BP swings to profit but pricing environment remains a threat

Bob Dudley insists that BP has laid the foundations to get “back to growth”Getty Images

Bob Dudley insists that BP has laid the foundations to get “back to growth”Getty Images

The burst in activity marks a return to growth for the company whose deadly 2010 Deepwater Horizon rig explosion in the Gulf of Mexico forced it to sell assets worth billions of dollars.

Mr Gilvary said he expects a material impact starting in the first quarter this year from the acquisition in December of 10 per cent of Abu Dhabi's onshore oil concession, a $2.2bn tab paid for in shares, making the emirate one of BP's largest shareholders.

Excluding a $4.1bn legacy charge from the Gulf of Mexico oil spill, BP's reported headline profit for the full year was $115m, up from a $6.5bn loss in 2015.

BP is looking at ways to incrementally increase its footprint in USA shale oil and gas production, its Chief Executive Officer Bob Dudley said on Tuesday.

BP took another charge of $799m for the Deepwater Horizon disaster, bringing total charges to $62.6bn.

Although BP shares are now down nearly 9% so far this year, the stock is still up around 40% over the calendar year having been driven higher by a strong recovery in crude prices in the fourth-quarter following output cuts led by oil cartel OPEC.

BP have announced that when the oil price reaches US$60 per barrel, it will balance the book by the end of 2017.

Shares in BP were down 2.4% to 465.1p after reporting full-year profits of $2.6 billion (£2.1 billion), their lowest level in at least a decade, as fourth quarter earnings of $400 million missed analyst expectations.

Underlying replacement cost profit sat at $400m, this is up from $196m just a year earlier.

In London, BP shares were trading at 462.60 pence, down 2.93 percent.

He added that pricing is still a challenge for the oil majors "and while things are looking better than they did a year ago, we're still a long way short of those halcyon days when oil traded at over $100 a barrel".

Its figures come after rival Royal Dutch Shell also reported back on a lacklustre fourth quarter last week, which dragged its annual profits down by 8%.

BP's revenue for the fourth quarter was $52.12 billion, increasing from the $49.23 billion in the same period past year. The company took on $35.5 billion in debt in 2016, up from $27.2 billion at the end of 2015, in part to keep paying the dividend. Net income was $497 million compared with a loss of $3.31 billion a year earlier. Underlying cash from operations in the fourth quarter fell almost 24% compared with the same period a year earlier.

Panneerselvam meditates at Jayalalithaa memorial
Oil Mixed as US Supplies & Dollar Rise