MOSCOW (MRC) -- BP's third-quarter profit beat analysts’ estimates, boosted by refining, as CEO Bob Dudley laid out a plan for deeper cost cuts to withstand low prices, reported Bloomberg.
Earnings from processing crude into fuels and from trading natural gas took profit adjusted for one-time items and inventory changes to USD1.82 billion, 40% lower than a year earlier, yet exceeding the USD1.26 billion average estimate of 15 analysts surveyed by Bloomberg.
The London-based company hunkered down for a prolonged period of low prices, announcing further asset sales and reduced investment over the next two years. Dudley, one of the first oil chiefs to start preparing his company for a lengthy slump, said he is planning to be able to pay dividends without having to borrow money if prices are about USD60/bbl by 2017, echoing a similar strategy from French producer Total. The company aims to reduce annual cash costs by USD6 billion over that period and reduce capital expenditure further.
"The target of cash neutrality at USD60/bbl will benefit BP when oil prices recover," said Alexandre Andlauer, a Paris-based analyst with AlphaValue. "When oil prices are low, they benefit refining and when they’re volatile they benefit trading, and BP made the most of both in the quarter."
As MRC informed earlier, BP has planned to invest over USD200 million to upgrade its purified terephthalic acid (PTA) plants at Cooper River, South Carolina and Geel, Belgium. The investments will position these assets amongst the most efficient PTA manufacturing facilities in the world.
BP is one of the world's leading international oil and gas companies, providing its customers with fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items.