BP profits surge by 71% on higher oil prices

BP has reported a surge in profits for the first quarter of 2018. Picture : ANTONY KELLY

BP has reported a surge in profits for the first quarter of 2018. Picture : ANTONY KELLY - Credit: copyright ARCHANT 2017

Rising oil prices have helped BP to its best quarterly result for three years.

The oil giant said underlying replacement cost profits jumped by 71% to $2.6bn (£1.9bn) for the first three months of 2018.

On a bottom-line basis profits rose 70% to $2.4bn (£1.7bn).

BP said its upstream operations – which cover exploration and production – enjoyed the best quarter since the third quarter of 2014, with underlying profits more than doubling to $3.2bn (£2.3bn).

The company's production rose 6% in the first quarter compared with a year ago.

But the group continued to count the cost of its 2010 Deepwater Horizon tragedy in the Gulf of Mexico, with another $1.6bn (£1.2bn) forked out in the first quarter – including $1.2bn (£873m) for the final payment of its 2012 settlement with the Department of Justice.

During the quarter, BP completed another $200m (£146m) worth of divestments as it continues to sell off assets, and kept its guidance for between $2bn (£1.5bn) and $3bn (£2.2bn) over the full year.

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Group chief executive at BP Bob Dudley – who saw a two-year row over his pay come to an end in March – praised 'another strong set of results'.

He added: 'Our safe and reliable operations and strong financial delivery have continued into 2018.

'Underlying profit was up 23% on the previous quarter and was our best quarterly result in three years.'

The sector has been buoyed by rising oil prices, which hit nearly 76 US dollars a barrel on Monday.

Rival oil major Royal Dutch Shell last week reported a 42% rise in underlying quarterly profits to $5.3bn (£3.8bn).