BP profits slide amid lower oil prices
BP suffered a 40% drop in third-quarter earnings as it was hampered by cheap crude oil prices, but still beat analysts' estimates.
The oil giant's underlying replacement cost profit for the quarter came in at 1.819 billion US dollars (£1.185 billion), compared with 3.037 billion US dollars (£1.979 million) a year ago.
BP said the drop was a result of sharply lower oil and gas prices, which have more than halved to 50 dollars a barrel - compared with around 100 dollars 12 months ago.
However, the performance still comfortably exceeded analysts' estimates of 1.2 billion US dollars (£780 million) profit.
BP chief executive Bob Dudley said: "Last year, we acted decisively to reset BP for a sustained period of lower oil prices and the results are coming through well. We are now in action to rebalance our financial framework in this new price environment.
"And I am confident that BP's strong and well-balanced portfolio of businesses and projects gives us the ability to grow value into the future.
"All of this underpins our strong priority of sustaining our dividend and then growing free cash flow and shareholder distributions over the long term."
The firm also revealed that its total bill for the Deepwater Horizon oil spill has now hit 55 billion dollars (£35.85 billion), and warned costs could yet rise further.
"The total amounts that will ultimately be paid by BP in relation to the incident will be dependent on many factors," it said.
"These could have a material impact on our consolidated financial position, results and cash flows."
Looking to the fourth quarter, BP said it expected production to be slightly higher than the third quarter thanks to planned seasonal turnaround activity.
The oil giant announced a quarterly dividend of 10 cents per ordinary share, which is expected to be paid on December 18. The corresponding amount in sterling will be announced on December 7, it added.
Shares in the oil giant edged up 1.7% in early trading on the back of the better-than-expected results.
Hargreaves Lansdown equities head Richard Hunter said, although the firm clearly faced many challenges, the long-term outlook remained positive.
"There are some signs that BP is successfully negotiating spinning the many plates required in the current environment," he said.
"Quite apart from the ongoing weakness in the oil price, where BP has put a marker in the sand of 60 dollars on which to base its future estimates, its exposure to Russia and the Gulf of Mexico situation - not yet consigned to the history books - remain important drags on development.
"Meanwhile, as a reflection of the oil price level, capital expenditure is being further crimped, whilst the negative effect on profits cannot be ignored.
"Even so, this is a company with a firm focus on cutting its coat according to its cloth. Refining margins are better than expected, the company remains a cash generating machine and costs are being attacked aggressively to suit the difficult backdrop.
"BP's longer term outlook remains positive despite the interim hurdles and investors are certainly being paid to wait - the current dividend yield of 6.2% is extremely punchy given the current interest rate environment and is a particular attraction to those seeking income."