• 2 hours Shell Oil Trading Head Steps Down After 29 Years
  • 6 hours Higher Oil Prices Reduce North American Oil Bankruptcies
  • 8 hours Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 10 hours $1.6 Billion Canadian-US Hydropower Project Approved
  • 11 hours Venezuela Officially In Default
  • 13 hours Iran Prepares To Export LNG To Boost Trade Relations
  • 15 hours Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 21 hours Saudi Oil Minister: Markets Will Not Rebalance By March
  • 1 day Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 1 day Rosneft Announces Completion Of World’s Longest Well
  • 1 day Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 2 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 2 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 2 days Santos Admits It Rejected $7.2B Takeover Bid
  • 2 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 2 days Africa’s Richest Woman Fired From Sonangol
  • 2 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 2 days Russian Hackers Target British Energy Industry
  • 2 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 3 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 3 days Lower Oil Prices Benefit European Refiners
  • 3 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 3 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 3 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 3 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
  • 4 days Shell: Four Oil Platforms Shut In Gulf Of Mexico After Fire
  • 4 days OPEC To Recruit New Members To Fight Market Imbalance
  • 4 days Green Groups Want Norway’s Arctic Oil Drilling Licenses Canceled
  • 4 days Venezuelan Oil Output Drops To Lowest In 28 Years
  • 4 days Shale Production Rises By 80,000 BPD In Latest EIA Forecasts
  • 4 days GE Considers Selling Baker Hughes Assets
  • 4 days Eni To Address Barents Sea Regulatory Breaches By Dec 11
  • 4 days Saudi Aramco To Invest $300 Billion In Upstream Projects
  • 4 days Aramco To List Shares In Hong Kong ‘For Sure’
  • 5 days BP CEO Sees Venezuela As Oil’s Wildcard
  • 5 days Iran Denies Involvement In Bahrain Oil Pipeline Blast
  • 7 days The Oil Rig Drilling 10 Miles Under The Sea
  • 7 days Baghdad Agrees To Ship Kirkuk Oil To Iran
  • 7 days Another Group Joins Niger Delta Avengers’ Ceasefire Boycott
  • 7 days Italy Looks To Phase Out Coal-Fired Electricity By 2025
Alt Text

“End Of Oil” Narratives Are Misleading

While the world makes dramatic…

Alt Text

Does The U.S. Lead The World In Carbon Emissions Reduction?

EPA Administrator Scott Pruitt recently…

Alt Text

600,000 Bpd At Risk As Venezuela Delays The Inevitable

Venezuela has once again avoided…

BP Proves Analysts Wrong With Better Than Expected Earnings Report

BP Proves Analysts Wrong With Better Than Expected Earnings Report

 Due mostly to the low price of oil, BP’s adjusted earnings for the first quarter of 2015 dropped to $2.58 billion, down by nearly 20 percent from the same period a year earlier, but a 15 percent improvement over the fourth quarter of 2014.

Despite the loss, the British oil giant’s earnings exceeded the expectations of industry analysts, who had forecast earnings of $1.28 billion.

In fact, BP made a $2.2 billion profit from its refining, compared with $1 billion a year earlier. The bad news was that profits from upstream operations – oil extraction – fell sharply from $4.4 billion in the first quarter of last year to $604 million in the same period of 2015. This was partly because the company canceled two deep-water projects in the Gulf of Mexico, at a cost of $545 million. Related: How Much Does OPEC Really Earn?

Refining is one area where lower oil prices can benefit energy companies. In BP’s case, income from refining improved, at least in part, because the company recently sold some of its less profitable plants and concentrated on more efficient facilities. As a result, its profit margins on refining grew because the company pays less for the crude before it is refined.

Still, this wasn’t a strong earnings report for BP, Anish Kapadia, an energy analyst at the Houston investment bank Tudor, Pickering, Holt & Co. told Reuters. “Earnings look very strong thanks to the downstream [such as refining], but underlying earnings in upstream [oil production] and the overall cash flow were extremely weak,” he said.

Despite the mixed results, CEO Bob Dudley said the company would maintain a dividend of 10 cents a share. “The dividend is the first priority within our financial framework,” he said in a statement, “...and the board is committed to maintaining it, as we have today.” Related: Former BP Chief Sees Oil Price Rebound Soon

For that reason and because BP’s earnings exceeded analysts’ forecasts, the company’s shares immediately rose by about 1.5 percent in morning trading on London exchanges.

Like many large oil companies contending with the low price of oil, BP has been cutting capital expenditures and selling off some assets to keep its costs in line and raise money. BP in particular is coping not only with dramatically low oil prices but also the costs associated with the 2010 Deepwater Horizon spill in the Gulf of Mexico. Related: How The Majors Are Playing The Oil Price Slump

Most recently, BP announced last week that it would be selling its 36.22 percent stake in the Central Area Transmission System, one of the UK’s biggest pipelines, for $486 million. This sale is one of several in a program to raise $10 billion in cash, and Dudley said it won’t be the last.

“We are resetting and rebalancing BP to meet the challenges of a possible period of sustained lower prices. Our results today reflect both this weaker environment and the actions we are taking in response,” Dudley’s statement said.

“We are continuing to progress our planned divestment program, we are resetting our level of capital spending,” Dudley said, “and we are addressing costs through focusing on simplification and efficiency throughout BP.”

By Andy Tully of Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News