BP annual profit soars to $9.4bn on surging oil prices

BP said its full-year production of oil and gas grew 2.4 percent to 3.7 million barrels per day. (AFP)
Updated 05 February 2019
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BP annual profit soars to $9.4bn on surging oil prices

  • Profit after tax rocketed from $3.4 billion in 2017
  • Fourth-quarter net profit stood at $766 million

LONDON: BP almost trebled its annual net profit to $9.4 billion (€8.2 billion) last year as oil prices soared in 2018, the British energy giant announced Tuesday.
Profit after tax rocketed from $3.4 billion in 2017, “primarily affected by higher oil prices and favorable foreign exchange” rates, BP said in a statement.
Fourth-quarter net profit stood at $766 million, up from $27 million in the final three months of 2017.
However, it was well down on 2018 third-quarter net profit of $3.35 billion, which was fueled by surging oil prices before they cooled approaching the new year.
BP chief executive Bob Dudley said the group was benefitting also from “capital discipline.”
“And we’re doing this while growing the business — bringing more high-quality projects online, expanding marketing in the downstream and doing transformative deals such as BHP,” he added in the statement.
In 2018, the world’s biggest miner BHP sold its US shale oil and gas operations to BP for $10.5 billion.
Oil prices meanwhile surged in the latter part of 2018 on tight supply concerns but have since fallen back sharply, in line with volatility seen across financial markets.
BP on Tuesday added that its full-year production of oil and gas grew 2.4 percent to 3.7 million barrels per day.
It said that 2019 output was expected to be higher thanks to major production projects.
“The actual reported outcome will depend on the exact timing of project start-ups, acquisition and divestment activities, OPEC quotas and entitlement impacts in our production-sharing agreements,” BP said.
Also last year, BP took a further hit of $3.2 billion in financial costs linked to a deadly explosion on a BP-leased drilling rig in 2010 that unleashed the worst environmental disaster in US history.
It expects a further charge of $2.0 billion this year, taking BP’s total bill so far for the Gulf of Mexico catastrophe to around $70 billion.
“Numbers from BP paint a picture of a company operating above expectations across all of its businesses,” noted Michael Hewson, chief market analyst at CMC Markets UK.
“The decline in oil prices in the fourth quarter, from four-year peaks of $85 a barrel saw profits decline slightly from the lofty levels” in the previous quarter, he added.
BP rival Royal Dutch Shell last week posted an 80 percent increase in annual net profit to $23.4 billion on higher oil prices and big cost cutting.
“Global oil majors are performing strongly at present, but these numbers from BP are superlative,” said Richard Hunter, head of markets at Interactive Investor.
“The Gulf of Mexico spill surprisingly still gets a mention ... although the figure is beginning at last to dwindle.”


India suspends Kashmir border trade with Pakistan

Updated 19 April 2019
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India suspends Kashmir border trade with Pakistan

  • Kashmir has been on edge since a February suicide attack that killed 40 Indian paramilitaries
  • India said it had reports that trade on the border was being “misused by Pakistan-based elements for funnelling illegal weapons, narcotics and fake currency”

NEW DELHI: India has suspended trade across its disputed Kashmir border with Pakistan, alleging that weapons and drugs are being smuggled across the route, as tensions simmer between the nuclear-armed neighbors.
Kashmir has been on edge since a February suicide attack that killed 40 Indian paramilitaries and brought the two countries to the brink of war with cross-border air strikes.
On Thursday, India’s government, which is in the middle of a tough national election, said it had reports that trade on the border was being “misused by Pakistan-based elements for funnelling illegal weapons, narcotics and fake currency.”
It also said many of those trading across the Line of Control, which divides Kashmir into zones under Indian and Pakistani control, had links to militant organizations.
The home ministry said trade would be suspended until a stricter inspection mechanism is in place.
The cross-border trade is based on a barter system, with traders exchanging goods including chillies, cumin, mango and dried fruit.
It began in 2008 as a way to improve strained relations between New Delhi and Islamabad, who have fought two of their three wars over the disputed region.
The Indian Express newspaper said Friday that 35 trucks carrying fruit traveling from the Indian side of the border had been stopped after the government order.
Trade on the border has been suspended before, including in 2015, when India accused a Pakistani driver of drug trafficking.
The latest move comes after India withdrew “Most Favoured Nation Status” — covering trade links — from Pakistan after the February attack, which was claimed by the Pakistan-based Jaish-e-Mohammed Islamist group.
Islamabad has denied any involvement in the attack.
India’s Hindu nationalist Prime Minister Narendra Modi has made national security a key plank of his re-election campaign, pointing to the recent flare-up of violence as he battles the center-left opposition Congress party.
He is seeking a second term from the country’s 900 million voters in the mammoth election which kicked off on April 11 and runs till May 19. The results will be out on May 23.