Belfast Telegraph

BP’s outgoing boss to be dealt blow by low oil price

Tensions in the Middle East pushed up oil prices briefly in September, but they have reduced since.

BP will take a hit from a low oil price over the quarter (Anna Gowthorpe/PA)
BP will take a hit from a low oil price over the quarter (Anna Gowthorpe/PA)

By August Graham, PA City Reporter

BP will likely want to focus eyes on its production and away from profitability as chief executive Bob Dudley presents his final third quarter results on Tuesday.

The company will continue strong production, analysts expect, despite an outage when Hurricane Barry forced it to shut down production in the Gulf of Mexico for two weeks.

Middle East tensions in September briefly seemed to push up the price of oil enough to boost the bottom lines of the world’s majors.

Bob Dudley is set to step down next year, he will be replaced by Bernard Looney (BP/PA)

The price of a barrel of crude oil spiked by 20% after a drone attack hit Saudi Arabian refineries in September, taking out 5% of global oil production. It was the biggest increase since the early 1990s.

However, the rise was short lived as the Saudis quickly restarted production.

This is likely to eat into profits as BP shows investors what it has achieved on Tuesday.

“Investors should still expect reasonably good production figures for the third quarter but lower average oil prices during this period will put a dent on profitability,” said analysts at the Share Centre.

Analysts believe the company’s underlying replacement cost profit, what BP calls its net income, will reach 1.73 billion US dollars (£135 billion) over the quarter. It compares to 3.83 billion dollars (£2.99 billion) in the same period last year.

Although outgoing chief executive Mr Dudley will be looking to cement his legacy before stepping down next year, he is likely to be remembered for helping to steer the company through the Deepwater Horizon scandal.

BP was forced to pay around 65 billion dollars (£51 billion) to clean up the Gulf of Mexico after the largest environmental disaster in US history.

But the American has signalled he might be trying to put another clean up on his CV, as the company looks to push its green credentials.

On Thursday, Mr Dudley called for a price on carbon emissions to drive up the cost of dirty energy.

“Get a price on carbon and boy, the market will respond,” Mr Dudley said at a conference in London, according to CNBC.