Oil giant BP sees annual profits soar to £4.4bn

Oil giant BP sees annual profits soar to £4.4bn

Oil giant BP sees annual profits soar to £4.4bn

BP (LON:BP) announced Tuesday an increase in underlying profits by 139 percent to $6.2 billion in 2017, marking the biggest year since the Deepwater Horizon accident.

Underlying replacement cost profit was $2.11 billion for the fourth quarter, compared to $400 million a year ago.

Besting its industry peers, British energy company BP said Tuesday that profits more than doubled in 2017 and production was its highest since 2010.

"The previous year was one of the strongest in the BP's recent history", said the CEO of BP, Bob Dudley.

The London-listed company saw one of the strongest output increases in its history past year, lifting production to levels not seen since the 2010 Deepwater Horizon spill.

Operating cash flow was $24.1 billion compared to $17.6 billion in 2016, increasing by a 24 percent, excluding the Gulf of Mexico oil spill payments.

BP further reported that its exploration had delivered the most successful year for the company since 2004, while the group's upstream production jumped 12 percent.

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"We are increasingly confident that we can continue to deliver growth across our business, improving cash flows and returns for shareholders out to 2021 and beyond".

Deepwater Horizon-related payments in the fourth quarter were USD300.0 million, bringing the year's total to USD5.2 billion, down from 2016's USD6.9 billion of payouts.

For the full year, production costs per barrel tumbled by 16% to $7.11 (£5.09), with BP's output reaching its highest level since the year of the Gulf of Mexico oil spill.

BP's earnings also got a boost as seven new projects came on line during the year. As of October it had managed just USD1.0 billion in divestments, but achieved USD2.5 billion in the fourth quarter overall. The company is back to breaking even at current oil prices, but will still maintain capital discipline and plans divestments of between $2 billion and $3 billion in 2018, he said.

Dividends remained unchanged at 10 cents per share.

BP would generate profit in 2018 at an oil price of $50 a barrel, chief financial officer Brian Gilvary said, as years of spending cuts kicked in and as it slowly shakes off a $65bn bill for penalties and clean-up costs of the 2010 spill.

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