Oil giant BP announced a return to profit yesterday despite a further hit of £4.8billion from the Gulf of Mexico disaster.
The crisis-hit firm posted profits of £1.1billion in the third quarter of 2010, compared with a loss of £10.6billion in the previous three months and profits of £3.1billion for the same period a year earlier.
The additional charge in the third quarter reflected a delay in completing the relief well which finally sealed the Macondo well in September. With BP benefiting from higher oil prices, its third-quarter profits excluding items relating to the spill rose 18% to £3.4billion.
This was despite its exploration and production division recording lower production volumes due to the impact of the disaster on its Gulf of Mexico operations and seasonal changes.
Bob Dudley, BP’s new American chief executive, said: “We have made good progress during the quarter. This strong operating performance shows the determination of everyone at BP to move the company forward and rebuild confidence after the terrible events of the past six months.”
The firm has already taken steps to rebuild trust after Mr Dudley unveiled a new safety and operational risk unit, a pay review focusing on safety-led incentives and a review of third-party contractors.
Mr Dudley, who replaced embattled predecessor Tony Hayward on October 1, said BP was financially “healthy” and would not, as many speculated, quit the US.
Shares in BP plunged from their year high of 658.2p on April 21 – the day after the explosion which killed 11 workers and triggered the spill – and hit a low of 296p in June. The value recovered to 425.4p last night.
Richard Hunter, of Hargreaves Lansdown stockbrokers, said it was too early to tell whether the current provision of £25billion will be enough to cover the spill or prove to be an overestimate.
Mr Dudley said after the “traumatic” last six months BP was in “recovery mode” and added: “Our objective is clear, BP must continue to deliver safe and reliable operations across the world. We continue on the journey to re-establish trust in BP around the world, especially the US.”
Mr Dudley said the business continued to perform well, showing that BP employees had not been distracted.
He said the board had committed itself to reviewing dividend payments in February next year, but added: “Let me make it clear, we have a long road ahead of us to earn back trust in BP.”
Mr Dudley said that in the longer term BP had to restore its “licence to operate in society”. Asked when BP might start drilling new wells in the Gulf of Mexico, Mr Dudley replied “possibly next year”.
Asked if there was a global “allergy to BP”, he said the signals around the world, in places such as Russia, China and Brazil, were that countries wanted to work with BP and learn from their experience after the explosion.
Asked if BP had planned for the possibility that the US Department of Justice may find it grossly negligent over the disaster, Mr Dudley said: “We’re not provisioning for that.”