Oil Drilling

BP Underlying Profit Doubles in Third Quarter on Rising Production, Fuel Sales

6:24 AM, Oct 31, 2017 — UK oil major BP (BP, BP.L) said that its underlying replacement cost profit, its preferred profit measure, for the third quarter, doubled from a year earlier on rising oil production and double-digit earnings growth from fuels sales.

Underlying replacement cost profit, an adjusted measure which excludes a net charge for non-operating items of $274 million and net adverse fair value accounting effects of $212 million, totaled $1.87 billion, compared with $933 million a year earlier, the company said in a statement on Tuesday. Revenue climbed to $60.81 billion from $48.04 billion in the same period last year, the company said.

“We are steadily building a track record of delivering on our plans and growing across our businesses,” Bob, Dudley chief executive at BP, said. “This quarter, three new Upstream projects and the highest Downstream earnings in five years, underpinned by reliable operations and disciplined spending, have generated healthy earnings and cash flow.”

BP also said it’s restarting a share buyback program in the fourth quarter to offset the dilutive effect of its scrip dividends over time.

Three major projects, the Persephone project in Australia, the Juniper project in Trinidad, and the first phase of the Khazzan tight gas development in Oman, began production in the third quarter. The company said it expects the seventh, and last of the production projects planned for 2017, Zohr in Egypt, to start up before the end of the year.

Reported group oil and gas production in the third quarter averaged 3.6 million barrels of oil equivalent a day, 14% higher than a year earlier.

The company said that in the fourth quarter it expects a normal seasonal decline compared with the third quarter in the “robust” industry refining margins.

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