FILE PHOTO – Spectators are seen reflected in a British Petroleum sponsors building in Olympic Park at the London 2012 Paralympic Games September 6, 2012. REUTERS/Toby Melville/File Photo
LONDON (Reuters) – BP’s (BP.L) second quarter profits easily beat expectations as a strong increase in oil and gas production helped offset weaker crude prices.
The strong results build on a steady recovery in BP’s recovery following deep cost cuts since the 2014 downturn, a string of project start-ups in recent years and the $10.5 billion acquisition of BHP’s U.S. shale assets late last year.
“At the midpoint of our five-year plan, BP is right on target,” Chief Executive Officer Bob Dudley said in a statement.
BP’s underlying replacement cost profit, the company’s definition of net income, reached $2.8 billion in the second quarter, exceeding a company-provided forecast of $2.46 billion.
The second quarter profits were up from $2.4 billion in the previous quarter.
Second-quarter production rose to 3.8 million barrels of oil equivalent per day, 4% higher than a year earlier.
BP said it expects third-quarter 2019 reported production to be lower than second-quarter, reflecting maintenance activities as well as the impact of Hurricane Barry on operations in the US Gulf of Mexico.
French rival Total (TOTF.PA) last week reported a 19% drop in second-quarter net profit to $2.9 billion, while announcing plans to sell $5 billion of assets to boost shareholder returns.
Benchmark Brent crude oil prices in the second quarter averaged at around $69 a barrel, up from $63 the previous quarter but down from $74 a barrel a year earlier, according to BP.
Reporting by Noor Zainab Hussain in Bengaluru; Editing by Saumyadeb Chakrabarty