BP third-quarter profits mark 'turning point'

 

The under-pressure boss of BP today insisted the beleaguered oil giant had reached a "turning point" despite production falling as it continues to sell off billions of pounds worth of assets in the wake of last year's Gulf of Mexico oil disaster.

The under-pressure boss of BP today insisted the beleaguered oil giant had reached a "turning point" despite production falling as it continues to sell off billions of pounds worth of assets in the wake of last year's Gulf of Mexico oil disaster.

Chief executive Bob Dudley revealed the group was increasing the size of its asset sale programme from $30bn (£18.8bn) to 45 billion US dollars (£28.1bn) as a part of a programme to boost its financial firepower.

BP posted replacement cost profits of $5.14bn (£3.2bn) for the three months to September, up from $1.8bn (£1.1bn) a year ago when BP was hit by heavy charges for cleaning up the Gulf spillage.

BP will also release a detailed strategic plan next February, which will include an update on its dividend policy. BP held its quarterly dividend at 7 cents per share.

BP accounts for £1 in every six invested by pension schemes and an increase in how much it pays out in dividends could mean a boost for pensioners.

Profits fell 3% quarter-on-quarter and daily oil production dropped by 12% to 3.32 million barrels, due to the suspension of production in the Gulf, though BP expects output to be higher in the current quarter. The company was producing 4 billion barrels a day before the disaster.

Mr Dudley said production in the last three months was a "low point" for the group but he would not be drawn on whether the increase in planned divestments would hit future production.

BP has already sold sites in the US, Egypt, Venezuela, Vietnam and Colombia.

BP said it intends to boost the amount of cash it generates by 50% by 2014 through new exploration projects and after it ceases payments to its $20bn (£12.5bn) Gulf of Mexico trust fund a year ahead of schedule at the end of 2012.

Mr Dudley denied the the group was building up its cash reserves in case of a possible adverse outcome in next year's trial over the Gulf disaster. He said the group was preparing "vigorously" for the case.

The American, who has come under pressure following the collapse of a deal with Russian group Rosneft to explore in the Arctic region, said the group intends to double its spending on new exploration.

The increased investment was based on assumptions of an oil price of $100 per barrel, while new exploration could include up to seven drilling rigs in the Gulf of Mexico, where the group recently restarted operations.

BP has endured a torrid time since the Deepwater Horizon accident in the Gulf, which saw 11 oil rig workers killed and caused the biggest oil spillage in US history.

It has already set aside $41bn (£25.6bn) for the clean-up and other possible associated costs.

However, payments into the trust fund, set up after former chief executive Tony Hayward was brought to task by President Barack Obama, will be completed early following a recent $4bn (£2.5bn) settlement with Macondo well partner Anadarko.

Mr Dudley has struggled to restore BP's reputation after the incident and ran into fierce criticism himself following the failure of the share swap and exploration deal with Rosneft.

At 451.2p, the share price is still almost one third below the level before the Gulf tragedy, though some analysts said today's figures suggested hope for the future and shares rose 3% as the performance was widely better-than-expected.

Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said: "The real possibility that BP is at an inflection point has bolstered the shares in early trade."

But Tony Shepard, analyst at broker Charles Stanley, added that the Gulf of Mexico oil spill continues to be a major issue for the group and the key event will be the Department of Justice ruling on the criminal and civil investigation.

This outcome will determine the issue of negligence and the level of potential fines for BP, he added.

PA

Suggested Topics
News
Russell Brand was in typically combative form during his promotional interview with Newsnight's Evan Davis
peopleReports that Brand could stand for Mayor on an 'anti-politics' ticket
News
The clocks go forward an hour at 1am on Sunday 30 March
news
Arts and Entertainment
The Doctor finds himself in a forest version of London in Doctor Who episode 'In the Forest of the Night'
TVReview: Is the Doctor ever going stop frowning? Apparently not.
News
Voluminous silk drawers were worn by Queen Victoria
newsThe silk underwear is part of a growing trade in celebrity smalls
PROMOTED VIDEO
Sport
footballMatch report: Real fight back to ruin Argentinian's debut
News
Candidates with surnames that start with an A have an electoral advantage
newsVoters are biased towards names with letters near start of alphabet
Arts and Entertainment
Isis with Lord Grantham (Hugh Bonneville)
TV
Arts and Entertainment
Jay James
TVReview: Performances were stale and cheesier than a chunk of Blue Stilton left out for a month
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Compensation and Benefits Manager - Brentwood - Circa £60,000

£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...

Data Analyst/Planning and Performance – Surrey – Up to £35k

£30000 - £35000 Per Annum plus excellent benefits: Clearwater People Solutions...

IT Systems Business Analyst - Watford - £28k + bonus + benefits

£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

Wilko Johnson, now the bad news

Former Dr Feelgood splits with manager after police investigate assault claims
Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

Mark Udall: The Democrat Senator with a fight on his hands

The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
New discoveries show more contact between far-flung prehistoric humans than had been thought

New discoveries show more contact between far-flung prehistoric humans than had been thought

Evidence found of contact between Easter Islanders and South America
Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

Cerys Matthews on Dylan Thomas

The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
DIY is not fun and we've finally realised this as a nation

Homebase closures: 'DIY is not fun'

Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

Air New Zealand's wizard in-flight video

The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

Pumpkin spice is the flavour of the month

The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
11 best sonic skincare brushes

11 best sonic skincare brushes

Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

Paul Scholes column

I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

While other sports are stalked by corruption, we are an easy target for the critics
Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?