BP’s profits more than doubled in 2017 to $6.2 billion powered by higher prices and output of oil and gas, allowing the company to resume share buybacks as it recovers from a three-year downturn, Chief Financial Officer Brian Gilvary told Reuters,.
The company will be able to generate profits in 2018 at an oil price of $50 a barrel, he said, as years of spending cuts kicked in and as it slowly shakes off a $65 billion bill for penalties and clean up costs of the deadly 2010 Deepwater Horizon spill.
Full-year production rose 12 percent to 2.47 million barrels per day (bpd) after BP launched 7 new oil and gas fields in 2017, a record year.
BP’s refining and trading segment, known as downstream, saw profits rise to $7 billion in 2017 as earnings for the marketing division rose by more than 10 percent.
Cash flow in the fourth quarter rose slightly to $6.2 billion but fell short of market expectations, raising concerns that cost cuts have run their course, echoing concerns about rivals Royal Dutch Shell, Exxon Mobil and Chevron which reported last week.
BP reported a $2.1 billion fourth-quarter underlying replacement cost profit, the company’s definition of net income, topping forecasts for $1.9 billion, a company-provided survey of analysts showed.
BP’s full year capital spending reached $16.5 billion, within the annual range of $15-$17 billion it plans to maintain until 2021.
Despite the strong start to oil prices, which reached a three-year high in January, Gilvary said he expected prices to come down to $50-$55 a barrel by the end of this year.