BP first-quarter profits dropped due to a weaker oil price and margin environment at the start of 2019, the UK energy giant said, adding, however, that the results demonstrate resilient earnings and cash flow through a volatile period, continued momentum and marketing growth, and strong progress on reducing emissions.
“BP’s performance this quarter demonstrates the strength of our strategy. With solid Upstream and Downstream delivery and strong trading results, we produced resilient earnings and cash flow through a volatile period that began with weak market conditions and included significant turnarounds,” BP CEO Bob Dudley said in a statement posted on the company’s website. “Moving through the year, we will keep our focus on disciplined growth, with efficient project execution and safe and reliable operations,” he added.
According to BP, underlying replacement cost profit for the first quarter of 2019 was $2.4 billion, compared to $2.6 billion a year earlier. The result reflected the weaker price and margin environment at the start of the quarter, partially offset by strong supply and trading results.
Operating cash flow, excluding Gulf of Mexico oil spill payments, for the quarter was $5.9 billion, including a $1.0-billion working capital build (after adjusting for inventory holding gains). Gulf of Mexico oil spill payments in the quarter were $0.6 billion.
New projects and marketing growth
Reported oil and gas production for the quarter averaged 3.8 million barrels a day of oil equivalent. Upstream production, which excludes Russia’s Rosneft, was 2% higher than a year earlier. BP-operated Upstream plant reliability was 96.2%.
Integration of US onshore assets acquired from BHP continues, with BP taking operational control in March.
Three Upstream major projects – in Trinidad, Egypt and the Gulf of Mexico – have started production in 2019 and BP has taken final investment decisions for three more Upstream major projects, BP said.
According to BP, downstream continued growth in fuels marketing reflected increased numbers of convenience partnership sites and expansion in new markets.
Advancing low carbon
Strong progress is being made towards BP’s published targets for operational greenhouse gas (GHG) emissions, with reduced operational GHG emissions in 2018, good delivery of sustainable GHG emissions reductions, and methane intensity remaining on target.
A $100-million fund to support new emissions-reducing projects in the Upstream was announced, as well as an agreement with Environmental Defense Fund to advance technologies and practices to reduce oil and gas industry methane emissions, BP said.