British oil giant BP has reported a 34% rise in year-on-year profits for its second quarter of the year. The financial spike was driven by increased production and higher oil and gas sales prices.
Underlying replacement cost profit for the quarter was $3.6billion, compared to $2.7billion in 2013. The figure was 13% higher than the $3.2billion result for the first quarter of 2014.
Increased production from new and recently started higher-margin upstream projects and increased processing of heavy crude oil by the newly-modernised Whiting refinery contributed to an operating cash flow of $7.9billion in the second quarter, the major said in a statement.
Total operating cash flow for the first half of the year was $16.1billion.
Its total average production of 3.1million barrels of oil equivalent per day (boed) was fuelled by an increase of output by more than 3% from the major’s key regions, particularly the Gulf of Mexico (GoM).
But BP expects the third quarter output to be lower, due to planned maintenance activities in GoM and Alaska.
However, BP’s downstream business reported a loss of underlying pre-tax replacement cost profit, closing the firm $0.7billion for the quarter, compared with $1billion in the previous quarter and $1.2billion for the second quarter of 2013.
Both a significantly weaker refining environment and a weaker contribution from supply and trading negatively impacted the result compared to a year earlier, although this was partially offset by benefits from increasing heavy crude runs at the Whiting refinery, the company said.
“This was another successful quarter, delivering both operational progress and robust cash flow,” said Bob Dudley, BP group chief executive.
“We are continuing to ramp up the major new projects that drive delivery of cash flow and are also now seeing benefits from our focus on operating with greater reliability and efficiency.
“This operational momentum keeps us well on track to meet our 2014 targets and underpins our longer-term commitment to grow distributions to our shareholders.”
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