BP reports strong earnings, strategic momentum

BP/FILE PICTURE

The Shah Deniz Bravo platform in Azerbaijan.

UK energy giant transforms its US onshore oil and gas business, acquiring unconventional assets from BHP in Texas


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UK energy giant BP’s profit increased in the second quarter of 2018, including the replacement cost profit for the second quarter of the year which was $2.8 billion, or  four times the reported amount for the same period in 2017, with significantly higher earnings from the Upstream and Russian oil major Rosneft, BP said in a press release on July 31.

“We continue to make steady progress against our strategy and plans, delivering another quarter of strong operational and financial performance,” BP CEO Bob Dudley said. “We brought two more major projects online, high-graded our portfolio through acquisitions such as BHP’s US onshore assets and invested in a low-carbon future with the creation of BP Chargemaster. Given this momentum and the strength of our financial frame, we are increasing our dividend for the first time in almost four years. This reflects not just our commitment to growing distributions to shareholders but our confidence in the future,” he added.

According to BP, operating cash flow excluding Gulf of Mexico oil spill payments was $7.0 billion in the second quarter – which included a $1.3 billion working capital release (after adjusting for inventory holding gains) – and $12.4 billion in the first half, including a $0.4 billion working capital build.

The dividend was increased 2.5% to 10.25 cents a share, the first rise since the third quarter of 2014, BP said.

Upstream reported the strongest quarter since the third quarter of 2014 on both a replacement cost and underlying basis. Oil and gas production: reported production in the quarter was 3.6 million barrels of oil equivalent a day. Upstream production, excluding Rosneft, was 1.4% higher than a year earlier and up 9.6% when adjusted for portfolio changes and pricing effects, driven by rising output from new major projects and strong plant reliability.

Major projects, including start-ups in Azerbaijan, Russia, and Egypt, and three new projects expected to start in 2018 are now online, BP said.

Bp agreed to buy world-class US onshore oil and gas assets from BHP, a $10.5 billion acquisition that will transform the former’s business in the US’ Lower 48 states. BP also agreed to increase its stake in the Clair oilfield in the UK while exiting the Greater Kuparuk Area in Alaska.

Downstream reported strong first half refining performance, with record levels of crude processed at the US’ Whiting refinery; further expansion in fuels marketing, with more than 1,200 convenience partnership sites now across our retail network, BP said.

Advancing the energy transition: acquisition of UK’s largest electric vehicle charging company Chargemaster and investment in innovative battery technology firm StoreDot move forward BP’s approach to advanced mobility.

Gulf of Mexico oil spill payments in the quarter were $0.7 billion on a post-tax basis.

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