BP Sees More Upsides to Upstream Ahead in 2018 -- Energy Comment

02/06/18 09:02 AM EST

LONDON--British oil-and-gas giant BP PLC (BP.LN) on Tuesday reported a $583 million loss for the fourth quarter of last year, mainly as a result of charges connected with the 2010 oil spill in the Gulf of Mexico and a paper loss caused by recent U.S. corporate-tax changes. However--impairments aside--2017 proved to be BP's most profitable year since oil prices crashed just over three years ago.


Here are some remarks from BP's earnings report:


On the upstream oil business...

"2017 oil-and-gas production, excluding Rosneft, was 12% higher than in 2016, the highest since 2010. Upstream unit production costs were 16% lower, benefiting from production growth and continued cost discipline...In the quarter, BP accessed significant new exploration acreage in the Santos basin of Brazil and in Cote d'Ivoire with Kosmos Energy. BP announced six exploration discoveries in 2017--the cumulative discovery of around 1 billion boe [barrels of oil equivalent] of resources was BP's largest since 2004."


On the downstream business...

"Fuels marketing earnings increased by more than 10% in 2017. Premium fuel volumes grew by 6% and BP's convenience partnership model increased to 1,100 sites worldwide. More than 120 BP retail sites in Mexico were operational at year end. In lubricants, BP delivered premium brand growth and increased earnings from growth markets. In manufacturing, both refining and petrochemicals grew earnings with record levels of advantaged feedstock processed in refining."


On the transition away from petroleum products...

"BP acquired a 43% interest in Lightsource, Europe's largest solar development company, supporting its rapid expansion worldwide. Other progress included BP enhancing its biofuels business in Brazil through an ethanol-storage joint venture, forming a partnership with Aria Energy to expand its renewable gas portfolio in the U.S. and, in January, BP Ventures investing in the electric vehicle fast-charging company Freewire."


On the 2018 outlook for upstream...

"We expect full-year 2018 underlying production to be higher than 2017 due to the ramp up of major projects...We expect first-quarter 2018 reported production to be broadly flat with the fourth quarter 2017, reflecting continued growth from the 2017 major project startups, offset by the expiration of the Abu Dhabi offshore concession and divestment impacts."


On the 2018 outlook for downstream...

"Looking to the first quarter of 2018, we expect higher discounts for North American heavy crude oil but lower industry refining margins. In addition, we expect our turnaround activity to be lower in refining but significantly higher in petrochemicals."


(END) Dow Jones Newswires

February 06, 2018 09:02 ET (14:02 GMT)

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