BP says Q1 net profits triple to $16.86 billion despite falling output
British energy giant BP said Tuesday that net profits almost tripled in the first quarter of 2013, boosted by the sale of its stake in Russian joint venture TNK-BP, despite falling oil and gas output.
Earnings after taxation surged to $16.86 billion (12.87 billion euros) in the three months to the end of March, compared with $5.77 billion in the same period of 2012, BP said in a results statement.
“These strong first-quarter results demonstrate the progress BP is making … and underpin our commitment to material operating cash flow growth by 2014,” said chief executive Bob Dudley in the earnings release.
“The early completion of the sale of our interest in TNK-BP has also allowed us to begin a share buy-back programme which we expect to return up to $8.0 billion to our shareholders and reflects the reduction in BP’s asset base following our divestment programme over the past three years.”
The energy major expects that the share buyback programme will take place over the next 12-18 months.
BP added that its replacement cost profit — an industry measure which strips out changes in the value of energy inventories as well as one-off gains or losses — surged to $16.60 billion in the first quarter, from $4.78 billion last time around.
BP, seeking to reposition itself after the devastating Gulf of Mexico oil spill disaster in 2010, had agreed last year to a massive strategic deal with the main Russian oil producer Rosneft.
First-quarter profits were boosted by the sale, which completed last month for a total consideration of $27.5 billion in cash and Rosneft shares.
As a result of the blockbuster deal, BP now holds a 19.75-percent stake in Rosneft.
BP said it booked a gain of $15.5 billion on the sale, of which $12.5 billion was recognised in the first quarter.
Excluding the proceeds of the TNK-BP divestment and other one-off gains, underlying replacement cost profit sank 9.4 percent to $4.215 billion.
However, that beat market expectations of $3.25 billion according to analysts polled by Dow Jones Newswires.
Total gas and oil output, excluding TNK-BP and Rosneft, fell five percent to 2.330 million barrels of oil equivalent per day, mostly due to asset sales.
The upbeat first-quarter performance comes three years after a deadly explosion on a BP-leased drilling rig unleashed the worst environmental disaster in US history.
BP said Tuesday that the cost of the US Deepwater Horizon oil spill disaster remained at $42.2 billion.
The group has so far agreed to sell $38 billion worth of assets by the end of 2013 to help pay for cleaning up and for compensation after the disaster.