BP Posts Highest Quarterly Profit Since 2008
BP's quarterly profit has reached its highest level since 2008. Underlying replacement cost profit, a key measure of income, almost quadrupled to $8.46bn (£6.3bn) from $2.2bn a year earlier.
Analysts had expected $7.3bn. The last time BP did better was in 2008, when it recorded $8.9bn.
The company called it a "banner quarter". The war in the Middle East pushed up oil and gas prices and led to "significantly higher" trading. Refining did much of the work: the gap between the cost of crude and the price of fuels such as diesel and gasoline widened, earning almost $47 for each barrel.
Chief executive Meg O'Neill told Bloomberg TV that the refineries BP operates had very strong margins. "We were able to capture the opportunity provided by the market," she said. She added that the industry had shown "remarkable adaptability", with refineries running close to capacity, ships taking longer routes and strategic reserves being released.
Pump prices stay high
Global oil prices are still below the 2022 peaks. Pump prices for diesel, however, have hit record highs in the UK, Europe and the US in recent months because of severe disruption to refineries in the Gulf and Russia.
The RAC estimates diesel in the UK at 198.79p a litre. Petrol averages 172.92p, against 132.83p in late February, before the latest conflict began.
Jonathan Noronha-Gant of Global Witness called it "obscene that polluters are continuing to cash in on the fallout of the war in Iran". Danny Gross of Friends of the Earth said BP was "raking in huge profits while doubling down on gas and oil production and slashing investment in renewables".
Shell and TotalEnergies have also reported their strongest profits since 2022, helped by refining.
What BP will do with the cash
BP said it would use excess cashflow to pay its remaining liabilities in full from the 2010 Deepwater Horizon spill. Last week it agreed an accelerated lump-sum payment of $350m to Louisiana and settled coastal damage litigation brought by local parishes.
A strategy update, the first under O'Neill, is due on 15 December. Market observers expect it to set out plans to grow oil and gas production and possibly restart share buy-backs next year.
BP also plans to sell its UK North Sea oil and gas assets in a deal that could be worth between £2bn and £2.5bn. Neo Next+, Ithaca Energy and Adura have been named as possible buyers. Last month BP appointed Ian Tyler as its new chair after Albert Manifold was ousted.
Source: The Guardian