BP logs soaring first-quarter profits

BP plc share price

BP plc share price

Underlying profit was also 23 per cent higher than the previous quarter, marking BP's best results in three years.

But the group continued to count the cost of its 2010 Deepwater Horizon tragedy in the Gulf of Mexico, with another 1.6 billion United States dollars (£1.2 billion) forked out in the first quarter.

BP has had a tougher going than its peers because of the multibillion-dollar bill it was saddled with after the Deepwater Horizon explosion in 2010 and the resulting massive oil spill in the Gulf of Mexico.

BP also paid another $1.6 billion for costs arising from the 2010 Gulf of Mexico oil spill catastrophe, including $1.2 billion for the final payment relating to the 2012 Department of Justice settlement. Payments are expected to be just over $3 billion in 2018, weighted to the first half of the year. The company was forced to take a surprise $1.7 billion charge to net income in the fourth quarter because the cases that did remain were among the largest and most complex. Unadjusted BP posted a replacement cost profit of $2.47 billion, $0.72 per ADS, compared with a profit of $1.41 billion and a net profit per ADS of $0.43 in the first quarter of 2017.

The oil giant said underlying replacement cost profits jumped by 71% to $2.6bn (£1.9bn) for the first three months of 2018. Stripping those out, cash flow reached $7 billion in the quarter, the strongest since 2014.

Bob Dudley, group chief executive at BP, praised "another strong set of results".

Moving through 2018 we're determined to keep delivering our operational targets and maintaining capital discipline while growing cash flow and returns.

"The results definitely benefit from a higher oil price that we've seen come through", Gilvary noted. Royal Dutch Shell Plc generated less cash than analysts forecast in the first quarter and its shares were hammered after Chief Financial Officer Jessica Uhl said the company wasn't yet ready to commence a $25 billion stock repurchase program.

Investors are now hoping for the company to announce its first dividend increase since the third quarter of 2014.

It has so far cost the group more than 65 billion U.S. dollars (£48 billion), and although BP has all the major settlements now under its belt, it still has a few smaller legal bills to pay.

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