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Feb, 07 2018

BP’s annual profit surges more than double to $6.2bn

The company was the first among the European peers  to resume share buy-backs in the fourth quarter of 2017 after years of resorting to dilutive austerity measures in the face of the industry slump.

BP’s annual profit surges more than double to $6.2bn

Powered by higher prices and output of oil and gas, BP’s profits more than doubled in 2017 to $6.2 billion, allowing the company to resume share buy-backs as it recovers from a three-year downturn.

Chief Financial Officer Brian Gilvary said, “The company will be able to generate profits in 2018 at an oil price of $50 a barrel, as years of spending cuts kicked in and as it slowly shakes off a $65 billion bill for penalties and clean-up costs of the deadly 2010 Deepwater Horizon spill.”

The company was the first among the European peers  to resume share buy-backs in the fourth quarter of 2017 after years of resorting to dilutive austerity measures in the face of the industry slump.

With a 20 per cent bounce in oil prices in the last quarter of 2017 to $61 a barrel, BP had a surplus of cash that allowed it to buy $343 million worth of shares in the fourth quarter, offsetting the scrip dilution.

At 0824 GMT, BP shares were lower at 1.4 per cent, compared with a 2.3 per cent decline for the sector.

Chief Executive Officer Bob Dudley in a statement said, “2017 was one of the strongest years in BP’s recent history. We enter the second year of our five-year plan with real momentum, increasingly confident that we can continue to deliver growth.”

Though BP expects a long-term boost from the lowered corporate tax rates, it also took a one-off charge of $900 million to adjust to new US tax rules. A company-provided survey of analysts showed that the company reported a $2.1 billion fourth-quarter underlying replacement cost profit, its definition of net income, topping forecasts for $1.9 billion. That marked a jump from $400 million a year earlier and topped a third-quarter profit of $1.9 billion.

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