3 Nov 2010

BP back to billion-dollar profit

6:46 am on 3 November 2010

BP has returned to profit - making $US1.8 billion ($NZ2.3 billion) in the three months to the end of September.

The company posted a record loss of $22 billion in the previous quarter because of the cost of dealing with its huge oil spill in the Gulf of Mexico.

The total cost of that operation, it now says, has risen to more than $50 billion, a figure that includes $25 billion set aside under pressure from the United States government for compensation payments.

Eleven workers on the Deepwater Horizon drilling rig were killed when the rig exploded on 20 April; the subsequent oil spill polluted hundreds of kilometres of coast.

The well was finally capped on 15 July, after an estimated 4.9 million barrels of oil had leaked into the sea, and was fully sealed in September.

Higher oil price helped

The BBC reports that BP has benefited from a higher oil price, which boosted earnings in its giant exploration and production division by more than $2.5 billion, offsetting a fall in the amount of oil produced.

That division is being broken up, as part of comprehensive efforts by new chief executive Bob Dudley to rehabilitate the business.

His cure also includes shrinking BP, selling up to $40 billion of assets by the end of the year.