BP Shares, Boosted by Higher Oil Prices, Hit Eight-Year High

Roman Schwartz
May 2, 2018

Like the handful of big oil firms that have already reported in recent days, London-based BP benefited handsomely from recently lofty oil prices.

Upstream reported the strongest quarter since third quarter 2014 on both a replacement cost and underlying basis.

Shares in BP (LON:BP) have climbed into positive territory today as the oil major updated investors on its first-quarter performance, posting a rise in profits on the back of stronger crude prices.

The stock has been recovering after crashing in the wake of the Deepwater Horizon blast eight years ago, which killed 11 workers and sparked the biggest oil spill in United States history.

But the group continued to count the cost of its 2010 Deepwater Horizon tragedy in the Gulf of Mexico, with another 1.6 billion United States dollars (£1.2 billion) forked out in the first quarter. Shares rose 1.2 per cent to 544.5 pence at 8.19 am in London.

Then-Chief Executive Tony Hayward resigned the following month, and BP started what would turn out to be a multiyear, multibillion-dollar effort to recover.

Kim Kardashian Breaks Silence on Tristan Thompson Scandal: 'It's So F**ked Up'
According to the source, Kourtney, 39, has been particularly supportive of her sister's decision. One even claims that she's pregnant with his baby. "It's just so messed up", Kim finished.

Investors are looking closely at cash flow as an indication of Big Oil's ability to pass on the rewards of higher prices through share buybacks.

That set BP shares on an upward trajectory because it comfortably beat market expectations of $2.2 billion.

The group said it produced 3.7 million barrels of oil equivalent per day during the quarter, a 6 per cent rise compared with the first quarter of 2017.

Oil prices have nevertheless shot above $70 a barrel from below $30 in early 2016. BP started a record number of new projects around the world a year ago and is planning to begin production at six more in 2018, part of a plan to add 900,000 barrels a day of new production by 2021.

It has so far cost the group more than 65 billion U.S. dollars (£48 billion), and although BP has all the major settlements now under its belt, it still has a few smaller legal bills to pay.

BP also disclosed that its Gulf of Mexico oil spill payments in the quarter were $1.6 billion on a pre-tax basis, including $1.2 billion for the final payment relating to the 2012 Department of Justice settlement. Underlying profit was up 23 per cent on the previous quarter and was our best quarterly result in three years. It is still paying on it, and it will continue to pay for several more years, but as oil prices improve so has BP's outlook for the future.

Other reports by

Discuss This Article