Weaker oil and gas prices drag down BP profits

Energy giant BP has seen profits slide in the first quarter after it was hammered by falling oil and gas prices.

The oil major said replacement cost profit – the market’s preferred measure – fell to 2.1 billion US dollars (£1.6 billion) in the first quarter, dropping 12% from 2.4 billion US dollars (£1.9 billion) in the same period last year.

But the profits were slightly ahead of analyst forecasts due to strong trading across both oil and gas.

Strong supply over the three months to March also partially offset the impact of lower prices and weaker refining margins, the company said.

Group chief executive Bob Dudley said: “BP’s performance this quarter demonstrates the strength of our strategy.

“With solid upstream and downstream delivery and strong trading results, we produced resilient earnings and cash flow through a volatile period that began with weak market conditions and included significant turnarounds.

“Moving through the year, we will keep our focus on disciplined growth, with efficient project execution and safe and reliable operations.”

The FTSE 100 stalwart has been riding the wave of a rebound in the cost of crude in recent years, as it doubled profits for the 2018 full-year.

However, the price of Brent crude oil sank to an 18-month low at the end of December, holding back profits in the sector.

The company also took operational control of BHP Group oil assets scattered across the US during the quarter, following its 10.5 billion US dollar (£8.1 billion) acquisition.

Operating cash flow for the period stood at 5.9 billion US dollars (£4.6 billion), excluding a 600 million US dollar payment (£464 million) for its Deepwater Horizon oil spill in the Gulf of Mexico in 2010, and a 1 billion US dollar (£773 million) working capital build.