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BP net profit quadruples as Mideast war lifts oil prices / Photo: © AFP
BP net profit quadruples as Mideast war lifts oil prices
British energy giant BP said Friday that its net profit quadrupled in the third quarter as the Middle East war disrupted oil and gas supplies and sent prices surging.
Profit after tax jumped to $4.70 billion in the July-September period from $1.16 billion in the third quarter of last year, BP said in a statement.
Chief executive Meg O'Neill welcomed "a strong set of results, supported by the higher-price, higher-margin environment", that mirrored big profits across the sector.
Along with rivals, BP's third quarter benefited from strong refining margins, which reflect the spread between the price of crude oil and the fuels derived from it.
US energy majors Chevron and ExxonMobil publish their third quarter earnings on Friday and are expected also to reveal big boosts from surging fossil fuel prices.
Production and exports of refined products in the Middle East remain heavily disrupted, meaning refineries unaffected by the conflict can benefit from tighter global supplies.
"These are dynamic times with volatility and disruption to trade flows continuing to define energy markets," said O'Neill, who became CEO in April following what she has since described as underperformance by the group.
Speaking of the third quarter, she said "refineries have been running close to capacity to make up for shortfalls" in supplies.
BP's net debt was $13.87 billion in the latest reporting period, down from $22.25 billion in the second quarter, and the company said it had met its cost-reduction targets.
- Oil and gas pivot -
BP, whose performance has generally fallen behind that of its rivals in recent years, had slashed clean energy investments ahead of O'Neill's appointment as the group pivots back to its more profitable oil and gas business.
Shares in the company rose 0.2 percent in morning deals on the London Stock Exchange, and oil prices climbed.
BP's earnings results follow bumper profits announced by Britain's Shell and France's TotalEnergies on Thursday.
Shell and TotalEnergies used the surge in profits to lift payouts to shareholders, but BP suspended its share buyback programme in February.
"While its peer group has been busily returning cash to shareholders through enhanced dividends and buybacks, BP is focusing on getting its house in order debt-wise," said AJ Bell investment director Russ Mould.
"This prudent fixing of the roof while the sun is shining could put BP on stronger long-term foundations," he added.
O'Neill will set out a new strategy for the company in December, with a focus on slashing debt and cutting costs.
"Our goal is to be a resilient business that delivers strong performance in all price environments," she said Friday.
Its refining margin rose to $46.70 per barrel in the third quarter, compared with $29.60 per barrel in the April-June period.
BP faced a shareholder backlash at its annual meeting in April, with investors rejecting a resolution that would have reduced its climate reporting requirements.
"We must break our dependency on expensive oil and gas, whose prices yo-yo with every global shock," Friends of the Earth climate campaigner Danny Gross said Friday.
"Instead, we should invest in energy efficiency and homegrown renewable power," he said.
On the governance front, BP in September made Ian Tyler its permanent chairman after he stepped into the role following the sudden removal of Albert Manifold over alleged governance concerns, which he has denied.
ajb/bcp/js
V.Mitchell--SFF
