BP profits double on higher prices and new oil fields

Profits at oil giant BP more than doubled in the third quarter, boosted by stronger oil prices and higher production from new oil fields.

Profits rose to $3.8bn (£3bn) from $1.86bn a year earlier, its best quarterly result for five years.

Revenue in the July-to-September quarter jumped to $80.8bn, up from $60.8bn last year.

Over the past three months, the price of Brent crude oil has averaged $75.07 a barrel, up 44% from a year earlier.

The Brent price reached a four-year high of more than $86 a barrel earlier this month before dropping back to around $77.

BP's profits were ahead of analysts' expectations, and shares in the company were up 3.9% in early trade on the London Stock Exchange.

BP chief executive Bob Dudley said: "Operations are running well across BP and we're bringing new, higher-margin barrels into production faster through efficient project execution."

Richard Hunter, head of markets at Interactive Investor, said: "BP has set the bar high for the oil majors in general, delivering a blockbuster set of earnings which have comfortably outpaced expectations.

"These numbers reflect a business which is back on its game."

Five major BP projects have come on stream in 2018 in the Gulf of Mexico, Australia, Azerbaijan, Russia, and Egypt.

The company said it expected production to grow further in the next three months thanks to the shale oil and gas fields it bought from the Anglo-Australian miner BHP for $10.5bn. The sale is expected to completed on Wednesday.

It now says it will pay for the acquisition out of cash if oil prices stay high rather than through selling shares.

BP chief financial officer Brian Gilvary said: "Since we announced the BHP transaction, oil prices have firmed to levels significantly above the acquisition assumptions. While oil prices remain at these levels, we expect to finance the transaction fully using cash."

However, the company is still paying for its disastrous oil spill in the Gulf of Mexico in 2010 and set aside another $500m to cover the damage from the accident.

BP paid a dividend of 10.25 cents a share for the third quarter, 2.5% higher than a year earlier.