turning a corner after the slump in oil prices and as it gradually shakes off a $65bn bill for penalties and clean up costs of the deadly 2010 Deepwater Horizon spill.

Underlying replacement cost profit, the company's definition of net income, exceeded forecasts of $2.7bn, according to a company-provided survey of analysts.

It earned $700 million a year earlier and $2.6bn in the first quarter.

First-half production rose to 3,662 million barrels of oil equivalent per day, including output at Rosneft, from 3,544 mboe/d a year ago.

Benchmark Brent crude futures, currently over $74 a barrel, have risen around 16 per cent over the first half of 2018 and around 60 per cent since June 30 2017.

In its biggest deal in nearly 20 years, BP last week agreed to buy US shale oil and gas assets from global miner BHP Billiton, for $10.5bn, expanding the British oil major's footprint in oil-rich onshore basins.

BP is also buying back shares to the tune of $200m in the first half of this year.

In the second quarter, it paid off $700m for the spill on a post-tax basis.

Gearing, the ratio between debt and BP's market value, declined to 27.8 per cent at the end of the quarter from 28.1 per cent at the end of March. Net debt was $39.3bn at the end of June compared with $40bn at the end of March.