BP says reaches turning point, 18 months after oil disaster

25th October 2011, Comments 0 comments

BP surged back into profit in the first nine months of the year, it said Tuesday, declaring that it has now reached a "clear turning point" after the devastating Gulf of Mexico oil disaster in April 2010.

The energy major added it will sell another $15 billion of non-core assets by 2013, expanding its divestment programme to $45 billion, as it seeks to recover oil spill-related costs and re-invest in high-growth activities.

And the London-listed company, whose reputation was ravaged by the fatal Gulf of Mexico catastrophe, predicted that that BP's cashflow would grow by around 50 percent by 2014 -- which would mean greater returns for shareholders.

Net profits struck $17.7 billion in the nine months to September, helped by high oil prices, BP said in a results statement. That compared with a loss of $9.3 billion in the same part of 2010 when it was hit by huge oil spill costs.

And BP's replacement cost profit, a keenly-watched measure that strips out gains or losses from inventories and other non-operating items, hit $15.9 billion in the nine-month period.

That also contrasted sharply with a loss of $9.5 billion last time around on the back of the $40-billion charge it took in respect of spill-related costs.

"The company has steadied, turned round and now, this month, with high-margin assets returning on stream, we have reached a clear turning point," said Chief Executive Bob Dudley.

He added that BP had lived up to its commitments in the Gulf and was putting "safety and risk management at the absolute heart of our business".

Third-quarter production meanwhile fell 12 percent to 3.319 million barrels of oil equivalent per day, due to the suspension of production in the Gulf, though BP expects output to be higher in the current fourth quarter.

"Our operations are regaining momentum and we are facing the future with great confidence," added Dudley.

"I believe we will build on our strengths to substantially grow operating cash flows, allowing us to directly increase returns to shareholders as well as invest for future growth."

In reaction to the results, shares leapt 4.13 percent to 456.2 pence on London's FTSE 100 index of leading companies, which was 0.28 percent higher at 5,563.49 points.

Net profits meanwhile rocketed to $4.91 billion in the third quarter, or three months to September. That compared with $1.79 billion last time around.

BP added that previously-announced plans to sell two US refineries and associated marketing activities were included in the expanded asset disposal programme.

The results come one week after BP received approval from US authorities to restart drilling in the Gulf of Mexico, 18 months after a BP well blowout killed 11 and released millions of barrels of crude into the ocean.

The group had meanwhile announced last week that it had recovered $4.0 billion in costs linked to the spill from US group Anadarko Petroleum Company.

Anadarko has also agreed to transfer to BP its 25 percent stake in the Macondo well.

Earlier this month, the US government slapped BP, Transocean -- the Swiss owner and operator of the drilling rig -- and US oil services group Halliburton with citations for violating oil industry regulations in what is expected to lead to massive fines for the deadly 2010 oil spill.

The Macondo leak was triggered by an explosion on the BP-leased Deepwater Horizon rig in the Gulf of Mexico on April 20, 2010.


© 2011 AFP

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