BP reports very strong earnings

BP reports very strong earnings

BP reports very strong earnings

Oil and gas output rose following the startup of seven new projects last year, helping the London-based giant post a fivefold increase in fourth-quarter profit from a year earlier to the highest since the start of 2015.

Downstream earnings were very strong, with an underlying replacement cost profit of $7.0 billion, 24 percent higher than 2016.

BP had also guided at the start of January that it would be including a USD1.50 billion charge related to USA tax reform against 2017's fourth quarter, and the company said Tuesday it had included a charge of USD900.0 million in fourth quarter results, down from guidance.

Chief executive Bob Dudley hailed today's result "as one of the strongest years in BP's recent history".

The London-listed company saw one of the strongest output increases in its history previous year, lifting production to levels not seen since the 2010 Deepwater Horizon spill. Gulf of Mexico oil spill payments in 2017 were $5.2 billion, compared with $6.9 billion in 2016. "And we did all this while maintaining safe and reliable operations", the CEO said.

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BP Plc (LON:BP) has boasted of "strong delivery and growth" in the fourth quarter of 2017, highlighted by improved upstream production and underlying profit, meanwhile, a further US$1.7bn charge associated with the Gulf of Mexico meant the group reported only a small profit.

Looking further ahead, the company said in mid-January it would be expecting 2018 payments of around USD3.0 billion related to the oil spill and said that settlements would soon begin "winding down". Cash flow in the fourth quarter rose slightly to $6.2bn but fell short of market expectations, raising concerns that cost cuts have run their course, echoing concerns about rivals Royal Dutch Shell, Exxon Mobil and Chevron which reported last week.

In the fourth quarter of 2017, the company bought back shares worth 343 million United States dollars.

BP also took a one-off charge of $900m to adjust to new U.S. tax rules, although it expected a long-term boost from the lowered corporate tax rates.

BP began share buybacks in the fourth quarter, spending $343 million, fully offsetting the dilution from scrip dividends issued in the third quarter.

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