BP logs soaring first-quarter profits

BP logs soaring first-quarter profits

The move came after the London-based company reported its best quarterly profit since mid-2014, boosted by higher oil prices and rising production.

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. This tops their initial prediction of $2.2 billion according to to a company-provided analytics survey.

Underlying replacement cost profit* for the first quarter of 2018 was $2.6 billion, compared with $1.5 billion for the same period in 2017, a rise of 71%.

The spill payment in the first quarter was "US$500 million more than I expected", although that probably means that the burden will be lower later this year, said Redburn analyst Rob West. "Cash flow was good but messy, with less cash tax paid than expected".

"We have delivered another strong set of results", said chief executive Bob Dudley.

The London-based company reported net income of $2.47 billion, up from $1.45 billion in the same period past year.

Though BP has worked through almost all of the 390,000 legal claims stemming from the 2010 explosion, the bill for its remaining claims unexpectedly jumped late previous year.

More news: Dominican Republic establishes ties with China in blow to Taiwan

In the first three months of 2018, however, BP's debt rose to $40 billion due to the settlement of more lawsuits over the deadly 2010 Deepwater Horizon spill in the Gulf of Mexico which has cost it more than $65 billion.

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's results follow a mixed picture from the sector with Royal Dutch Shell RDSa.L and Exxon Mobil XOM.N falling short of forecasts while results from Chevron CVX.N and France's Total TOTF.PA were stronger than expected.

Around US$120mln was spent on share buybacks, and the oiler maintained its first-quarter dividend at 10 cents per share. Gilvary also raised the prospect of increasing dividends.

"It's not only about the oil price, it is also about the performance of the kit", Gilvary said.

BP's gearing, the ratio between debt and BP's market value, stood at 28.1 percent at the end of the quarter, up from 27.4 percent at the end of 2017. Payments are expected to be just over US$3 billion in 2018, weighted to the first half of the year.

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