LONDON: BP has not taken any of its oil tankers through the Strait of Hormuz since a July 10 attempt by Iran to seize one of its vessels, the British company’s Chief Financial Officer Brian Gilvary said on Tuesday.
The oil and gas company has no current plans to take any of its own vessels through the strait, Gilvary said, adding that BP is shipping oil out of the region using chartered tankers.
“We will continue to make shipments through there but you won't see any BP-flagged tankers going through in the short term,” he said.
Gilvary was speaking as the company reported better than expected second-quarter earnings due to a strong increase in oil and gas production.
Tensions spiked between Iran and Britain this month when Iranian commandos seized a British-flagged tanker in the Strait of Hormuz, the world’s most important waterway for oil shipments.
That came two weeks after British forces captured an Iranian oil tanker near Gibraltar suspected of violating EU sanctions on Syria.
Earlier this month, three Iranian vessels tried to block the passage of a BP-operated tanker through the Strait of Hormuz but withdrew after warnings from a British warship.
Washington, which has by far the strongest Western naval contingent in the Gulf, on July 9 proposed stepping up efforts to safeguard the Strait of Hormuz.
The strong increase in oil and gas production helped BP to offset weaker crude prices and refining profit to beat second-quarter profit expectations on Tuesday, lifting its shares.
BP's result contrasts with Total and Norway's Equinor, which both reported sharp earning drops, and builds on a steady recovery following deep cost cuts since the 2014 downturn, project start-ups and last year's $10.5 billion acquisition of BHP's U.S. shale assets.
Shares in BP were up 3 percent in early London trade, compared with a 0.1 percent gain in the broader FTSE index. BP and rival Royal Dutch Shell kept the blue-chip index in positive territory.
“At the midpoint of our five-year plan, BP is right on target,” Chief Executive Bob Dudley said in a statement.
BP’s underlying replacement cost profit, the company’s definition of net income, reached $2.8 billion in the second quarter, exceeding a company-provided forecast of $2.46 billion.
The second-quarter profitwas up from $2.4 billion in the previous quarter.
The results beat expectations for 10 quarters in a row, analysts at Bernstein said.
“Strong volume growth from accretive barrels and seamless execution remains underappreciated,” said Bernstein, which has an “outperform” recommendation on the stock.
The company's operating cash flow recovered to $6.8 billion in the quarter from $5.3 billion inthe previous quarter as a result of a one-off working capital release.
BP’s dividend remained unchanged at 10.25 cents per share.
Gilvary said the company would consider raising the dividend towards the end of the year as proceeds from asset sales come through and debt is reduced.
Second-quarter production rose to 3.8 million barrels of oil equivalent per day, 4 percent higher than a year earlier.
BP said it expects third-quarter 2019 reported production to be less than second-quarter, reflecting maintenance activities and the impact of Hurricane Barry on operations in the Gulf of Mexico.