Profits mark 'turning point' for BP
Published 25/10/2011 | 08:02
BP boss Bob Dudley has said that the embattled oil giant has reached a "definite turning point" following last year's Gulf of Mexico disaster as he revealed a boost to third-quarter profits.
BP reported replacement cost profit of 5.14 billion US dollars (£3.2 billion) for the three months to September, compared with 1.8 billion US dollars (£1.1 billion) in the same period last year when BP was hit by heavy charges for cleaning up the Gulf spillage.
BP said oil production over the quarter fell by 12% to 3.319 million barrels due to the suspension of production in the Gulf, though BP expects production to be higher in the current quarter.
Mr Dudley has been under pressure following the collapse of a deal with Russian group Rosneft to explore in the Arctic region, but has unveiled an increase in the company's divestment programme from 30 billion US dollars (£18.8 billion) to 45 billion US dollars (£28.1 billion).
Mr Dudley said he expected BP's cashflow to grow by around 50% by 2014 - meaning greater returns for shareholders.
The American, brought in to replace Tony Hayward in the wake of the crisis, said the extra cash would enable it to double its spending on new exploration and to increase its investment in its deep water operations, its giant fields and building its gas operations.
The group's payments into the Gulf of Mexico Trust Fund will end in 2012 and will provide half of the increase in cashflow, he added, while 17 new projects are due to come onstream over the next three years.
The group has restarted operations in the Gulf and last week received approval for an exploration plan for the Kaskida field in the region.
The cashflow forecast assumes oil prices of 100 US dollars per barrel, compared with an average of 112 US dollars so far this year, though lower production and higher maintenance activity and costs offset the benefit of higher prices in the latest quarter. For the nine months to September, BP posted profits of 15.9 billion US dollars (£9.9 billion).
"The company has steadied, turned round and now, this month, with high-margin assets returning on stream, we have reached a clear turning point," Mr Dudley said. He added that BP had lived up to its commitments in the Gulf and was putting "safety and risk management at the absolute heart of our business". Shares rose 3% after the update.