BP back in profit despite oil spill costs
Published 02/11/2010 | 08:55
Oil giant BP announced a return to profit today despite a further hit of $7.7bn (€5.5bn) from the Gulf of Mexico disaster.
The embattled firm posted profits of $1.85bn (€1.32bn) in the third quarter of 2010, compared with a loss of $17.1bn (€12.3bn) in the previous three months and profits of $5bn for the same period a year earlier.
The additional charge in the third quarter, which follows one of $32.2bn in July, reflected a delay in completing the relief well which finally sealed the Macondo well in September.
With BP benefiting from higher oil prices, its third-quarter profits excluding items relating to the spill rose 18pc to $5.5bn.
This was despite its exploration and production division recording lower production volumes due to the impact of the disaster on its Gulf of Mexico operations and as a result of seasonal changes.
Bob Dudley, the company's new American chief executive, said the results showed that BP was on "track for recovery".
He added: "We have made good progress during the quarter. This strong operating performance shows the determination of everyone at BP to move the company forward and rebuild confidence after the terrible events of the past six months."
The firm has already taken steps to rebuild trust after Mr Dudley unveiled a new safety and operational risk unit, a review of pay focusing on safety-led incentives and a review of third-party contractors.
Mr Dudley, who replaced embattled predecessor Tony Hayward on October 1, was frank in a speech at the CBI last week - saying the disaster "threatened the very existence" of the company.
However, he also sought to put to bed the many rumours surrounding the firm, stressing that it was financially "healthy" and would not, as many have speculated, be quitting the US.
The oil spill charge of $32.2bn in the second quarter included a $20bn compensation fund and sent BP into the red for the first time in 18 years.
Shares in BP plunged from their year high of 658.2p on April 21 - the day after the explosion which killed 11 workers and triggered the spill - and hit a low of 296p at the end of June. The value recovered to 425.4p last night.
BP reaffirmed the company's intention to review the possible return of dividends with the full-year results early next year.