BP Reports Better Second Quarter 2014 Results

By Joseph R. Fonseca
Tuesday, July 29, 2014
BP

 

BP today announced its financial results for the second quarter of 2014. Underlying replacement cost profit for the quarter of 2014 was $3.6 billion, 34% higher than the $2.7 billion reported for the same period in 2013 and 13% higher than the $3.2 billion result for the first quarter of 2014.

The company also announced a quarterly dividend of 9.75 cents per ordinary share, the same level as the previous quarter but 8.3% higher than a year earlier. As previously announced, BP’s board will review the level of the dividend with the first and third quarter results each year.

“This was another successful quarter, delivering both operational progress and robust cash flow. We are continuing to ramp up the major new projects that drive delivery of cash flow and are also now seeing benefits from our focus on operating with greater reliability and efficiency,” said Bob Dudley, BP group chief executive.

“This operational momentum keeps us well on track to meet our 2014 targets and underpins our longer-term commitment to grow distributions to our shareholders.”

Rising oil and gas production from new and recently-started higher-margin upstream projects and increased processing of heavy crude oil by the newly-modernised Whiting refinery contributed to operating cash flow of $7.9 billion in the quarter. Total operating cash flow for the first half of 2014 was $16.1 billion. 

Divestments with a cumulative value of $3.4 billion have now been agreed towards BP’s expected total of $10 billion divestments agreed by the end of 2015.  Most recently BP agreed the sale of its Hugoton gas assets in Texas for $390 million.

BP plans to use the post-tax proceeds from these divestments predominantly for shareholder distributions, with a bias to share buybacks. In mid-July BP completed the $8 billion share buyback programme introduced following the sale of its interest in TNK-BP, and the divestment programme is now supporting a continuation of buybacks.
 
In the second quarter, BP’s Upstream segment reported $4.7 billion underlying pre-tax replacement cost profit, compared with $4.3 billion a year earlier and $4.4 billion in the first quarter of 2014.

Compared to a year earlier, the Upstream result reflected the benefits of higher production in key regions and higher oil and gas realisations. This was partly offset by the impact of divestments and higher non-cash costs.

Increasing output from the key regions, primarily the Gulf of Mexico, drove overall underlying production2 of oil and gas, excluding Russia, up by over 3% compared to a year earlier. 

The end of the Abu Dhabi concession in January 2014 together with divestment impacts, however, meant that reported Upstream production, at 2.1 million barrels of oil equivalent a day (mmboed), was 6% lower. Reported production in the third quarter is expected to be lower due primarily to turnaround and seasonal maintenance activities.

Including Russia, reported group oil and gas production averaged 3.1 mmboed.Reported underlying net income from Rosneft for the quarter was $1.0 billion. BP received a dividend payment of approximately $700 million earlier in July.

The Downstream reported underlying pre-tax replacement cost profit of $0.7 billion, compared with $1.0 billion in the previous quarter and $1.2 billion for the second quarter of 2013. Both a significantly weaker refining environment and a weaker contribution from supply and trading negatively impacted the result compared to a year earlier, although this was partially offset by benefits from increasing heavy crude runs at the Whiting refinery. During the quarter, throughput
of heavy oil at Whiting reached a high of 270,000 barrels a day.

Five new major upstream projects in BP’s key regions have started production so far in 2014 – most recently, the CLOV project in Angola achieved first oil on 12 June. Three of these five projects are in the deepwater Gulf of Mexico. Two further projects are expected on-stream in 2014.

Greater operating efficiency is being demonstrated in the Upstream, with average plant reliability for the first half higher than a year earlier, drilling performance continuing to improve and seven of the turnarounds planned for 2014 complete or underway. In the Downstream, refining availability was again maintained above 95% for the quarter.

In exploration, BP has participated in 10 completed wells to date in 2014 which have so far resulted in two significant discoveries – Notus in Egypt and Orca in Angola. 15-17 wells are expected to be completed over the whole year.

In the quarter the provision for litigation related to the Gulf of Mexico oil spill was increased by $260 million. The total cumulative pre-tax charge for the incident to date is now $43.0 billion.

The provision does not include any amounts for business economic loss claims that are yet to be received, processed and paid.

At the end of the quarter, the aggregate remaining cash balance in the $20 billion Trust and qualified settlement funds remained at $6.3 billion. The unallocated headroom in the Trust remained at around $700 million.


 

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter May 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Finance

CMA CGM Intends Offer to Acquire NOL

Following the satisfaction and waiver (as the case may be) of the conditions set forth in the pre-conditional offer announcement dated 7 December 2015, CMA CGM S.

Oman Shipping Makes Profit

Oman Shipping Company (OSC) reported a $180 million profit in 2015. Tariq bin Mohammed Al Junaidi, chief executive officer of OSC has been quoted by  Oman News

Korean Shipbuilder Could Be Liquidated

South Korea's STX Offshore & Shipbuilding Co. has filed for receivership, following massive losses that have mounted up over the past two years, says a report in the WSJ.

Energy

Strike In France: Implications for Tanker Demand

After the oil industry suffered from a severe drought in Venezuela, forest fires in Canada and rebel attacks on oil installations in Nigeria, it is now facing

Floating Storage Flattens Fortunes of $50 Crude

The prices of WTI and Brent crude briefly rose above $50/bbl during intraday trading on Thursday, the highest level seen since the end of July 2015, giving traders a brief moment of optimism,

GloMEEP Project Forges Ahead with Train-the-Trainer Workshop

A global Train-the-Trainer workshop on energy efficiency has been delivered in China (23-27 May), preparing the personnel needed to cascade knowledge on energy

News

APM Terminals Bahrain Push for Safety, IT systems

Hidd, Khalifa Bin Salman Port, Bahrain - APM Terminals Bahrain, operators of Khalifa bin Salman Port (KBSP), has recently made significant advances in Safety performance

Seized Hanjin Shipping Vessel Resumes Operation in South Africa

Hanjin Paradip resume  its sailing from South Africa as talks continue with owner over unpaid charter fees. The ship had been detained in Richards Bay, South Africa

Deployment: The Transpacific Trade Steps Up To The Plate

In 2015, it was the Asia-Europe route which was the focus of changing deployment trends, says Clarksons Research.   This year, it is the Transpacific trade which

 
 
Maritime Contracts Navigation Offshore Oil Pipelines Pod Propulsion Port Authority Salvage Ship Simulators Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.0962 sec (10 req/sec)