BP’s 3Q profit dives on low oil prices

British oil company BP reported its third-quarter replacement cost (RC) profit was $1.2 billion, compared with $2.4 billion a year ago. Total revenue was $55.8 billion, versus $94.7 billion a year ago.

Compared with a year earlier, BP said the result primarily showed the impact of sharply lower oil and gas prices but also the benefits of a continuing strong downstream environment and performance and steadily lower cash costs throughout the Group.

Production for the quarter was 2,242mboe/d, 4.4% higher than the third quarter of 2014. Underlying production for the quarter decreased by 2.2%, mainly due to higher seasonal turnaround activity. For the nine months, production was 2,220mboe/d, 4.3% higher than in the same period of 2014. Underlying production for the nine months was flat versus 2014.

Third-quarter production benefited from the absence of seasonal adverse weather in the Gulf of Mexico, BP said. The company expects fourth-quarter 2015 reported production to be slightly higher than the third quarter mainly reflecting recovery from planned seasonal turnaround activity.

BP expects organic capital expenditure will be in the range of $17-19 billion a year through to 2017, closer to $19 billion in 2015. Expectations for 2015 capital expenditure were $24-26 billion a year ago and under $20 billion in the second quarter of 2015.

BP today announced a quarterly dividend of 10 cents per ordinary share, expected to be paid in December.

Bob Dudley said: “Last year, we acted decisively to reset BP for a sustained period of lower oil prices and the results are coming through well. We are now in action to rebalance our financial framework in this new price environment.”

“And I am confident that BP’s strong and well-balanced portfolio of businesses and projects gives us the ability to grow value into the future. All of this underpins our strong priority of sustaining our dividend and then growing free cash flow and shareholder distributions over the long term.”

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