UK oil major BP saw its profit more than double during the third quarter of 2018, making it the highest quarterly result in more than five years.
For the third quarter 2018, BP’s underlying RC profit was $3.8 billion, which is more than a double from a year earlier and the highest quarterly result in more than five years, including significant earnings growth from the Upstream and Rosneft. This compares to a $1.87 billion profit in the third quarter 2017.
Underlying RC profit is after adjusting RC profit for a net charge for non-operating items of $649 million and net adverse fair value accounting effects of $98 million (both on a post-tax basis).
RC profit was $3.09 billion for the third quarter, compared with $1.38 billion in 2017.
According to BP, compared with the same periods in 2017, the results for the third quarter were primarily affected by higher oil prices, significant foreign exchange impacts and certain one-off items.
Organic capital expenditure for the third quarter was $3.7 billion compared with $4 billion for the same period in 2017. Inorganic capital expenditure for the third quarter was $0.7 billion compared with $0.5 billion for the same period in 2017.
Bob Dudley – Group chief executive, commented: “Operations are running well across BP and we’re bringing new, higher-margin barrels into production faster through efficient project execution. We have made very good progress with our acquisition from BHP and expect to complete the transaction tomorrow. This will transform our position in the US Lower 48 and we expect it to create significant value for BP.”
Brian Gilvary – Chief financial officer, said: “This quarter’s underlying result was significantly higher than the second quarter in a very similar price environment. Since we announced the BHP transaction, oil prices have firmed to levels significantly above the acquisition assumptions. While oil prices remain at these levels, we expect to finance the transaction fully using cash. In this event, the $5-6 billion divestment program linked to the transaction will be used to reduce debt.”
In the Upstream section of the business BP saw its underlying RC profit rise to $4 billion from $1.56 billion in the same period last year.
Production for the quarter was 2,460mboe/d, flat with the third quarter of 2017. Underlying production for the quarter increased by 6.8%, due to the ramp-up of major projects.
Looking ahead, BP expects fourth-quarter reported production to be higher than the third quarter due to the acquisition of BHP assets in the US Lower 48.
Offshore Energy Today Staff