LONDON (dpa-AFX) - BP Plc's (BP, BP_UN.TO, BP.L) chief executive officer Bob Dudley Tuesday boosted the company's target for asset sales, after the oil giant reported a surge in profit for the third quarter.
'We have now reached a definite turning point. Our operations are regaining momentum and we are facing the future with great confidence. I believe we will build on our strengths to substantially grow operating cash flows, allowing us to directly increase returns to shareholders as well as invest for future growth,' Dudley said in a preview of a presentation to the financial community.
Dudley plans to extend BP's current divestment program to $45 billion from the current programme of $30 billion, by divesting another $15 billion in assets by the end of 2013. Dudley expects cash flow to grow by around 50 per cent by 2014.
Separately, BP said third-quarter profit attributable to BP shareholders increased to $4.91 billion from last year's $1.785 billion. Earnings per share surged to 25.57 cents from 9.38 cents in the comparable period.
The company, which went on an asset sale spree following the Gulf of Mexico oil spill, said disposal proceeds, including deposits received in the period, were $2.1 billion for the third quarter.
The latest results include $0.6 billion in pre-tax charges related to the Gulf of Mexico oil spill. During the quarter, BP contributed $2.4 billion to the Deepwater Horizon Oil Spill Trust fund, including settlements received from MOEX USA Corp. and Weatherford U.S., L.P.
Replacement cost profit, which excludes gains/losses from inventories, increased to $5.14 billion from $1.85 billion a year earlier. Excluding non-operating items and fair value accounting effects, underlying replacement cost profit slipped 4 percent to $5.3 billion.
Pre-tax profit climbed to $7.35 billion from $1.58 billion in the same quarter last year. Total revenues and other income climbed to $97.60 billion from $74.65 billion in the previous year.
In Exploration and Production segment, replacement cost profit before interest and tax decreased nearly 10 percent to $7.55 billion, as higher realizations were partially offset by lower production volumes and higher costs. Revenues grew to $6.63 billion from $6.49 billion last year.
Production for the quarter dropped 12 percent to 3.319 thousand barrels of oil equivalent per day. BP expects production in the fourth quarter to be higher, although it will continue to be impacted by divestments and the pace of drilling activity in the Gulf of Mexico.
In Refining and Marketing segment, replacement cost profit before interest and tax dropped over 16 percent to $1.493 billion. Revenue increased to $88.30 billion from $63.58 billion. According to the company, the results reflected an improved refining environment and a stronger supply and trading contribution, partially offset by increased turnaround activity. The company expects a normal seasonal decline in refining margins in the fourth quarter.
BP's CEO Bob Dudley said separately that the refining and marketing businesses are on track to deliver record earnings in 2011.
Additionally, the company announced a dividend of 7 cents per share expected to be paid in December.
In yet another staement, BP said Brian Gilvary would join the board and become the company's chief financial officer with effect from January 1, 2012. The company's current CFO Byron Grote will take up a new role as executive vice president, corporate business activities, on the same date. 63-year-old Grote will also continue to be a member of the board.
Gilvary has been BP's deputy group CFO and head of finance for nearly two years. Prior to that, he had been chief executive of BP's commodity trading arm, Integrated Supply and Trading. He joined BP in 1986.
BP.L is currently trading at 456.10 pence, up 18 pence or 4.11 percent, on 15.2 million shares.
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