BP Sees Five-Fold Rise In Q4 Earnings Amid Higher Oil Prices

BP share price Group’s annual profits surge as oil price recovers

Annual profits at BP have more than doubled in the space of a year - rocketing to £4.4bn in 2017 on the back of higher oil prices.

BP posted group underlying RC profit of USD6.17 billion for 2017, more than double 2016's USD2.59 billion, and ahead of company provided consensus of USD6.00 billion.

The blast killed 11 men off the coast of Louisiana and caused 134 million gallons (507 million litres) of oil to spew into Gulf waters, sparking the worst environmental catastrophe in USA history.

Bob Dudley, the group chief executive of BP, said: "This has been a really, really good year and it sets us off very well to enter into 2018". It marked the best year for production since 2010.

Annual output rose 12% to 2.47 million barrels per day after BP started work on 7 new oil and gas fields in 2017.

Operating cash flow for FY 2017, excluding Gulf of Mexico oil spill payments, was $24.1B vs. $17.6B in 2016; Gulf of Mexico oil spill payments totaled $5.2B vs. $6.9B a year ago. "And we did all this while maintaining safe and reliable operations", Dudley added.

"It is important for us, there is no doubt we will increase investments", Dudley, himself a USA citizen, said in an analyst call after BP reported a surge in profits in 2017.

Adjusted net income of $2.11 billion beat analysts' expectations of $1.95 billion.

BP also took a one-off charge of $900m to adjust to new USA tax rules, although it expected a long-term boost from the lowered corporate tax rates. Net debt fell to $37.8 billion at the end of the fourth quarter, down significantly from $39.8 billion in the preceding period.

BP maintained its fourth-quarter dividend at USD0.10 per share, the same as previous year.

BP began share buybacks in the fourth quarter, spending $343 million, fully offsetting the dilution from scrip dividends issued in the third quarter.

There's no guarantee that the cost of the Deepwater Horizon disaster won't rise again, but it will be entirely manageable from cash flow this year and next, Chief Financial Officer Brian Gilvary said by phone.

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