BP Profits Fall on Oil Price Volatility -- Update
April 30 2019 - 3:25AM
Dow Jones News
By Christopher Alessi
LONDON-- BP PLC said Tuesday its profit dropped by 12% in the
first quarter due to a weaker oil price environment at the start of
2019, echoing anemic quarterly results recently reported by other
Big Oil companies.
U.K.-based BP said its replacement cost profit--a number
analogous to the net income that U.S. oil companies report--was
$2.1 billion for the quarter ended March 31, compared with $2.39
billion during the same period last year.
Stripping out one-off items, its underlying replacement cost
profit, BP's preferred metric, fell 8.8% to $2.4 billion. That was
slightly ahead of a company-compiled broker forecast that had
predicted an underlying replacement cost profit of $2.3 billion for
the first quarter.
BP's shares were up 0.8% in early trading in London.
The company's results come as the world's other major
oil-and-gas companies have reported underwhelming first-quarter
earnings. U.S.-based Exxon Mobil Corp. and Chevron Corp., along
with France's Total SA, all reported profit declines for the first
quarter. Dutch-Anglo oil giant Royal Dutch Shell PLC is set to
report later this week.
The first quarter started with weaker oil prices than the year
prior, with Brent--the global oil benchmark--averaging $63 a
barrel, compared with $67 a barrel in the first quarter of
2018.
Oil prices plummeted by around 40% in the fourth quarter of last
year on the back of a burgeoning global supply glut. But prices
have staged a recovery since the start of the year--with Brent
climbing back more than 30%--amid renewed geopolitical risks to
supply and production cuts led by the Organization of the Petroleum
Exporting Countries.
"We produced resilient earnings and cash flow through a volatile
period that began with weak market conditions and included
significant turnarounds," BP Chief Executive Bob Dudley said in a
statement. He added that the company remained committed to capital
discipline and efficient project execution.
The company said it was continuing to integrate the near $11
billion of U.S. onshore oil-and-gas assets acquired from BHP
Billiton Ltd. last year. BP took control of the assets in
March.
BP said its upstream oil production rose 2% year-over-year, to
2.7 million barrels a day, aided by the BHP acquisition. The
company has also started production at three new upstream projects,
in Trinidad, Egypt and the Gulf of Mexico.
BP has been getting closer to its target of returning to
production levels last seen before the company's Deepwater Horizon
oil spill in the Gulf of Mexico nearly nine years ago. BP said
payments related to the 2010 disaster--the worst offshore oil spill
in U.S. history--amounted to $600 million in the first quarter. The
company's landmark $20 billion settlement with the U.S. government
in 2015 requires the oil giant to make annual payments of around $1
billion through the end of the next decade.
BP on Tuesday raised its quarterly dividend for shareholders to
10.25 cents a share, up 2.5% year-over-year but in line with recent
quarters.
Write to Christopher Alessi at christopher.alessi@wsj.com
(END) Dow Jones Newswires
April 30, 2019 04:10 ET (08:10 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
BP (NYSE:BP)
Historical Stock Chart
From Apr 2024 to May 2024
BP (NYSE:BP)
Historical Stock Chart
From May 2023 to May 2024