BP's Profits Surge to $6.2b

BP’s profits more than doubled in 2017 to $6.2 billion due to a large increase in oil and gas production, as the company resumed share buybacks in a sign it had left a three-year downturn behind.

“2017 was one of the strongest years in BP’s recent history,” said Chief Executive Officer Bob Dudley in a statement, Reuters reported. 

“We enter the second year of our five-year plan with real momentum, increasingly confident that we can continue to deliver growth.” 

Full-year production rose 12% to 2.47 million barrels per day after BP launched seven new oil and gas fields in 2017, a record year. 

It was set to inaugurate five additional projects this year, including in Egypt, Azerbaijan and the UK North Sea that will help it boost production by 800,000 barrels per day by 2020, which will be mostly gas. 

BP’s refining and trading segment, known as downstream, also saw profits rise to $7 billion in 2017, as earnings for the marketing division rose by over 10%. 

It became the first European oil and gas major to resume share buybacks after a three-year downturn, announcing plans to purchase $1.6 billion per year in order to offset the dilutive effect of scrip dividends when shareholders can opt to receive dividends via cash or shares. 

In the fourth quarter of 2017, it bought $343 million worth of shares, according to its website. The move was a clear sign that BP has turned a corner after the slump in oil prices and as it gradually shakes off a $65 billion bill for penalties and clean up costs of the deadly 2010 Deepwater Horizon spill. 

In 2017, BP was able to cover spending and full dividend payouts at oil prices of $50 a barrel. BP reported fourth-quarter underlying replacement cost profit, the company’s definition of net income, of $2.1 billion, exceeding forecasts for $1.9 billion, according to a company-provided survey of analysts. 

That compared with a profit of $400 million a year earlier and $1.9 billion in the third quarter of 2017. On an annual basis, BP’s profits soared to $6.2 billion from $2.6 billion in 2016.