Finance

BP says annual profit rockets on higher oil prices

BP says annual profit rockets on higher oil prices

The oil giant posted fourth-quarter underlying replacement cost profit, used as a proxy for net profit, of $2.1 billion, beating analysts' projections of $1.9 billion.

BP opened seven new oil and gas fields during 2017 and its oil production rose 12 per cent to 247m barrels of oil per day.

"The company is operating and firing on all cylinders", Chief Executive Officer Bob Dudley said in an interview with Bloomberg television. "And we did all this while maintaining safe and reliable operations", Dudley added.

With a 20% bounce in oil prices in the last quarter of 2017 to $61 a barrel, BP had a surplus of cash that allowed it to buy $343m worth of shares in the fourth quarter, offsetting the scrip dilution.

BP's strategic cooperation with Russian company Rosneft brought in underlying RC profit of USD836.0 million in 2017, well up on 2016's USD567.0 million. Brent crude, a benchmark for global oil prices, averaged $61.26 a barrel in the fourth quarter, up 24 percent from a year earlier.

"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".

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.

Production for 2017 in Upstream rose 12% to 2.5 million barrels of oil equivalent per day excluding Rosneft, reaching its highest level since 2010, with production costs falling 16% year-on-year to USD7.11 per barrel of oil equivalent.

"It is important for us - there is no doubt we will increase investments", said Dudley, a USA citizen who leads the British oil and gas company.

BP took a one-off charge of $900 million in the fourth quarter of 2017 to adjust to new USA tax rules, though it expects a long-term boost from the corporate-friendly rates. BP said it expects capex to be within a range of USD15.00 billion to USD16.00 billion in 2018.


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