BP more than doubled its profits in the third quarter as rising oil prices boosted the energy giant’s bottom line.
Revenue jumped by $20bn to $80.8bn (£63bn) compared to the same period last year, helped by the price of Brent crude which is up from $66 a barrel in January to $77 this week due to limited supply in some of the big oil producing countries.
That has squeezed British businesses and motorists, who have endured weeks of rising prices at the pumps.
But it has been a boon for BP whose shares lifted 3.8 per cent on Tuesday morning. Underlying profit rose to $3.8bn over the three-month period, up from $1.86bn in the same quarter last year.
The London-headquartered oil major pressed ahead with a deal to buy the US shale assets from mining and commodities giant BHP Billiton, despite concerns about the heavy environmental toll inflicted by fracking. BP said it expected to complete the $10.5bn acquisition this week.
BP is still paying out for the Deepwater Horizon disaster – the most destructive marine oil spill ever – with after-tax costs of $500m this quarter.
The April 2010 explosion on a rig in the Gulf of Mexico killed 11 people and resulted in a record $18.7bn environmental fine from US authorities. BP said it expected payments relating to the disaster this financial year to be around $3bn.
Chief executive Bob Dudley said: “Our focus on safe and reliable operations and delivering our strategy is driving strong earnings and growing cash flow.
“Operations are running well across BP and we’re bringing new, higher-margin barrels into production faster through efficient project execution.”
Mr Dudley said the shale acquisition would transform BP’s position in the US and “create significant value” for the firm. He added: “This progress all underpins our commitment to growing distributions for our shareholders.”
BP averaged 3.6 million barrels of oil per day over the quarter.
Nicholas Hyett, equity analyst at Hargreaves Lansdown said: “Growth in renewable energy and the introduction of electric cars may be long-term worries for investors.
“But as profits gush and cash flows, the here and now looks pretty rosy for BP.”
However, oil prices slipped on Tuesday as concerns grew that a trade dispute between the US and China could hurt economic growth.
And signs point to global supply increasing, despite US sanctions against Iran, the world’s fifth-largest oil producer.
Brent crude was down 15 cents a barrel at $77.19 on Wednesday morning while US light was unchanged at $67.04.
