British oil giant BP posted a 38 percent surge in profits in the fourth quarter, as it returned to drilling in the Gulf of Mexico and completed its major shoreline cleaning obligations from the 2010 oil spill.
The company recorded $7.7 billion in net income, or $39.99 per diluted share, during the three months ending Dec. 31. That compares to $5.6 billion, or $29.28 per diluted share, during the same period in 2010.
Total revenue rose 15 percent to $96 billion.
The company restarted drilling in the Gulf of Mexico in the final months of 2011 and will expand its investment in the region this year, said Chief Executive Officer Bob Dudley, launching six new projects and adding eight rigs. In the Gulf’s deep-water areas, the company currently operates five rigs and plans to add three more this year, Dudley said.
“The Gulf of Mexico remains a very important part of our future. Getting safely back to work was critical,” Dudley said. “Deep-water will remain a core building block of our portfolio.”
Declining oil and natural gas production volumes hit BP’s exploration and production arm, which recorded a 5.6 percent decline in fourth quarter replacement cost profits, according to financial statements. The E&P division reported $7.5 billion in replacement cost profits last quarter. The company reports the special “replacement cost” measure in financial statements to exclude gains and losses from inventory holdings.
Dudley said the company expects total oil and natural gas production will continue falling this year, as well production naturally declines and the company continues its asset divestment plan.
The company produced 3.5 billion barrels of oil equivalent in the fourth quarter, down 5 percent from a year earlier.
However, BP plans to double its investment in exploration over the next three years, Dudley said. Combined with the company’s resurgence in the Gulf of Mexico and other new projects, BP plans to invest $16 billion to $17 billion in exploration and production this year, up as much as 21 percent from 2011.
The company expects to launch six major projects this year and a total 15 by the end of 2014, including several in the Gulf of Mexico.
Two-thirds of the projects will target oil development, with the remaining focused on natural gas.
Profits from the company’s refining and marketing arm fell precipitously, down 41 percent to $564 million. The division struggled against high oil prices, which it buys to produce gasoline and other fuels. Falling refining margins in the U.S. proved particularly difficult, executives said.
They’re profiting over $30 billion a year… and people thought the the $20 billion fund (paid into over 5 years) was excessive. Now we find out they’ve hardly paid any compensation for THE SPILL yet they are rolling in dough again. “Enjoy your US GOM idiots… we’re back in business!!”
BP brings a product to the table that people want buy while supplying thousands and thousands of jobs that pumps millions and millions of dollars into the economy and the tax man’s coffers and all you liberals can do is complain.
Go to the Gulf, it’s clean and beautiful.
BP needs to come to the table with clean hands. Neither their actions before and after Texas City show a change in their thinking and conduct nor do their actions before and now after the Gulf spill. Perhaps, just perhaps the Courtroom awards will make them modify some of their conduct but I doubt it. The have the attitude that they can buy their way out of anything and are just too big to really feel any pain from abusing their employees, the environment and the people of this country.
$7.7 billion in profit on revenues of $96 billion means that they have a profit margin of 8%.
To put in perspective, if Apple were to invest $96 billion, then they would have a profit of $27 billion. If McDonald’s were to invest that same $96 billion, then they would have profits of 19 billion.
Big oil only makes big money because we invest big money. Our profit margins are razor thin.
Somehow profits became a bad word. Profits belong to the shareholders, not the CEO or board of a company. Also that is net profit BEFORE any of it is used for new investments, contruction, etc. 10 Macando wells without the excitement would eat up more than $1billion of that profit alone, and those would be dry holes. You could double that for producers.
John D, very well put. A good portion of that investment is during the exploration stage of the life cycle.
funny.. seems like every time ya turn around , one of these gas companies is bragging at how they the news paper for their bragging at how they use bend us over …
hopefully they use some of that K-Y jelly on us this next go around.
“BP needs to come to the table with clean hands. Neither their actions before and after Texas City show a change in their thinking and conduct nor do their actions before and now after the Gulf spill. Perhaps, just perhaps the Courtroom awards will make them modify some of their conduct but I doubt it. The have the attitude that they can buy their way out of anything and are just too big to really feel any pain from abusing their employees, the environment and the people of this country.”
Have you sat in any project meetings lately or reviewed 2012 operating plans for BP. If you had, then you would immediately retract that statement. Safety is something that is embedded within the culture of a company. Former BP CEOs did not get this concept, Bob Dudley and his team do. Change does not come overnight, but believe me change is happening.
SarahATP
You have completely missed the point. What do you think would have happened if any other company but BP, Shell, Exxon and Chevron had the Macondo incident? They would have been out of business after a couple of weeks. Obama, your friends and the rest of us would have been picking up the bill. Macondo would not have been capped in July 2010, but much later.
BP has taken responsibility and done the right thing. Do your research before you spew your liberal rhetoric the next time.