BP BP Plc

By Sarah Kent 

LONDON -- BP PLC on Tuesday said second-quarter profit jumped, as higher oil prices helped the company accelerate ambitious growth plans.

London-based BP said its replacement cost profit -- a number analogous to the net income that U.S. oil companies report -- tripled to $1.8 billion in the second quarter, compared with $600 million in the same period a year earlier.

After years of cost-cutting and financial restructuring when oil prices slumped, BP and other big oil companies are benefiting from a recovery in the market. Oil prices are up more than 10% since the start of the year, allowing companies to generate higher profit and cash flow. Brent crude prices averaged nearly $75 a barrel from April to June, compared with an average of roughly $50 a barrel in the same three months last year.

Last week, BP announced a $10.5 billion deal to acquire some of the hottest assets in U.S. shale country. The acquisition is the company's biggest in 20 years and signals its growing confidence. At the same time, the company also said it would increase its dividend for the second quarter by 2.5%.

The numbers bear out BP's ambitious plan to regain its position among the elite tier of big energy companies following its fatal blowout in the Gulf of Mexico eight years ago. The company's production rose 3% in the first half of the year compared with the same period a year ago, delivering on a strategy to return to its former size by the early 2020s.

"I can't remember when it has looked this good," BP Chief Executive Bob Dudley said.

Still, payments related to the 2010 disaster remain a financial drag. BP's landmark $20 billion settlement with the U.S. government in 2015 requires the company to make annual payments of around $1 billion through the end of the next decade. Payments in 2018 are expected to total just over $3 billion after tax.

BP caps off a mixed earnings season for the world's biggest oil companies. The likes of Exxon Mobil Corp., Chevron Corp. and Royal Dutch Shell PLC all posted sharply higher profits, but failed to impress investors who had expected even bigger windfalls.

Write to Sarah Kent at sarah.kent@wsj.com

(END) Dow Jones Newswires

July 31, 2018 06:32 ET (10:32 GMT)

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