BP profit surges as oil major leaves downturn behind

BP logo is seen at a fuel station of British oil company BP in St. Petersburg

BP logo is seen at a fuel station of British oil company BP in St. Petersburg

The profit of the oil company BP increased more than twice in 2017 to 6.2 billion Dollars due to a significant increase in oil and gas production.

The Zohr natural gas project in Egypt was counted as one of BP's shining achievements a year ago.

There's no guarantee that the cost of the Deepwater Horizon disaster won't rise again, but it will be entirely manageable from cash flow this year and next, Chief Financial Officer Brian Gilvary said by phone.

Dividend per share remains at 10 cents. The results come after the FTSE 100 group, whose performance has been pressured by costs related to the Gulf of Mexico oil spill, became the first European oil and gas major to resume share buybacks past year.

Shares in BP were down 0.9% on Tuesday at a price of 477.50 pence each.

"2017 was one of the strongest years in BP's recent history", said Group Chief Executive Bob Dudley.

The BP CEO said the company is entering the second year of BP's five-year plan with real momentum and is increasingly confident that BP can continue to deliver growth across its business, improving cash flows and returns for shareholders to 2021 and beyond. It discovered some 1bn barrels worth of new discoveries as the exploration division saw successes. Its reserve replacement ratio was estimated at 143% for the year.

Operating cashflow amounted to $6.2bn and $24.1bn for the fourth quarter and the full year respectively.

The weakness was due mostly to lower-than-expected income from refining operations, BMO Capital Markets analyst Brendan Warn said.

The move is a clear sign that the BP is recovering after oil prices collapse and is gradually shake off by the impact of the 56 billion Dollars paid for fines and oil clearing costs since 2010.

BP's earnings also got a boost as seven new projects came on line during the year.

For the full year, production costs per barrel tumbled by 16% to $7.11 (£5.09), with BP's output reaching its highest level since the year of the Gulf of Mexico oil spill.

The British oil and gas giant made an underlying profit of $6.2bn in the 12-month period, a 139% increase on its 2016 figure of $2.6bn.

That marked a jump from $400m a year earlier and topped a third-quarter profit of $1.9bn.

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