BP profits rise as oil prices recover

British energy major BP on Tuesday logged a modest increase in third-quarter net profit, energised by a recovery in the global price of oil.

BP said in a statement that bottom-line net profit rose by nine percent to $1.769 billion (1.521 billion euros) in the three months to September.

Oil and gas production rose to an average of 3.6 million barrels of oil per day during the third quarter after it launched a number of new projects.

And BP also announced a share buyback scheme for the fourth quarter, sending its share price rallying.

In recent years, the group has slashed costs to remain profitable despite tumbling oil prices, which have now steadied at about $50 per barrel.

BP saw its fortunes and reputation ravaged by the devastating Gulf of Mexico oil spill disaster in 2010.

Its third-quarter performance was, however, boosted by new projects in its upstream business that comprises exploration and production.

The downstream division, which includes refining, marketing and distribution, also enjoyed a bumper three months.

"We are steadily building a track record of delivering on our plans and growing across our businesses," said chief executive Bob Dudley.

"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," he said.

"There is still room for further improvement and we will keep striving to increase sustainable free cash flow and distributions to shareholders," Dudley added.

The results came almost two weeks after chairman Carl-Henric Svanberg announced his decision to step down after a spell of almost eight years.

Svanberg became chairman in January 2010 -- shortly before the Deepwater Horizon oil rig exploded in April of the same year in the Gulf of Mexico.

The blast killed ten 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 US history.

The total cost of the disaster to the company to date, including fines and compensation to businesses, stands at $63.4 billion.

As chairman, Svanberg also helped guide the company through a precipitous plunge in world oil prices.

Investors welcomed the quarterly figures, with BP's shares showing a gain of 1.7 percent at 510.30 pence in afternoon deals on the London stock exchange, outpacing the overall market which was up 0.1 percent.

"BP has spent the past seven years addressing big problems, with first the Gulf of Mexico disaster and then the oil price crash throwing the group into disarray," said Nicholas Hyett, equity analyst at Hargreaves Lansdown.

"Those headwinds are finally fading into the history books.

"Gulf payments are still soaking up mind-boggling quantities of cash, but are finally starting to recede."

Source:AFP