BP Q1 profit beats forecasts on record oil, trading
British oil major BP Plc (BP.L: Quote, Profile, Research) beat forecasts on Tuesday with a 48 percent leap in first-quarter profits to $6.6 billion, helped by record oil prices and strong profits from punting energy markets.
The results raised investor hopes Chief Executive Tony Hayward’s restructuring of the world’s third-largest non government-controlled oil company by market capitalization was working effect, pushing BP’s shares up over 4 percent.
“The figures are very good,” Tony Shepard, oil analyst at Charles Stanley said.
The results echo the forecast-beating profits also reported by Royal Dutch Shell Plc (RDSa.L: Quote, Profile, Research) on Tuesday. Double click on nL29466167 for more.
The main driver of BP’s earnings was its core oil and gas production unit, which benefited from oil prices which broke the $100/barrel barrier in the quarter, although output was flat at 3.913 million barrels of oil equivalent per day (boepd) americashadvance.
Output would have risen 5 percent, BP said, if it were not for the production sharing contracts it has with resource-holders, which reduce the amount of oil BP receives from projects when oil prices rise.
BP’s refining and marketing division turned in an unexpected $1.2 billion profit, despite lower crude processing margins and lower throughputs at its refineries.
Many analysts had expected a loss but a strong result from marketing aviation fuel and lubricants helped the company.