British energy multinational BP has announced its results for the third quarter (Q3) of 2019, reporting a drop in underlying replacement cost profit for the third quarter of 2019 to $2.3bn, compared to $3.8bn a year before. Underlying upstream production, excluding those from Russian state-backed firm Rosneft, also saw a 2.5% decline from a year earlier.
The figures were impacted by significantly lower upstream earnings, lower-than-expected oil prices and maintenance costs.
BP CEO 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.”
Hurricane Barry, which hit North America in July, is also considered to have an impact on BP’s performance, with the major estimating that the storm disrupted operations, cutting production by 2.5%. Shares in BP also fell by 1.7% in the wake of the hurricane, triggering uncertainty amongst shareholders.
Reported oil and gas production for the quarter slightly increased to average 3.7 million barrels of oil equivalent a day, compared to 3.6 million barrels of oil a day last year.
Operating cash flow, excluding Gulf of Mexico oil spill payments, was $6.5bn for the quarter, including a $0.1bn working capital. Gulf of Mexico oil spill payments were $0.4bn on a post-tax basis. A divestment-related non-cash after-tax charge of $2.6bn also contributed to the $0.7bn loss for the quarter.
Following the agreement to sell BP’s interests in Alaska to Hilcorp Energy, divestment transactions announced in 2019 totalled $7.2bn at the end of the third quarter. BP expects this to reach around $10 billion by year end.
However, Dudley remains optimistic about BP’s future, despite the latest figures revealing a spiralling of net debt by 21%, to $46.5bn.
“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,” he added.
The quarterly report was released shortly after BP chief executive Bob Dudley announced he would be stepping down from the position after heading the company for almost ten years.