Rising oil price helps buoy BP

Oil major BP has more than doubled profits thanks to higher oil prices and a tight rein on costs.

The oil giant remains a major North Sea player. Picture: BP

The energy giant said underlying replacement cost profit – an industry-standard measure – rose to $3.8 billion (£2.9bn) in the third quarter, up from $1.86bn in the same period last year.

Oil and gas production during the latest quarter averaged 3.6 million barrels of oil per day. Revenue rose to $80.8bn, up sharply from $60.8bn a year earlier. The quarterly dividend was raised 2.5 per cent to 10.25 cents.

Chief executive Bob Dudley said: “Our focus on safe and reliable operations and delivering our strategy is driving strong earnings and growing cash flow.

“Operations are running well across BP and we’re bringing new, higher-margin barrels into production faster through efficient project execution.”

The group also said its deal to acquire the US shale oil and gas assets from BHP Billiton for $10.5bn will complete this week.

Ian Forrest, investment research analyst at The Share Centre, said: “BP beat market expectations with profits in the third quarter more than double those of a year ago. The increase was mainly due to the higher oil prices seen in the period allied to a 6.8 per cent increase in underlying production.”

BP, which remains a major North Sea player, has been riding high on the back of rising oil prices this year. Since January, the price of Brent crude has risen from about $66 a barrel to around $76 today.

David Barclay, head of office at Brewin Dolphin Aberdeen, said: “A lot has changed in a year for BP, which has been buoyed by a rising oil price, cost cutting, and asset performance. It will add BHP’s shale gas assets to its portfolio, which could be a real turning point for the business following the Gulf of Mexico spill more than eight years ago.”