Oil and gas giant BP (BP.L) beat analyst forecasts for third quarter performance thanks to a strong performance at its oil refinery business.
Adjusted income for the third quarter of 2019 was $2.25bn (£1.75bn), BP said on Tuesday. That was down 40% on the third quarter of 2018 but well above the consensus analyst forecast of $1.7bn. The oil giant made a loss attributable to shareholders of $700m, driven by a $2.6bn tax charge in the quarter.
Shares in BP slipped by 0.8% at the open in London.
Outgoing BP CEO Bob Dudley said in a statement: “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.”
Michael Hewson, chief market analyst at CMC Markets, said the performance showed BP “is nimbler and more efficient than it was a decade ago.”
“It would appear that better than expected downstream revenues have helped boost the numbers during the quarter,” Hewson said in an email. “This outperformance was helped by record output at the Whiting and Cherry Point refineries. This helped offset a weaker upstream performance which was impacted by adverse weather conditions in the Gulf of Mexico, and probably won’t be repeated in Q4, putting the company on course for a fairly decent year.”
BP, which pumped out 3.7m barrels of oil per day in the quarter, announced at the start of the month that Dudley will retire in February next year after nine years in charge. He is set to be replaced by BP lifer Bernard Looney.
“Looney will have to oversee the challenges of potentially lower oil prices, as well as the ongoing transition to renewables at a time when debt levels still remain uncomfortably high,” Hewson said.
BP’s management are selling off assets in a bid to pay down debt, which stands at $46.5bn. The company said on Tuesday it is ahead of schedule on plans to sell $10bn (£7.8bn) of assets, after a $7.2bn (£5.6bn) deal to sell its oil fields in Alaska to Hilcorp, announced in the quarter.
BP is still paying for its costly Gulf of Mexico oil spill that occurred in 2010. The company spent $400m on reparation costs in the quarter.