BP returns to profit in second quarter

bpLONDON: BP returned to profit in the second quarter on slashed charges linked to the Gulf of Mexico oil spill disaster and on firmer crude prices, the energy giant said Tuesday.

Net profit stood at US$144 million (122 million euros) in the three months to June 30 compared with a loss after tax of US$1.4 billion in the second quarter of 2016, the British group said in a results statement.

It noted however that profits were capped by larger tax payments this time around and an exploration write-off in Angola.

Looking ahead, chief executive Bob Dudley said BP would continue with a “tight focus on costs, efficiency and discipline in capital spending”.

Oil companies are cutting investments and jobs in addition to selling off non-core assets after a tough few years that saw crude prices crash prior to the start of their recovery over the past 12 months.

The average price of benchmark North Sea Brent oil rose to US$49.64 per barrel in the second quarter from US$45.59 per barrel a year earlier, BP said in its statement.

In the second quarter, the latest Gulf of Mexico oil spill charge before interest and tax came in at US$347 million, far lower than the hit of US$5.1 billion a year earlier.

“While net debt rose primarily due to Gulf of Mexico payments, we expect this will improve over the second half as these payments decline and divestment proceeds come in towards the end of the year,” BP chief financial officer Brian Gilvary added in Tuesday’s statement.

The company continues to be hit by costs linked to a deadly explosion on a BP-leased drilling rig in 2010 that unleashed the worst environmental disaster in US history.

The blast killed 11 workers and spilled oil for 87 days until it was plugged. The disaster blackened beaches in five US states and crippled tourism and fishing industries.

BP on Tuesday said the total cost of the disaster to the company to date, including fines and compensation to businesses, stands at more than US$63 billion.