BP PLC (LSE:BP.) more than doubled second-quarter profits as higher oil and gas prices and stronger refining margins offset lower production and increased exploration write-offs.
Underlying replacement cost profit rose to $5.7 billion from $2.4 billion a year earlier and $3.2 billion in the first quarter. Reported profit attributable to shareholders increased to $3.9 billion from $1.6 billion.
Operating cash flow climbed 73% year on year to $10.9 billion, despite a $1 billion working capital build. Net debt was cut to $22.3 billion from $25.3 billion at the end of March, slightly exceeding guidance.
The improvement reflected higher commodity prices, stronger fuel margins and significantly better refining margins. The oil trading result was also slightly stronger than in the previous quarter.
However, production declined to 2.2 million barrels of oil equivalent a day from 2.3 million in the first quarter, while upstream plant reliability fell to 92.4% from 95.7%. Refinery throughput also decreased due to planned maintenance and disruptions.
BP announced a 4% increase in its quarterly dividend to 8.66 cents per share.
It also launched a process to sell its North Sea business and its US biogas business, as part of a wider effort to simplify its portfolio and strengthen the balance sheet.
Chief executive Meg O’Neill, delivering her first full-quarter results, acknowledged that BP had "not delivered consistently" and was "not making the most of our potential".
"Our performance over the past few years has not met our own expectations, let alone those of our shareholders. We have not delivered consistently; we have written off too much value; and our costs and liabilities are not resilient enough in a low price environment."
She set out five priorities – debt reduction, portfolio simplification, investment discipline, operational performance and accountability – designed "to deliver a step change in performance and grow shareholder value".
