BP annual profits soar to £4.4bn on higher oil prices

 

BP/Wikimedia

(qlmbusinessnews.com via telegraph.co.uk – – Tue, 6 Feb 2018 London, Uk – –

BP has unveiled the clearest sign yet that the oil major is emerging from the gloom of the Deepwater Horizon disaster and the global market downturn, with a $6.2bn (£4.4bn) profit boom for 2017.

The FTSE 100 energy giant’s better than expected full-year results revealed strong operating cash flows, which were driven higher by the recovery in global oil prices and a 12pc growth in BP’s oil and gas business.

BP made $6.2bn in replacement cost profits, its standard measure of profitability, for the full year compared to just $2.6bn in 2016 when oil prices were at their lowest ebb. In the final quarter of last year alone BP made $2.1bn, up from just $400m in the last quarter of 2016.

BP boss Bob Dudley said last year was “one of the strongest years in BP’s recent history”, which will accelerate the momentum of the the group’s five-year plan as it enters its second year.

Brian Gilvary, BP’s chief financial officer, added that the group’s cash flows were now “back in balance” as it undertakes the start of its programme to buy back the shares it paid out to shareholders in lieu of dividends during the oil market rout.

BP spent $343m on share buy backs in the final quarter, which Mr Gilvary said more than offset the scrip dividends offered in September.

The group’s rigorous discipline on spending has brought BP’s costs down from $60 a barrel to $53 a barrel and will remain in place for 2018 to allow further buybacks, Mr Gilvary added.

But the tight reign on spending has nonetheless driven “the most activity we’ve seen in recent years if not in the history of the company”, he said.

BP is working hard to grow its production portfolio after years of austerity. It will start up five new oil and gas projects this year and also undertake “measured” investments in new energies including biofuels and electricity.

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