BP Q3 profit dives on divestment charges but beats expectations

BP on Tuesday reported a 41% fall in third-quarter net profit due to the impact of a divestment programme, lower oil prices, maintenance and extreme weather in the US Gulf of Mexico.

Net profit at the oil giant fell to $2.3bn for the three months ended 30 September from $3.8bn in the third quarter of last year and $2.8bn in the second quarter, but was still ahead of the $1.7bn that analysts had forecast.

The declined was expected after BP cautioned that it would register a non-cash, non-operating, after-tax charge of between $2bn and $3bn during the period as a result of agreed divestments, part of a planned $10bn divestment programme that is now scheduled to be completed before the end of the year.

Production averaged 3.7 million barrels of oil equivalent a day during the period, up from 3.6 million in last year's third quarter, though underlying upstream production, excluding the company's stake in Rosneft, was down 2.5%.

Earlier in the month, BP had warned that maintenance operations in high-margin areas and the effects of extreme weather such as Hurricane Barry would hit production by around 100,000 barrels of oil equivalent per day.

Meanwhile, the average price of Brent Crude during the period was $62.00, down from $75.16 in the third quarter of 2018, though BP partially offset the impact of this by achieving higher sales volumes.

The FTSE 100 company said it expected fourth quarter production to improve due to completion of seasonal works and turnaround activities.

Chief executive Bob Dudley said: "BP delivered strong operating cash flow and underlying earnings in a quarter that saw lower oil and gas prices and significant hurricane impacts. Our focus remains firmly on maintaining financial discipline and delivering safe and reliable operations throughout BP.

"We're also continuing to advance our strategy, making strong progress with our divestment plans and building exciting new opportunities in fast-growing downstream markets in Asia."

BP shares were down 0.51% at 509.40p at 0815 GMT.