BP Q2 Income Stable Despite Price Slump
BP reported stable profits in the second quarter, with both upstream and downstream segments performing well despite testing market conditions.
The UK major achieved an underlying replacement cost (RC) profit of $2.81bn for April through June, it said on July 30, slightly down on the $2.82bn income it booked a year earlier. Revenues dipped to $72.7bn, from $75.4bn in the second quarter of 2018, largely because of lower oil prices.
In its report, however, BP said the performance at both its exploration and production and refining and processing operations was “solid”. The company’s upstream earned $3.41bn in RC income prior to interest and tax in the second quarter, down from $3.51bn a year earlier, while its downstream generated $1.37bn, down from $1.46bn.
It booked an additional $638mn of RC profit from its 19.75% stake in Russia’s Rosneft.
“At the midpoint of our five-year plan, BP is right on target,” CEO Bob Dudley said in a statement. “Reliable performance and disciplined growth across our businesses are delivering strong earnings, cash flow and returns to shareholders.”
BP unveiled its latest five-year plan in 2017, which called for increased free cash flow, continued focus on cost control and growth in upstream production.
Excluding payments for the Gulf of Mexico oil spill, BP reported $8.2bn in operating cash flow in April to June, up from $7bn a year earlier.
Oil and gas production climbed 4.2% yr/yr in the first half, arriving at 2.64mn boe/day. This included 1.3mn boe/day of oil and gas condensate output and 7.78bn ft3/day of natural gas, up 2.6% and 5.8% respectively. The financial impact of these gains was offset by a 6.3% yr/yr dip in BP's realised price for hydrocarbons, however. It has launched, or is a partner in, a number of major gas projects in the last few years, where producion has been growing.
BP performed better in the latest quarter than its French rival Total, which reported a decline in adjusted operating profit by a quarter yr/yr in results published last week, owing to weak gas prices. Other majors are set to announce their earnings for the three-month period in the coming days, including Anglo-Dutch Shell on August 1 and the US majors ExxonMobil and Chevron on August 2.