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BP back to profit after oil spill | BP back to profit after oil spill |
(about 2 hours later) | |
Oil giant BP has announced a return to profit in the three months to September after last quarter's record loss. | Oil giant BP has announced a return to profit in the three months to September after last quarter's record loss. |
The firm said its replacement cost profit for the period was $1.85bn (£1.15bn), as against the $17bn loss recorded from April to June. | The firm said its replacement cost profit for the period was $1.85bn (£1.15bn), as against the $17bn loss recorded from April to June. |
The previous loss reflected the massive costs of the Gulf of Mexico oil spill crisis, which followed an explosion on a drilling rig in April. | The previous loss reflected the massive costs of the Gulf of Mexico oil spill crisis, which followed an explosion on a drilling rig in April. |
BP said the cost of the oil spill had now risen by $7.7bn to $39.9bn. | BP said the cost of the oil spill had now risen by $7.7bn to $39.9bn. |
Bob Dudley, who led the clean-up, became BP's chief executive last month. | Bob Dudley, who led the clean-up, became BP's chief executive last month. |
He replaced Tony Hayward, who was criticised for his leadership during the crisis. | He replaced Tony Hayward, who was criticised for his leadership during the crisis. |
BP said the $39.9bn cost of the oil spill included $20bn set aside under pressure from the US government for compensation payments. | BP said the $39.9bn cost of the oil spill included $20bn set aside under pressure from the US government for compensation payments. |
Eleven workers on the Deepwater Horizon drilling rig were killed by the explosion on 20 April and hundreds of miles of coast were polluted. | Eleven workers on the Deepwater Horizon drilling rig were killed by the explosion on 20 April and hundreds of miles of coast were polluted. |
The well was finally capped on 15 July, after an estimated 4.9m barrels of oil (171m gallons) had leaked into the sea, and fully sealed in September. | The well was finally capped on 15 July, after an estimated 4.9m barrels of oil (171m gallons) had leaked into the sea, and fully sealed in September. |
'Safety first' | 'Safety first' |
BP's $1.85bn third-quarter profit compares with a $5bn profit for the same period in 2009. | BP's $1.85bn third-quarter profit compares with a $5bn profit for the same period in 2009. |
The news was well received by the markets, which sent the company's share price up more than 6% in morning trading. | The news was well received by the markets, which sent the company's share price up more than 6% in morning trading. |
"The update provides a stark reminder that the fallout from the spill will follow BP for some considerable time to come," said Richard Hunter, head of UK equities at Hargreaves Lansdown stockbrokers. | "The update provides a stark reminder that the fallout from the spill will follow BP for some considerable time to come," said Richard Hunter, head of UK equities at Hargreaves Lansdown stockbrokers. |
BP's return to the black shows quite how strong and profitable it is. | BP's return to the black shows quite how strong and profitable it is. |
BP has taken a further $7.7bn (£4.8bn) of charges relating to the Gulf of Mexico oil spill - bringing to almost $40bn the total provision that it has made for the ultimate costs of the debacle. | BP has taken a further $7.7bn (£4.8bn) of charges relating to the Gulf of Mexico oil spill - bringing to almost $40bn the total provision that it has made for the ultimate costs of the debacle. |
BP has benefited from a higher oil price, which boosted earnings in its giant exploration and production division by more than $2bn, offsetting a fall in the amount of oil produced. | BP has benefited from a higher oil price, which boosted earnings in its giant exploration and production division by more than $2bn, offsetting a fall in the amount of oil produced. |
That division is being broken up, as part of comprehensive efforts by the new chief executive Bob Dudley to rehabilitate this battered business. | That division is being broken up, as part of comprehensive efforts by the new chief executive Bob Dudley to rehabilitate this battered business. |
His cure also includes shrinking BP, selling off up to $30bn of assets by the end of the year, to cover those huge oil spill costs. | His cure also includes shrinking BP, selling off up to $30bn of assets by the end of the year, to cover those huge oil spill costs. |
"In the meantime, BP has refocused itself with safety as a priority and, in terms of its normal operations, the company continues to generate enormous amounts of income." | "In the meantime, BP has refocused itself with safety as a priority and, in terms of its normal operations, the company continues to generate enormous amounts of income." |
In another development, Japanese firm Mitsui said on Tuesday that one of its subsidiaries, Moex Offshore, had been billed $1.9bn by BP to cover costs from the oil spill. | In another development, Japanese firm Mitsui said on Tuesday that one of its subsidiaries, Moex Offshore, had been billed $1.9bn by BP to cover costs from the oil spill. |
Moex owns 10% of the Macondo oil well project operated by BP. | Moex owns 10% of the Macondo oil well project operated by BP. |
Mitsui said it had withheld payment, because it said there was uncertainty about the amount due. | Mitsui said it had withheld payment, because it said there was uncertainty about the amount due. |
Last week, US investigators said cement used to seal the Macondo well may have contributed to the blow-out that caused the Gulf of Mexico oil spill. | Last week, US investigators said cement used to seal the Macondo well may have contributed to the blow-out that caused the Gulf of Mexico oil spill. |
Both BP, which owned the well, and Halliburton, the contractor responsible for the cement, were aware of tests showing it was unstable, they said. | Both BP, which owned the well, and Halliburton, the contractor responsible for the cement, were aware of tests showing it was unstable, they said. |
Halliburton has denied the claims, saying the tests were invalid as they were on a different kind of cement. | Halliburton has denied the claims, saying the tests were invalid as they were on a different kind of cement. |