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BP profits soar as prices rise

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BP more than doubled its profits in the third quarter, thanks to stronger oil prices and higher production from new oil fields.

Profits rose to $3.8bn (£3bn) from $1.86bn a year earlier, its best quarterly result for five years.

Revenue in the July-to-September quarter jumped to $80.8bn, up from $60.8bn last year.

Richard Hunter, Head of Markets at interactive investor, commented: “BP has set the bar high for the oil majors in general, delivering a blockbuster set of earnings which have comfortably outpaced expectations.

“The strength of the oil price over the quarter was of course a factor, particularly with BP’s breakeven level pinned somewhere around $50 per barrel. A sharp spike in earnings coupled with an increasingly streamlined operation led to a 124% rise in replacement cost profit year on year and a 73% rise quarter on quarter. This has provided an amount of cash which has several positive ramifications. The company now expects to pay for the BHP Billiton acquisition entirely in cash and without the need for equity, the monies which had been earmarked for the purchase will now be used to pay down net debt and even then there is an ample surplus to increase the dividend and keep the share buyback programme on track.“




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