BP profits better than expected amid soaring energy prices


    oaring oil and gas prices helped BP notch up a better-than-expected profit haul in the third quarter as the global economic recovery sends energy costs racing higher.

    The oil giant said underlying replacement cost profits jumped to 3.3 billion US dollars (£2.4 billion) in the three months to September 30, up from 86 million US dollars (£63 million) a year earlier when oil prices had slumped due to the pandemic.

    Its third-quarter profits also mark a steep rise on the previous three months, when it notched up profits of 2.8 billion US dollars (£2 billion).

    It unveiled another 1.25 billion US dollars (£915 million) of share buybacks, which it said will be completed before its full-year results announcement.

    But, on a reported basis, BP tumbled to a 2.9 billion US dollar (£2.1 billion) quarterly loss as it booked a 6.1 billion US dollar (£4.5 billion) hit from the accounting treatment of soaring forward gas prices.

    The oil giant’s replacement cost loss compares with losses of 644 million US dollars (£471 million) a year earlier, with the group blaming an accounting “mismatch”.

    It said this is set to unwind if prices decline and as liquefied natural gas cargoes are delivered.

    BP chief executive Bernard Looney said: “This has been another good quarter for BP – our businesses are generating strong underlying earnings and cash flow while maintaining their focus on safe and reliable operations.

    “Rising commodity prices certainly helped, but I am most pleased that, quarter by quarter, we’re doing what we said we would – delivering significant cash to strengthen our finances, grow distributions to shareholders and invest in our strategic transformation.”

    The prices of crude and gas have rocketed amid surging demand as the global economy hasrebounded from the early days of the pandemic, while oil cartel Opec has increased production slowly after deep cuts made last year as the crisis struck.

    BP and FTSE 100 Index rival Royal Dutch Shell have both enjoyed a boost to profits and delivered cheer to investors by increasing dividends and buying back shares.

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