Rising oil prices and cost cutting help BP return to profit
Return to profit came after boss Bob Dudley’s pay packet slashed by 40%.
Oil giant BP has returned to profit in the first three months of the year thanks to rising oil prices and ongoing cost cutting efforts.
The group said it swung out of the red with replacement cost profits of 1.4 billion US dollars (£1.1 billion) for the first quarter against losses of 485 million US dollars (£377 million) a year earlier.
A bounce back in oil prices saw Brent crude stand around 58% higher than a year earlier in the first quarter, at around 53.69 US dollars a barrel.
Bob Dudley, group chief executive of BP, said the year had “started well” for the group.
He added: “BP is focused on the disciplined delivery of our plans. First quarter earnings and cash flow were robust.”
On an underlying basis, BP nearly trebled replacement cost profits to 1.5 billion US dollars (£1.2 billion) from 532 million US dollars (£413 million) a year earlier.
The better-than-expected figures came after BP said it saw a 5% rise in production, boosted as the first of a raft of new projects came on stream.
Mr Dudley said: “The first of our seven new upstream major projects has started up, with a further three near completion.
“We expect these to drive a material improvement in operating cash flow from the second half.”
The figures follow impressive earnings reports from US rivals ExxonMobil and Chevron last week as the industry benefits from a bounce back in crude prices, which had hit near 13-year lows early last year.
BP’s closest rival, Royal Dutch Shell, is also expected to post a leap in profits when it reports on Thursday.
First quarter figures from BP come after it revealed last month it had slashed Mr Dudley’s 2016 pay package by 40% and cut his maximum earnings by 3.7 million US dollars (£2.9 million) to see off a fresh shareholder rebellion.
Its annual report showed Mr Dudley’s pay package was cut to 11.6 million US dollars (£8.5 million) as the group looked to avoid a repeat of last year’s investor revolt, when almost 60% of BP shareholders voted against his 20% pay hike.