BP profit surges as oil major leaves downturn behind

Logo of BP is seen at a petrol station in Kloten

The oil giant posted fourth-quarter underlying replacement cost profit, used as a proxy for net profit, of $2.1 billion, beating analysts' projections of $1.9 billion.

The company's upstream business, comprising exploration and production, saw output leap 12 percent to 2.47 million barrels of oil equivalent per day - the highest level since the year of the Gulf of Mexico oil spill disaster.

"The company is operating and firing on all cylinders", Chief Executive Officer Bob Dudley said in an interview with Bloomberg television. And we did all this while maintaining safe and reliable operations.

Operating cash flow for FY 2017, excluding Gulf of Mexico oil spill payments, was $24.1B vs. $17.6B in 2016; Gulf of Mexico oil spill payments totaled $5.2B vs. $6.9B a year ago. Upstream production, excluding BP's share of Rosneft production, was 12 percent higher than 2016, the highest since 2010. "We are entering the second year of our five-year plan with a real impetus, more and more confident that we can continue to grow", added he.

BP said production fuel volumes in Downstream for 2017 were 6% higher year-on-year, with fuels marketing earnings rising more than 10% in 2017 on the year before.

"It is important for us, there is no doubt we will increase investments", Dudley, himself a USA citizen, said in an analyst call after BP reported a surge in profits in 2017.

For the full year, production costs fell 16 percent to $7.11 per barrel.

"We have been in growth mode" with the largest commissioning of projects in the company's history, Dudley says; BP pumped 2.58M bbl/day in the quarter, up 18% Y/Y, helped by the start of seven new projects. It does expect long-term earnings to benefit from the reduction in USA federal corporate tax to 21% from 35%.

The BP is the first major European oil and gas company to resume share buybacks after a three-year hiatus, announcing plans to buy back shares for 1.6 billion Dollars per year to offset the dwindling effect of a dividend program where shareholders can choose whether to receive their dividends through cash or equity.

BP maintained its fourth-quarter dividend at USD0.10 per share, the same as past year.

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