BP has become the latest oil giant to report a surge in profits on the back of last year’s global recovery of crude oil prices.

Oil giant posts significant growth

Annual profits more than doubled with the underlying replacement cost profit increasing from $2.6 billion in 2016 to $6.2 billion last year.Bob Dudley, BP group chief executive, said, “2017 was one of the strongest years in BP’s recent history. We delivered operationally and financially, with very strong earnings in the downstream, upstream production up 12 per cent and our finances rebalanced.“We enter the second year of our five-year plan with real momentum, increasingly confident that we can continue to deliver growth across our business, improving cash flows and returns for shareholders out to 2021 and beyond.”

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Related stories:

• Shell profits double as oil price recovers
• BP North Sea finds ‘set to double oil production’
• Trends in the global oil and gas industry 

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So far this year, both BP and Shell have returned profit figures for 2017 that have beaten analysts’ earnings forecasts.Brian Gilvary, the company’s chief financial officer, said, “We had strong delivery and growth across BP in 2017. The full-year underlying result was more than double a year earlier, our organic cash flows are back in balance and our financial frame remains resilient.”

UK Oilfield Services Industry optimism

Also published on Tuesday was EY’s Review of the UK Oilfield Services Industry, which said the sector had come “back from the brink” last year after a 15 per cent decline in turnover in 2016.Derek Leith, EY partner for oil and gas, said, “Industry leaders have taken action to make operations as lean and efficient as possible which has helped them ride out this downturn.“However, cost cutting and headcount reduction cannot continue indefinitely. A shift towards greater innovation in systems, processes and technologies could help drive operational costs down further while also enabling the sector to respond to an increase in activity which appears to be on the horizon.“The industry is entering a more positive environment where oil price is rising and production is increasing as a result of both improved efficiencies and new fields coming on line, but this cannot give licence for old habits to creep back in.“Long-term success for the UK oilfield services sector will rely not only on the continued application of greater efficiencies but an active commitment to a sustainable future for the industry.“UK offshore services companies cannot rely on growth in the UK alone to increase revenues and must both internationalise and diversify their operations to ensure long-term survival.“While it is encouraging to see a rise in export activity it is concerning that access in overseas markets is still very modest.”

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Read more about the future of UK business in the Winter issue of our magazine 

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