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Tuesday, November 02, 2010

BP Returns To Profitablity

According to BP, its replacement cost profit for the third quarter was $1.85bn, as against the $17 billion loss recorded from April to June.  The previous loss reflected the massive costs of the Gulf of Mexico oil spill crisis, which followed an explosion on a drilling rig in April.  The cost of the oil spill had now risen by $7.7 billion to $40 billion. BP reported that the $39.9bn cost of the oil spill included $20bn set aside under pressure from the US government for compensation payments.

BP's $1.85 billion third-quarter profit compares with a $5bn profit for the same period in 2009. BP's return to the black shows quite how strong and profitable it is.

BP has benefited from a higher oil price, which boosted earnings in its giant exploration and production division by more than $2 billion, offsetting a fall in the amount of oil produced.  That division is being broken up, as part of comprehensive efforts to rehabilitate this battered business. BP is selling off up to $30 billion of assets by the end of the year, to cover those huge oil spill costs. (BBC News, 11/2/2010)

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