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    Aker BP Reports $151mn Pre-Tax Profit in Q2


The Norwegian producer reversed $136mn of impairment charges as a result of recovering oil prices.

by: Joseph Murphy

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Aker BP Reports $151mn Pre-Tax Profit in Q2

Norway's Aker BP achieved $151mn in pre-tax profits in the second quarter, compared with a $414mn loss in the first quarter, thanks to higher production and the reversal of impairment charges, it said on July 14. The company recorded a pre-tax income of $249mn in the second quarter of 2019.

The company, owned by BP and Norwegian investment firm Aker, produced a record 209,800 boe/d in the three-month period, up from only 127,300 boe/d in the same period of last year. Driving this growth was the Johan Sverdrup oilfield, which came on stream last autumn and is now pumping 470,000 b/d of oil. Aker BP has a 11.6% stake in the project.

Aker BP's first-quarter loss was the result of $654mn of impairments, due to the oil price collapse. But recovering prices meant the company reversed $136mn of these charges in the second quarter.

The company has also eased spending cuts announced in March. It has revived the Hod oilfield redevelopment project, previously put on hold, in response to Norway introducing kroner 100bn ($10.6bn) in tax relief for the oil industry. This decision added $150mn to Aker BP's capital spending plan for 2020, bringing the total to $1.35bn.

The company's full-year production guidance remains unchanged at 205,000-220,000 boe/d.