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UK oil major BP recorded an increase in its fourth quarter 2017 profit compared to the prior-year period. On an annual basis, BP’s profit more than doubled.
BP’s underlying replacement cost profit, BP’s definition of a net profit, for the fourth quarter 2017 was $2.1 billion compared to $400 million in the fourth quarter 2016.
Underlying RC profit is after adjusting for a net charge for non-operating items of $2.515 billion and net adverse fair value accounting effects of $175 million (both on a post-tax basis). RC loss was $583 million for the fourth quarter, compared with a profit of $72 million for the same period in 2016.
For the full year, underlying replacement cost profit was $6.2 billion, compared with $2.6 billion in 2016.
BP’s profit for the fourth quarter and full year was $27 million and $3.39 billion respectively, compared with $497 million and $115 million for the same periods in 2016.
Bob Dudley, BP chief executive, commented: “2017 was one of the strongest years in BP’s recent history. We delivered operationally and financially, with very strong earnings in the Downstream, Upstream production up 12%, and our finances rebalanced. And we did all this while maintaining safe and reliable operations.
“We enter the second year of our five-year plan with real momentum, increasingly confident that we can continue to deliver growth across our business, improving cash flows and returns for shareholders out to 2021 and beyond.”
Organic capital expenditure for the fourth quarter and full year was $4.6 billion and $16.5 billion respectively, compared with $4.5 billion and $16.7 billion for the same periods in 2016. In 2018, BP expects organic capital expenditure to be in the range of $15-16 billion.
BP’s 2017 oil and gas production, excluding Rosneft, was 12% higher than in 2016, the highest since 2010. Upstream unit production costs were 16% lower, benefiting from production growth and continued cost discipline.
Production for the quarter was 2,581mboe/d, 18.1% higher than the fourth quarter of 2016. Fourth quarter production reflects the fifth consecutive quarter of growth as well as the highest production since first quarter 2011.
BP’s expects full-year 2018 underlying production to be higher than 2017 due to the ramp-up of major projects.
BP expects first-quarter 2018 reported production to be broadly flat with the fourth quarter 2017, reflecting continued growth from the 2017 major project start-ups, offset by the expiration of the Abu Dhabi offshore concession and divestment impacts.