BP has reported a surge in profit after the disruption to fuel supplies caused by the war in Iran turbocharged its margins.
The company has halved its debt over the past year to $13.9bn, set to be cut further by the $6bn proceeds it collected from the sale of lubricants business Castrol.
That helped send shares up 1.4 per cent to 633p in the opening minutes of trade on Friday.The stock is up by 44 per cent since the start of the year.
The figures echo those of London-listed rival Shell, which on Thursday reported a more than doubling of third-quarter profit to $12.1bn.
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SUBSCRIBE HERE“The industry as a whole has been showing remarkable adaptability,” chief executive Meg O’Neill said.
“Refineries have been running close to capacity to make up for shortfalls, shipping has been taking different and longer routes, and releases from strategic and commercial reserves are helping to bridge supply gaps.”
Net-zero pivot
BP reported writedowns of $5bn on its low margin renewables arm as the firm pivoted back to its more profitable oil and gas roots, a move which Ashley Kelty, analyst at Panmure Liberum said offers “further evidence that the net zero pivot has been highly value destructive.”
The company slashed its planned transition capital expenditure by more than $5bn annually earlier this year to a target of up to $2bn.
Meg O’Neill, who took over the reins of the company in April and has been scaling back its green strategy, will deliver her first major strategy update in New York in December.
“While operational performance remains robust and cash generation healthy, the key debate remains whether management can restore confidence in the longer-term direction of the company,” Kelty said.
“Investors will continue to worry about board disharmony after rumours over some execs keen on breaking business up, with others opposing this idea.
“Either way, the company has to demonstrate it has a vision for delivering higher shareholder returns in order to close the value gap between BP and peers.”